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Chapter 1: What is the main topic discussed in this episode?
build the company from the start without you. If you can do that, that's a scalable company that now has enterprise values a lot greater than what the value would be if you're the one in the day-to-day running it.
A lot of entrepreneurs, they get into the business, then they start making money. A lot of them don't even ever think about selling the business. How do you think about it? When's the right time to think about it?
The right time to think about it is probably five to seven years before you're even considering it because most people think about it like when they want to sell it and it's too late. You've got to really, I always say if you're going to set up your business, set it up to sell. You may never exit, but do it from the beginning.
If you want to grow an organization and have a valuable workforce that values the business and you as a leader, you have to really understand.
My name's Rudy Moore, host of Living the Red Life podcast, and I'm here to change the way you see your life in your earpiece every single week. If you're ready to start living the red life, ditch the blue pill, take the red pill, join me in Wonderland and change your life. Hello and welcome back to another episode of Living the Red Life. Joining me today is Rocco.
He's a visionary, entrepreneur, and innovator like most of us, building something amazing. So I'm excited to dive into his lessons and his journey. So welcome to the show. Thanks for having me. So tell everyone if they don't know who you are, let's start with, you know, who are you and what do you do and how did you get here?
That's a great question. So obviously I've been practicing law now for over two decades.
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Chapter 2: How can entrepreneurs prepare their business for a successful exit?
So business lawyer by trade. But what my passion is actually helping companies grow, like systematize and then exit. So I go in the small to large organizations, help them look at all their problems, fill the gaps, then get them ready for exit. Yep. Sell it multiples.
Well, and it's interesting because, you know, a lot of, you know, I've worked with a lot of attorneys and lawyers and they're very, you know, stay in the paperwork on the legal clauses, right? And I mean, what you're doing is so great because not only do you understand business much better to help advise on the legal side, but...
Um, you know, actually, uh, I've done a lot around educating entrepreneurs through my programs over the decade on how to build to sell. And I was fortunate to learn from some friends that had sold $300 million plus companies or done a hundred plus exits.
And they taught me and, uh, you just, you know, you don't learn this stuff, but most people learn it when they sell their first business and lose tons of money. So when I learned it, I was like, I need to share this stuff. So it's. Let's start there. How did you get into helping entrepreneurs and business owners understand how to structure to sell?
So I've been an entrepreneur basically my whole life, and being a lawyer was kind of a means to an end for me.
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Chapter 3: What are the biggest mistakes entrepreneurs make when planning to sell?
I knew that I wanted to be able to start my own business, but I didn't want to be a lawyer working in a big firm. So I started a law firm when I left corporate America, and I had my own businesses that I grew and sold myself. And then I just started working with, I started with a lot of athletes and entertainers where they were kind of- Well, I know they need it a lot, right? All the legal side.
Well, the interesting part is, yeah, they do and they wanted a lot of the advice for free. And to me, I wasn't starstruck. I'm like, look, you need me more than I need you. So I started working with them and then I just saw this need in the marketplace, lawyers over complicated things. So I always said, how do I go in and simplify things?
And our tagline for our law firm is redefining legal services. it's really a consultative basis. So I go in with these companies and look at, most of the gaps tend to be in leadership and operations. They have the right people but in the wrong seats and they have broken processes. If you fix the people problem, you fix the process problem, profit takes care of itself.
So I've just always had a knack for that and that's what I do. I go into these companies and really help them tear things apart, rebuild it with the pieces they have, and then make the company three to five times more valuable than it is.
Yeah, it's interesting. And as I've built many companies, I've exited out of a couple. But now when I build a company from the ground up, it's like I build it without me involved. Whereas when I started at the office, it was like you build everything based on you, and then you have to peel away 100 plasters to try and get out of it. 100% right.
And I think that's a great starting point because I can try and teach people. I'm like, even if you don't plan to sell ever, just doing that makes a healthier business because it's you're not the bottleneck and you're empowering the team and bringing in the right people. You have to have the right systems if you're not involved.
When you're involved, you can kind of like hold a thousand pieces together as an entrepreneur, but it's not a healthy way to run the company.
No, it's not. And that's where entrepreneurs get burned out. Like that's truly, I faced that myself with my law firm. I had to let go of a lot of things and trust my people to run parts of the organization. And, you know, your point is, is Absolutely correct word. Build the company from the start without you.
If you can do that, that's a scalable company that now has an enterprise value a lot greater than what the value would be if you're the one in the day to day running it. And it's it's hard for entrepreneurs to do because it's our baby.
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Chapter 4: How do leadership and operational gaps affect business valuation?
Yeah, absolutely. And we talked a lot about selling the business. But let's just talk about that for 30, 60 seconds, because I used to also think until Years ago, I learned from people much smaller than me and more experienced, it's like, oh, I want to own a $200 million company, I got to grow $200 million in revenue.
Where it's actually like, no, you can grow $100 million revenue and acquire two businesses, for example.
Yeah, you can pick up a lot of businesses through an acquisition or merger. Either you pay them their price, or you do it on your terms, or vice versa. So a lot of times, these companies, like I said, the ones that are transitioning out that think their kids are going to take over, you can get those for no money down. Just pay them an earn out. Say, hey, I'm going to buy it.
Come and take your business over. I'm going to make you profitable. If your numbers are legit, we're going to pay you X over so many years. And if you stay on to help us increase business, you'll get more multiple of it. Well, you don't have to pay any money out of pocket. There's a ton of weed structure deals like that.
Yeah, there's so many. And I would say, too, as a lesson, a lot of people want to sell. You would never know unless you ask. So even an example of this is there's a restaurant on the beach here that I like that I want to buy. And I told my assistant, I said, ring, see if they want to sell. She's like, why? They've not listed it for sale. It looks busy. Why would they want to sell? I'm like,
Trust me, most people want to sell. They get an opportunity. Got to ask the question. Most people are afraid to ask the question. So sometimes it can also, the point of telling that story a bit is you can be strategic. Like you have this agency and you know this podcast agency that's like perfect for you. It has all your perfect clients and you know the guy.
just ring him up or text him, because he might be wanting it. Again, it's like the boat story with my staff member. They might be having a kid or want to move to a different city or country. You just never know unless you ask. So that's another big thing with buying, is always make the ask.
MARK BLYTHEUSE- Yeah, absolutely. It's 100%. And that's where most deals get done. Very few deals get listed for sale. It's all the backdoor stuff that's happening. It's just knowing the right people. People come to me all the time because I have a deal flow that's coming to me constantly because I have a thousand clients in these spaces. So everyone's for sale for the right price.
I would sell my business for the right price. If someone offers me $100 million for my law firm, sure, I'd probably take it. So just, you're right, ask the question. Just don't be afraid to communicate.
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