The Wise Exit

Chris Wise - Episode 64 | CASHING OUT M&A PODCAST

00:00:00:01 - 00:00:13:19
Chris Wise
See, the biggest mistake that people make is that they think they can do it on their own. I thought I could do it on my own. In fact, I didn't even necessarily know to go and look for help. But the fact I was like, Oh, I can figure it out. I'm going to drive through it. I'm smart, blah, blah, blah.

00:00:14:00 - 00:00:30:02
Chris Wise
That's the one. It's the reason why people are successful. But it's also the double edged sword of why people don't sell their company and become a statistic or even fail at the beginning. Don't sell their company or don't sell for what they think it's worth.

00:00:30:04 - 00:00:56:18
Todd Sullivan
Welcome to the Cashing Out podcast, where our fellow founders share real stories and offer honest advice around selling their companies to some of the top acquirers in the world. My name is Todd Sullivan, CEO of Exitwise, where we help business owners create the exits they deserve. Today, my guest is Chris Wise, an international entrepreneurial nomad who has built and sold two companies while traveling around the world and now helps his fellow founders build their businesses remotely.

00:00:56:20 - 00:01:27:06
Todd Sullivan
Chris Lessons are many, but one in particular where he graciously shares how one of his businesses got him removed from an international flight interrogated by the Secret Service and put him behind bars in federal prison for 19 months. Really is a first for us at Exitwise. In today's discussion, you'll hear how Chris coaches founders on how to remove themselves from their businesses to create transferable value and how he professes taking care of yourself to create productivity and prevent burnout.

00:01:27:08 - 00:01:34:10
Todd Sullivan
I hope you enjoyed my conversation with Chris Wise.

00:01:34:12 - 00:01:57:15
Todd Sullivan
Chris, thank you so much for being here. I'm really excited to chat with you. I feel a bit of a kinship in what you're doing today. But what's really exciting is kind of your past building multiple companies, having multiple exits, and then transforming that right into helping founders in a category where, frankly, I don't think we do a great job that kind of under $10 million.

00:01:57:17 - 00:02:18:06
Todd Sullivan
I think you say even $1 million to $10 million. $1 million to $20 million. Those business owners really need help of like, what can I do to improve my business where I'm making more money but also set myself up for the exits they deserve. So definitely want to get into that. But you've got some amazing stories of entrepreneurship though I would really want to hear about and appreciate you willing to to share.

00:02:18:08 - 00:02:28:10
Todd Sullivan
And frankly, Mark Cuban had this spot today on our podcast, and I bumped him when I knew you were available. So thank you. Thank you for being here.

00:02:28:12 - 00:02:29:14
Chris Wise
So glad to be here.

00:02:29:18 - 00:02:39:00
Todd Sullivan
I think the best place to start, right is you decided to become an entrepreneur at some point. Maybe you could talk to us about that moment and your first journey.

00:02:39:02 - 00:02:59:13
Chris Wise
Yeah. I think I was born an entrepreneur. I mean, I started my first business at 12, sharpening chainsaw chains and kind of a dangerous job for a kid. But my dad taught me how to do it. And fortunately, I still have all my fingers and toes here, but I did it very well and pretty soon I was making, you know, $25 bucks an hour as a 12, 13 year old.

00:02:59:13 - 00:03:12:16
Chris Wise
And from there I was able to buy my first computer at 14, I was able to buy my first car at 16. And then then from there, I had a kind of an entrepreneurial jump.

00:03:12:18 - 00:03:18:19
Todd Sullivan
That's great. So what is the let's talk about the first business that you built and actually sold.

00:03:18:21 - 00:03:43:21
Chris Wise
Okay. Yeah, well, getting there, there was actually an up and down. So I had started a company when I was 16 out of my parents basement building computers, and I built that up till I was 21 and actually had made it - built my own house, made it as a millionaire. But then the market changed and lost everything. And so I have had I had no formal business training, education.

00:03:43:23 - 00:04:03:10
Chris Wise
In fact, I dropped out of college to run this company because it was going so well. And I even had a full scholarship. And then when the market changed and you could buy computer parts online cheaper than I could get them, you know, it just all collapsed. And that's when I shifted into technology service and providing I.T. infrastructure.

00:04:03:12 - 00:04:27:20
Chris Wise
And that's the company that I ended up ended up selling. And so we niched into the mortgage industry and we ended up doing business technology integration. So we we would optimize a mortgage company's business processes using mortgage specific software. And then we provided the underlying I.T. infrastructure, the computers and all of that infrastructure. And the I ended up you know, this was my first exit.

00:04:27:20 - 00:04:44:03
Chris Wise
It wasn't graceful. I didn't know what I was doing, but I was just like I ended up hating the business I was in. And I just got so sick and tired of doing it. I was like, I just got to get rid of it, right? And so but, you know, I still successfully exit had a little money that came from it.

00:04:44:09 - 00:04:52:20
Chris Wise
But, you know, that was one of my learnings. So this is like in my mid twenties and yeah, so it's still, you know, provided a really big learning block. Moving ahead.

00:04:53:00 - 00:05:12:18
Todd Sullivan
I appreciate you sharing kind of the ups and downs, right. Like every entrepreneur is familiar with that. So you're in the, the mortgage industry and you're just kind of doing the blocking and tackling, building that business and then a moment hits you just, I can't do this anymore. What did you do to find a buyer? It sounds like you did this this exit on your own.

00:05:12:20 - 00:05:16:17
Chris Wise
It wasn't a moment. Yes. It wasn't a moment that is just like uptight. It was like.

00:05:16:17 - 00:05:17:17
Todd Sullivan
Years. Okay.

00:05:17:21 - 00:05:33:05
Chris Wise
But it was probably two years. I'm just like, Man, this is where me out. And then I was bringing other people in. And then finally I was just like, I need it. So I found another a competitor basically perfect. And I said, Look, I've built this business, I have all these things. And so then we, you know, we worked out a deal.

00:05:33:07 - 00:05:49:04
Todd Sullivan
And you did it on your own, right? It was it was clearly like the right time for you to do it. But looking back, would you have done that any differently? Talked to multiple buyers, got representation like or do you like? No, I'm just it worked out and I'm moving ahead.

00:05:49:06 - 00:06:02:00
Chris Wise
You know, looking back, I would have done things differently. I would have built my business differently, which would have led to a different outcome. And then, yes, absolutely, I would have done things differently if I knew then what I know now.

00:06:02:02 - 00:06:10:05
Todd Sullivan
That's what I'm excited to get into a little bit later is, you know what you know now and how we can share that with our fellow founders and business owners.

00:06:10:06 - 00:06:38:01
Chris Wise
But here's one thing I wanted to share just in general that I just learned over the last year that I wish I knew sooner. Okay. That people and business entrepreneurs, we don't talk about the failures that much or the stats of failure. And I recently finally put all the stats together and I realized that it's only one in 700 companies that actually sell for what the owner expected or desired.

00:06:38:04 - 00:07:06:01
Chris Wise
Yeah, and here's how we get there. 90% of companies fail within the first five years and then 85% of businesses that want to sell don't sell. And then 90% of businesses that sell don't sell for what the owner expected or desired. You know, there's a lot to unpack there and why that happens and what we can do and what I learned from my experience to do and what I do now to help prevent that.

00:07:06:03 - 00:07:21:17
Chris Wise
But I think it's just shocking that I think anybody who wants to ground themselves into reality and get out of it see the biggest mistake that people make is that they think they can do it on their own. I thought I could do it on my own. In fact, I didn't even necessarily know to go and look for help.

00:07:21:19 - 00:07:42:16
Chris Wise
But the fact I was like, Oh, I can figure it out. I'm going to drive through it, I'm smart, blah, blah, blah. That's the one. It's the reason why people are successful. But it's also the double edged sword of why people don't sell their company and become a statistic or even fail at the beginning. Don't sell their company or don't sell for what they think it's worth.

00:07:42:18 - 00:08:01:23
Todd Sullivan
I love that you just explained that. I felt very, very much the same way. The odds are absolutely against the business owner, the founder of a business. And when I looked at my entrepreneurial journeys, I found that the biggest black box was in M&A. And when I started looking at that, what I noticed is in the lower middle market.

00:08:01:23 - 00:08:26:03
Todd Sullivan
So selling businesses for $20 million to $500 million, the failure rate and we're being generous right now, the failure rate of businesses trying to sell is 70%. So think about the cost, right? Yes. You're putting $25, $50 grand down in some retainer to an investment bank. But what are you really losing? You're losing six months of your time where you weren't growing your business.

00:08:26:05 - 00:08:44:06
Todd Sullivan
And there are a variety of reasons of why that happens. We have absolutely put a stake in the ground that it has to do with industry expertise, real knowledge of what buyers are looking for, and each buyer has a specific interest. And so if you can align the right seller and the right buyer, you can create great outcomes.

00:08:44:08 - 00:09:06:11
Todd Sullivan
The second piece where you're saying that they're not getting what they thought they would get, I think there's actually two components. One is value, right? And certainly we see that the expectations are potentially too high. But what the bankers are promising are not being delivered at the end. And we are incredibly proud to be helping these these founders.

00:09:06:11 - 00:09:24:18
Todd Sullivan
We're selling well over 30%, 31% as of last month. And the next two exits that we have, one is 300% higher than what we agreed on at the beginning. And we just know that there is a better process to do this. And we're trying to share it. I really appreciate you saying that. It's like it is. It is our mantra.

00:09:24:18 - 00:09:42:08
Todd Sullivan
You had a bunch in there that I was agreeing with, but I'm hitting on those two things. Can we talk about the next exit? Right. This one's exciting. You've gone in, you've built a business and you're, you know, you're running the traps and you come to the exit and then you also get, you know, a slap in the face here.

00:09:42:08 - 00:09:43:20
Todd Sullivan
And I love to hear about it.

00:09:43:22 - 00:10:03:10
Chris Wise
Yeah. So this this is for fast forward ten years and then, you know, over that time had done a bunch of things, actually had some other companies that failed. And then I got into small business financing where we help were helping companies get loans for their business. And we were focused typically around the $200,000… $100,000 to $250,000 range.

00:10:03:10 - 00:10:22:19
Chris Wise
So relatively small, small amounts. And I had a whole international business. I was traveling internationally, which I couldn't get to how I got there as part of this. But we're working with U.S. businesses to help them get funding. I had a whole team by this point. You know, I have, you know, 15 or so years at up leveled by education.

00:10:22:21 - 00:10:45:20
Chris Wise
And so I knew how to build a business that could run without me. And and, you know, I was building it in that way, which, by the way, if you want to talk about a an essential element to the valuation of your business and the success of the transfer of the asset, it's that the owner is not involved in the day to day operations.

00:10:45:22 - 00:11:08:16
Chris Wise
And that's one of the hardest that I don't want to take us off track, but I want to come back to that. We'll put a pin in that we've come back to at the end and I can elaborate, so I'll stick on my story now. Sure. So, you know, I built this business in see in 2010. I had learned about I read the four hour workweek and I was like, man, I want to travel the world and I want to work remotely because I had always worked from home.

00:11:08:18 - 00:11:22:17
Chris Wise
And so I did. I started traveling and I said, All right, hey, you know, where in the world are the most beautiful women? And I was like, Colombia, boom, I'm going to Colombia. I'm going to look for a woman to travel the world with me. And all the while, while I'm traveling and just starting to live around the world.

00:11:22:17 - 00:11:42:10
Chris Wise
I'm running this business, running it and growing it, working every day to get myself out of the business. And so here come we're now we're in August of 2012, and I had met somebody. She was traveling with me. And, you know, at the time I was running three companies. So I had this one company, you know, the small business financing.

00:11:42:10 - 00:12:01:19
Chris Wise
I had two consulting firms as well. And we're flying in to have a six month world tour planned out. You know, we're going to go to L.A., then we're going to go to Las Vegas and live for a month and we're going to go back to Colombia. Had a whole the whole tour planned out and we're landing and the planes taxiing, and all of a sudden the plane stops.

00:12:01:19 - 00:12:26:17
Chris Wise
We're not even at the gate. And over the loudspeaker, they say, Welcome to Los Angeles. We're going to be stopped here momentarily. Customs needs to come on board. And the next thing I look up big black guys walking down the aisle and he goes, Christopher Wise, you're under arrest. And they handcuff me, walk me off the plane, and everybody's looking at me like I'm a terrorist.

00:12:26:17 - 00:12:48:00
Chris Wise
Yeah, Yeah. And in my mind, I'm like, What the fuck do they think I what could I have done? Why is this happening? And and I'm like, Are you sure you guys have the right Christopher Wise? And they're like, Yeah, yeah. You know, we have. Yes, this is you. We got you. And I'm like, And then they hand me off to the Secret Service, and then I'm like, Oh, Mike of the Secret Service.

00:12:48:00 - 00:13:17:12
Chris Wise
Like, I swear, I support Obamacare. Like, what's going on will finally get processed through Secret Service. And they're like, You're being charged with conspiracy for bank fraud. And I'm like, Oh, my God. So then I remember four years before I had hired a company to help me get a loan because these guys were doing larger loans. And they as I was going through the process and I also was referring people to them because we were doing these smaller loans, I was referring people to them.

00:13:17:13 - 00:13:38:08
Chris Wise
And so I was it was for this. And the short is I end up spending 19 months in federal prison for this. But the essence of it was I realized they were doing shady things. And I thought, man, there's no way I can get in trouble. They're doing they're doing the shady shit. I'm going to use the loan for legal purposes.

00:13:38:08 - 00:14:08:14
Chris Wise
I'm going to pay it back. And that was my mistake. That was my mistake. And because I was this national figure speaking around the country on small business loans and referring people to them, the government, they had it out for me and they wanted to get me, you know, they wanted to charge me with something. Sure. And so the mistake I made was I didn't realize that was illegal, so I benefited from the crime of another.

00:14:08:16 - 00:14:32:14
Chris Wise
And so if there's if there's there's one business lesson here is that if you realize that you're doing somebody working with somebody who's doing something shady and you're somehow benefiting from it, even if there's sometimes there's an awareness of it, there might be some liability like my just run, turn the other way, Find out your exposure from whatever happened, cover your ass.

00:14:32:16 - 00:14:49:06
Chris Wise
And that was the mistake I did. And I thought, Oh, I'm going to, you know, it's okay. I'm not doing it. I'm going to benefit from it. So there was this, like, sneakiness. I was felt like I had I didn't know it was illegal. And I ended up spending 19 months in prison from it, even though I, you know, got the loan, paid it back, all that stuff didn't matter.

00:14:49:08 - 00:14:52:18
Chris Wise
And so that was a very difficult business lesson to learn.

00:14:52:19 - 00:15:06:16
Todd Sullivan
That is a tough business lesson that is expensive. So 19 months you're in there thinking about what you're going to do when you get out. What's going through your mind? Like you're going to go back to entrepreneurship, how things are going to change?

00:15:06:18 - 00:15:23:16
Chris Wise
Well, I wasn't able so this is where I sold my business, right? So the real reason my second exit was I couldn't run my business from prison. Sure. Fortunately, you know, I had built it up so that I had a transferable asset and I had somebody in my company who said, you're going to be the CEO and you guys are going to run it.

00:15:23:19 - 00:15:46:18
Chris Wise
So I was able to sell my business to my employees, which which gave me some action When I got out of prison. I had some cash and I was able to get back into things moving, you know, relatively easily. But in prison, you know, honestly, I took the time not to figure out what I was going to do next, but I really took the time to go deep within and I meditated 2 to 4 hours a day.

00:15:46:19 - 00:16:25:23
Chris Wise
There was a practice where I learned to really connect with my I had actually learned this before prison, to really connect with my inner child and love and embrace all parts of myself. And I had some huge, massive internal spiritual realizations, transformations that coming out of prison now has greatly impacted how I help companies grow and scale and exit and and do all of that, because I think one of the biggest tragedies and I guess this is another key principle about, I would say just advice to an entrepreneur who's growing a business, whether you're exiting or not, So many people do it from a place of unhealthy, from a place of killing themselves in the

00:16:25:23 - 00:16:49:14
Chris Wise
process, or just or not supporting or taking care of the other important relationships in their life. And that's just a self destructive or a way to create success. It doesn't have to be done that way. In fact, when you push yourself so hard, it not only does it, you know, mess you up, you burn out or lose, you know, relationships or whatever, you're actually less effective.

00:16:49:14 - 00:17:11:22
Chris Wise
And so there is an ideal focal point or an ideal stream of the flow, right? If you're if you're in getting the burnout, you're not flowing right flow is that ideal state. And so a lot of that comes around self-care. And so now when I'm helping people grow, exit, whatever I'm helping them do, it's like, let's get into that flow state, Let's get to that ideal space of self-care.

00:17:12:00 - 00:17:28:12
Chris Wise
Part of that could be with meditation, but it's like if you're approaching burnout, you're not doing it the right way. Now, look, there are some times where you got to run the sprint, right? Where you might burn out temporarily, but not as the way to do the whole thing. And that's another huge lesson that has come from all of this.

00:17:28:14 - 00:17:39:11
Todd Sullivan
So there's a lot to unpack. Can I back up to the actual sale of this second business? Did you actually sell it, create the transaction while in prison?

00:17:39:12 - 00:17:43:19
Chris Wise
Yes. With an attorney. With an attorney, Yeah. It can be done.

00:17:44:00 - 00:17:49:14
Todd Sullivan
And was the structure and ease up in selling it to your employees or was.

00:17:49:14 - 00:17:52:06
Chris Wise
It was a basic it was basically just an asset.

00:17:52:08 - 00:17:58:12
Todd Sullivan
Asset purchase, but it created a cash flow situation for you when you got out. Right. So there was a little bit ahead.

00:17:58:12 - 00:18:09:04
Chris Wise
While I was in prison, I had cash flow and there was a lump of cash that I got from that. So there was two different scenarios. I was getting monthly and then I got a lot of cash.

00:18:09:04 - 00:18:25:19
Todd Sullivan
You know, it's just such a perfect example to like your point at the beginning that building a business, you have to be able to separate yourself. That business has to be able to run without without the CEO, without the owner. And you had learned, right, that over time and set up the business in order to for somebody else to step in.

00:18:25:19 - 00:18:47:06
Todd Sullivan
Right. Because we're all not going to be running our businesses someday. And if they're going to be transferable, they better be functional with another management team without yourself. Amazing story. Thanks. Thank you for sharing it. So okay, so you get out, right? You've got kind of this new vision or a view of the world and yourself. And so what's next you're turning that into.

00:18:47:06 - 00:18:48:07
Todd Sullivan
Yeah, helping others.

00:18:48:12 - 00:19:17:13
Chris Wise
So my genius super skill is organization, okay? Because I've been in business now for 30 years and I've had so many distinctions in education. I've worked with hundreds of different CEOs. And, you know, because while I had my own business, I'm always doing some sort of consulting on the side. And I just love it that I think, you know, at one point when I was deciding, well, hey, should I, you know, start my own company or should I continue to do more consulting, where should I focus?

00:19:17:13 - 00:19:40:13
Chris Wise
I was like, I actually think I'm better at the architecture in the organization of helping others than I am at building and growing my own business. And part of that just comes from one of all the experience of owning my own businesses. But just the way that I can step back and see all the different moving parts. And part of the biggest value that I bring in that my company brings is that we're not in the day to day it.

00:19:40:13 - 00:20:16:09
Chris Wise
When you're in the day to day, it's hard to see the bigger picture because you're so in the weeds and so you need somebody outside of your self, outside of your company that can look in and see what's going on and give you that advice and give you that advice is hence the the value that you bring to these and these podcasts, but also why somebody who wants to grow a business or wants to exit a business need somebody to guide and help them, not just from an experience standpoint, which is obviously valuable, but just from I'm not in the weeds and I can see things clearly and give you advice where I'm not attached

00:20:16:09 - 00:20:38:03
Chris Wise
to the energy and the stickiness of the business. You got to have somebody that's outside of the company to really if you if you want to succeed and not be a statistic, because here's the bottom line. If generally speaking, this is what I tell people I'm working with. If you don't get help, you most likely will fail. If you if you don't if you don't hire you, you don't have to hire me.

00:20:38:05 - 00:20:47:17
Chris Wise
You don't have help you, you most likely will fail. And most people people need to hear that because that's actually what most likely will happen.

00:20:47:19 - 00:21:06:13
Todd Sullivan
Yeah, I love it. We're the same, right? We say you don't have to hire us. Just please, please get help and get very industry specific help. When you're thinking about exiting a business. But you know, back to your point of having somebody come in and really look at your business to give you the roadmap of where you really need to go.

00:21:06:15 - 00:21:26:14
Todd Sullivan
You know, we built this valuation calculator and when I use it for clients, it is so revealing. It isn't just your business is worth X, it's why. What are the things that are really helping? What are the things that are really hurting and therefore the things that you can work on to improve valuation? And what I love about our relationship here is you are like the next step.

00:21:26:14 - 00:21:47:12
Todd Sullivan
It's one thing to kind of take a snapshot in time and have some suggestions, but going way deeper organizationally. Value drivers. I know you have long lists of what you can do for companies and just the realization of being able to see where I can improve. And then here is a game plan of how to improve. It's I opening.

00:21:47:12 - 00:22:10:23
Todd Sullivan
If founders do not do this, they are leaving so much on the table, I'm going to become a statistic, just like you said. So I cannot agree with you more. And we personally have to all step aside. Right? We are. We are great at certain things. We wear tons of hats, but getting outside help is usually not one of the things that's top on our list of things that we're good at and we have to be.

00:22:11:01 - 00:22:30:00
Todd Sullivan
So thank you. Thank you for sharing that. All right. So you got two exits under your belt. Second one is just amazing that you actually sold the business from prison. I love that. It needs to be like the title. And now you've said, all right, I've figured out my superpower and I'm delivering that. And you're delivering it from all over the world, right?

00:22:30:00 - 00:22:30:09
Todd Sullivan
You've kind.

00:22:30:09 - 00:22:31:02
Chris Wise
Of. Yes.

00:22:31:04 - 00:22:37:16
Todd Sullivan
Stepped into this kind of entrepreneurial nomad life. Can you tell us a little bit about building that business and lifestyle?

00:22:37:18 - 00:23:00:12
Chris Wise
Just Yeah, So you it started in 2010 when I read that book, Four Hour Workweek, and then I started traveling, you know, prison happened. And then again, I'm back at it again. And I just it's passe if you can do if you can deliver your services in front of the computer, then you can do the same thing. And so you can build a company this way.

00:23:00:14 - 00:23:25:14
Chris Wise
Now, are there certain businesses where you got to have physical infrastructure? But I love as a consultant, I can do it and I actually have an international team. I got people all over the world and we serve and we serve our U.S. clients. We do it all through Zoom and yeah, it's just, you know, so right now I'm in Colombia and so typically I'll spend 1 to 3 months in a city, I'll be six months here in Colombia, and then after this, I'll go to to Brazil.

00:23:25:14 - 00:23:31:00
Chris Wise
And so it's just a it's an amazing lifestyle along with that amazing work stuff that I'm doing.

00:23:31:04 - 00:23:47:10
Todd Sullivan
Yeah. So cool that you can be anywhere but that you've built a network of people that can help. And as I sense right, there's industry expertise, right? So if you're helping clients that are in SaaS or Aerospace or whatever, you can lean on the right talent because those know that. Yes, please.

00:23:47:11 - 00:24:05:13
Chris Wise
That is that is something that took some time to actually build. So we're just my own self. I've had quite a bit of experience in just about every industry, but more my personal experiences, more in tech and SaaS and e-commerce and actually manufacturing is where a lot of my experience has been. But I have a whole team and so that brings a lot of experience.

00:24:05:13 - 00:24:24:00
Chris Wise
But you know, there's times when I'm looking at a company and I'm diagnosing where what expertise is needed to solve which problems and I spot it. But our first I look at my team, if we don't have it, then I, I have somebody on my team that can specifically go out and find people very quickly so that we can bring them in.

00:24:24:00 - 00:24:43:00
Chris Wise
So one of the big values that I bring to companies that we're helping grow and get ready to exit is they can get all of those resources from one place. Yeah, and because I'm architecting it and I can spot when there's a gap piece missing and say, Oh, that's what we need to bring in here, that's what we need to bring it here.

00:24:43:00 - 00:25:15:12
Chris Wise
This person is going to be temporary. This person is going to be part time. I can map all of that out because that's my genius skill. And then we just bring in the right talent to fill those gaps. So because one of the biggest time wasters for people trying to get somewhere who actually, you know, who who know they need help is finding the right people and actually not only finding the right people, identifying what's the help they need, since that's a skill set, it's so much saves the client so much time and trying to, you know, one identify what exactly they need and then two trying to find them.

00:25:15:16 - 00:25:38:06
Todd Sullivan
We're so similar even though we're really focused on the exit. Like my last call, I'm on with an entrepreneur who has an amazing business. He wants to buy a public company. So we are helping with that. And we're at a stage where it is an M&A attorney that we need specifically right now. And we have a roster of them and we have a roster of those who have worked in divesting pieces of public companies, whole public companies.

00:25:38:08 - 00:25:55:14
Todd Sullivan
So it is really identifying what do you actually need and then who is really good. We build, you know, M&A teams and we think we build world class M&A teams. But you're exactly right. Like as a founder that we're not doing that on a daily basis. So where do you go to get kind of all of those resources?

00:25:55:16 - 00:26:13:12
Todd Sullivan
And that's awesome when you're growing a business, Those are different skill sets. And I know we we know we spent years amassing this kind of database and building relationships with all of us, those experts just like you are. I know there's going to be some, like really good ways to be working together. Chris, You know, is there anything else?

00:26:13:12 - 00:26:29:09
Todd Sullivan
Right? You're building this business, you're enjoying life. But, you know, we're trying to like teach our fellow founders, business owners really about M&A. Is there anything else that you want to share advice that you've learned along the way or you impart today in your business?

00:26:29:11 - 00:26:52:03
Chris Wise
Yeah. So I would say in general, if there was kind of like a route to focus on, it's how do you for an owner to think about because it will trigger everything else. How do you get yourself out of the day to day? Because if you think about in the end that becomes a priority. It's going to create all these other things that have to be created inside of your business.

00:26:52:05 - 00:27:17:05
Chris Wise
Now, in general, all these other things aren't sexy. You know, a functional accountability map. Even sometimes people think we have an AWD chart that would just write exit job descriptions, a business model canvas process, mapping, all their business, creating your profit, like how do you actually create profit? What are your profit levers and how does that create profit?

00:27:17:07 - 00:27:35:12
Chris Wise
How do you drive revenue? Well, what are your revenue levers like having all those mapped out? So there's several reasons why you want to do this. The first is, so if somebody else in your company, once you could replace yourself, if you're seeing those two, if somebody else in your company leaves, somebody else would come in and very quickly understand what's going on.

00:27:35:16 - 00:28:02:05
Chris Wise
And then three, it's creating transferable value because now it's your business is so clearly explained and then when it gets trained, somebody else can be like, Boom, I understand exactly how this works and it's all those things that increase the value. But a lot of times business owners get so blinded and they're like, it's just about driving revenue and they just focus on that without all the documentation and infrastructure that's needed, you know?

00:28:02:09 - 00:28:24:01
Chris Wise
And so it's all of that stuff actually enables the owner to get out of the business because you got to have frameworks that other people can understand and then take ownership of responsibility. So if I would say there's a core focus on how do you get yourself out of the business, and then all those other things are tools and maps and frameworks that will enable you to help you get out by empowering others to know how to manage your business.

00:28:24:01 - 00:28:33:06
Chris Wise
And then you've built the transferable asset, you know, because then it's all documented. But like, here you go. Here's this thing I've built and I'm not involved in it, but it's this is it.

00:28:33:08 - 00:28:54:11
Todd Sullivan
You know, all of that documentation, that engine in, in several different departments, all of those engines, you need to have that and show that when you're going to sell a business anyway. Right. It's going to be part of your data room. So if you're building it from scratch later, you're just going to be kicking yourself. You could get such a benefit from having all of those pieces in place very early on.

00:28:54:12 - 00:29:17:22
Todd Sullivan
But it brings up the question at what point, like, you know, on day one of a business, it is about I need a customer, I need to deliver, I need to impress that customer, I need to drive revenue. At what stage do you feel like, okay, now is the point that I need to think about stepping back and having my my role replaceable because systems are in place to to enable that.

00:29:18:00 - 00:29:39:16
Chris Wise
I would think it's a general thing of always thinking about how can you as the owner, further step out of the business while continue is seeing an increase in revenue and profitability. Yep, yep. Because you as an owner always want to be focusing on more and more valuable activities. And so I would say that would be the guiding principle.

00:29:39:18 - 00:29:48:08
Chris Wise
You know, how can you as the owner, focus on more and more and more valuable activities in part that's getting you out of the details of the business.

00:29:48:10 - 00:30:14:14
Todd Sullivan
Yeah, I hope for our listeners who have listened to multiple podcasts, this has come up many times. Even Christine Nicholson talks about this idea that you should be thinking about your a $10,000 an hour person, and if you are not doing $10,000 hour work, somebody else can do it and you replace that. And over a period of time you become very you become replaceable and therefore your business is very transferable to somebody else.

00:30:14:16 - 00:30:19:01
Todd Sullivan
You know, it's a common theme. It needs to be hit over and over and over. Chris this is awesome.

00:30:19:01 - 00:30:23:13
Chris Wise
And it's hard. It's really hard. Yeah. So that's why this is so I get help.

00:30:23:18 - 00:30:50:15
Todd Sullivan
And it's why the statistics are the way they are, right? That's right. And so, yeah, your your service, your frameworks, your we talk a lot about translating emotion to finance and finance to emotion in, in the kind of context of M&A. But I think you are really creating, hey, where do you stand today and what are the what are the things that you need to do to improve the value of your business and make it transferable, make it sellable?

00:30:50:17 - 00:31:09:17
Todd Sullivan
And so not only revealing all those things, but helping them, having the ability to help them through that process, it's just invaluable. So really encourage people, whether it's working with you or somebody like this, it's it's paramount to being successful at the end. There it thank you so much for this time Is it any anything else that you would want to share?

00:31:09:18 - 00:31:11:16
Todd Sullivan
I mean, you've given us gold, so.

00:31:11:18 - 00:31:38:22
Chris Wise
Yeah. Well, I would say take care of you in the process. Honor yourself, your mental space, your emotional space. The more healthy of an individual that you become, the more healthy of a company and environment in all the people that your business is impacting that that actually is it. So when you think about transferring asset, let's not transfer a toxic asset, even though it could be financially well, it still could be a financially well toxic asset.

00:31:39:00 - 00:31:49:20
Chris Wise
So let's focus on that impact on a personal level. Makes a big difference in more ways than you can imagine. And so I'd say that is also really key element.

00:31:49:22 - 00:32:00:07
Todd Sullivan
That feels like a podcast number two with you. So there's a lot there to thank you for it. Thank you for sharing. Chris Yeah, I really appreciate it. Thank you.

00:32:00:09 - 00:32:01:23
Chris Wise
Yeah, you're welcome.

00:32:02:01 - 00:32:24:04
Todd Sullivan
Thanks again for listening to the Cashing Out podcast. For more Founder Exits stories, please subscribe to the Cashing Out podcast on Apple, iTunes, Spotify, or wherever you listen to your favorite podcasts. And please remember exercise dot com and the Cashing Out podcast are for entertainment purposes only. This should not be relied upon as the basis for investment decisions.