Do you want to catapult your business to the next level? Michelle Seiler Tucker is the founder and CEO of Michelle Seiler Tucker and an expert in Mergers and Acquisitions, having bought and sold hundreds of companies. In this episode of Badass CEO, Michelle tells you exactly what you need to do when you are growing your company, so you are prepared for an exit strategy right from the beginning. She talks about her 6 Ps, which are a necessity for a successful business. Michelle's newest book with Co-Author Sharon Lechter, “Exit Rich,” launches in January, but you can get early access to it by visiting her website exitrichbook.com.
Table of Contents
- Being an expert in Mergers and Acquisitions
- Good at Closing and Good at Making Money
- Overextending Is Usually Not Sustainable
- Establishing The Professional Relationship
- The 6 Ps Explained in “Exit Rich”
- Seek Professional Guidance
- Working On or In the Business
- Creating Company Culture
- Advice for Starting a Business
- Links To Michelle Seiler Tucker and Books
Being an Expert in Mergers and Acquisitions
Mimi: Welcome back to the Badass CEO Podcast. Today we have Michelle Seiler Tucker, and she's a founder and CEO of Seiler Tucker Incorporated. She's a 20 year veteran in mergers and acquisitions, having sold and bought hundreds of businesses. She's also written three books, with her newest one launching in January, called Exit Rich. Thank you so much for coming on today.
Michelle: Thank you for having me. It's a pleasure to be here.
Mimi: I'm so excited to learn about… you're an expert in M&A, which is pretty badass because I've spent a little time in M&A, and it's hardcore. When I was at Kidder, Peabody right out of college, and it's intense. I'm really enamored with your profession, and I'd love to just hear how you got into it.
Michelle: Sure, I'd love to tell you. And you're right, it is intense, and it's not for everybody. I've always been an entrepreneur. I've always owned small businesses. I've owned publishing, events, space businesses, just all kinds of different things. I did kind of get stuck in corporate America when I started working for Xerox. They actually recruited me, and I was there for about six months, and then my nickname was “The Closer” because every time that somebody couldn't close something, they would bring me in, because I could close everything.
Good at Closing and Good at Making Money
I was there for six months, and my management team came to me and said, "Michelle, you need to interview for the Vice President position, overseeing 85 to 95 sales people, the Regional Vice President of Sales position." And I said, "I don't…" She goes, "You'll never get it, but you should it." And I go, "Well, why would I interview for something I'm never going to get?" And she said, "Because the process, the process is going to teach you so much." And she was right. She said, "You'll never get it because you're up against people who have been here for years and years and years. You've been here for six months." So I said, "Okay, I'll go ahead and do it."
I did, and it was a grueling process. It was three months of demonstrating high-level equipment to high-level executives, asking them questions, doing presentations, asking me questions, et cetera. Anyway, I ended up getting the position. I did that for about six months, and I'm like, "I don't really like it. I don't like it." I'd say because I love selling, I love getting to know what my clients’ needs and problems are, and I love finding solutions and helping them solve problems.
When you're in corporate America, and you're in high-level positions, you're not doing that. You're just having meetings and schedule more meetings. I was making good money. I was making six figures plus benefits and ended up looking for a franchise to buy on the side, and I stumbled across this franchise that had two locations. My husband actually knew the partner's spouse, and they knew of me, and I said, "Look, I want to buy your franchise. I'm going to keep my job at Xerox, but I want to operate something on the side because I love entrepreneurship." And I thought a franchise would be easier.
They said, "We don't want you to buy our franchise, we want you to partner with us because we know of you and your reputation, and we'll give you a franchise."
Michelle: That's how my franchise development, franchise consulting, franchise career started. I ended up selling hundreds of franchises for them. I actually put them on the map. Within six months I made more money than I made in an entire year at Xerox, so I said, "Okay, Xerox, I got to go."
Mimi: Which franchise was this?
Michelle: I would rather not say, and here's why I'm not going to say …
Mimi: That's fine.
Overextending Is Usually Not Sustainable
Michelle: .. they did what most companies do. They grow, grow, grow, grow, grow, but they don't build a solid foundation in which to handle the growth. So then, when they start really growing and expanding, they don't have the six Ps in place, which I talk about in Exit Rich that we'll get into momentarily. They ended up crumbling, and they were over promising and under-delivering, and these franchisees are my friends. I would go to their weddings and their hospitals when they had babies and stay at their house when I came into town. I was always taking up for them because they're the clients.
Well, the franchisor is upset because they're like, "Well, you're our partner." And I go, "I don't care if I'm your partner. You're not doing the right thing. The right thing is to take care of the franchisees." We just couldn't see eye to eye, so I said, "You know what? Buy me out. I'm done." And they said no. So, of course I had to get legal involved for them to buy me out, and that's why I'd rather not say.
After that, I decided to transition into selling companies because I'm like, "How much different could it be from selling a franchise to selling a business?" Well, obviously, it's very different. I transitioned to selling smaller businesses, then very quickly, I transitioned to selling businesses $10 million and up. We saw businesses $40, $50, $60, $70, $80 million, some bigger. And very quickly, I also transitioned to fixing businesses because, as Steve Forbes says, "Eight out of 10 companies will not sell." And Steve Forbes endorsed my book, Exit Rich."
I said, "Gosh if I don't fix them, I'm not going to eat." I started fixing them, growing them, and then I came up with my Build To Sell Program so we could actually build the business to sell it for the owner's desired price tag. That's how I got into it, and 20 years later, over 1,000 transactions, that's where I am today. So I've spent 20 years in the trenches, and I don't just sell businesses. I buy businesses, I flip them, I partner with business owners who need capital, who need expertise, who need the Build To Sell Program, and then I build those to sell. So at any given time, I'll own five to 10 companies.
Establishing The Professional Relationship
Mimi: So you act as a consultant, or are you actually an owner in these companies?
Michelle: No, I'm an owner. I don't act as a consultant. I don't trade time for dollars. I decided a long time ago I didn't want to do that, and you know what? God bless the consultants out there that do it because they deserve every penny of it, but that's not my model.
Mimi: And how do you find your businesses?
Michelle: Yeah, a lot of them find me. I've been in business for 20 years, so word of mouth, lots of referrals. But I do a lot of marketing, so books, I mean this is my third book. Books bring us a lot of clients. We have a pretty large buyer database, so our buyers a lot of times will tell us about businesses for sale. But we do Google; we do everything. All the marketing things you can think of, we do it. Plus, we have a podcast called Exit Rich, and we get clients from that too.
Mimi: That's great. How many businesses do you currently own?
Michelle: Right now, I own seven.
Mimi: Okay. You're like a woman after my own heart because I try to do too many things. I have like 10 different pots going on, and my husband's always like, "Just focus on one." Do you know like the book One? Did you read that book? One?"
Michelle: The One Thing by Gary Keller.
Mimi: I read, and I was like, "This is not for me. I can't focus on one thing." Right? Because everyone says, "You got to just focus on one thing." And I'm like, "I can't, I don't know how to focus on one thing." So I assume you fall in that same-
Michelle: I do. But here's what I do. I love The One Thing, and I do believe in the one thing. Business is my one thing; I don't do real estate. Yes, I'm in the stock market. Yes, I have a financial advisor. But I don't really play in the stock market; I don't do real estate, I don't do all those other things. Business is my thing. And yeah, some of my businesses are different. I have medical, legal, marketing, long [inaudible 00:08:09] clinics. I have graphics. They're all over the board and not really synergistic.
But business is my one thing, and let me tell you something, business is business. I mean, business all needs basically six Ps, and if you can function on those six Ps, no matter what industry you are in, they will be successful.
The 6 Ps of “Exit Rich,” Author Michelle Seiler Tucker
Mimi: Great. Could we talk about your six Ps, which are in your book?
Michelle Seiler Tucker: Of course. So number one P is the most important, really. Well, they're all important, but people. You can't have a business without people, and so many entrepreneurs make the mistake of trying to do everything themselves, and you can't do that. You have to focus on your strengths, hire your weaknesses, and I don't care if you don't have the money to hire somebody. Figure it out. Get an independent contractor.
I'm in between four colleges. I have a waiting list of interns.
You have to have the right people in the right seat. A lot of companies have the right people in the wrong seats. You also have to ask the who question.
Who opens up your business? Who handles the customers? Who deals with customer service issues? Who deals with manufacturing? Distribution? Logistics? Who deals with quality control? Accounting issues? Legal issues? Environmental issues? Who? The clue to who it is should never be you.
Your name should never be next to the who. You need to build a business that can operate without you. You have to be visionary, and you need an integrator underneath you, and you need the right people in the right seat, the right hoops. Does that make sense?
Michelle: People as number one, you don't build a business, you build people. People build a business. And then, number two is the product. You got to ask yourself, is your industry on the way up or the way out? Is your industry thriving or dying? If your industry is thriving, ask yourself, "Do I have an Amazon, or do I have a Blockbuster?"
And if you have a Blockbuster, it's time to pivot. It's time to align yourself with an expert, either it's me or a consultant or somebody who's been down your path before. But you need to start asking yourself transformational questions, get out of transactional, become transformational. I'll give you an example,
Three questions that can catapult your business to the next level. Completely change your business forever.
- What business are you in?
- What do you do really well?
- What business should you be in?
Amazon, let's just talk about Amazon. What business did they start with?
Michelle: Books. They asked themselves, "What business are we in? We're in books. What do we do really well?" They asked themselves, what do they do really well?
Mimi: Yeah, fulfill.
Michelle: What are they doing now? Fulfillment.
Mimi: Yeah, of everything.
Michelle: It's not that difficult. It's not that difficult. But those three questions there changed Amazon's business forever and made them a multibillion-dollar conglomerate, and they changed the way that consumers buy products and services. They changed consumer's buying habits forever, just like Apple changed the way that we used phones and technology. Those three questions are very important to ask yourself in business, and sometimes you need an outsider's perspective because when you're in your fog, it's foggy, so you need somebody who can see things that you do not see clearly.
Number three processes and processes are typically never thought about. Meaning, nobody goes into business and goes, "Let me think about my processes." Unless you're McDonald's, did you ever watch the movie, The Founder?
Mimi: Yes, I love that. That one scene where they do the whole orchestrating of the people in the back?
Michelle: That's processes. That right, there are processes. What McDonald's did, and this is what nobody does, McDonald's said, "What's going on right now?" It was in the 40s, and all the fast-food restaurants were drive-ins, right?
Mimi: Mm-hmm (affirmative).
Michelle: They came out with roller skates. What was the problem with that? The problem was the food was always cold, the order was always wrong, and it took forever. McDonald's says, "We're going to create a fast-food restaurant, but we're going to deliver great food, tastes great, two minutes or less." That's their mission statement. That's their customer experience that they want to create. So in order to create a customer experience, you have to design your processes with the customer experience in mind.
Most business owners do it backwards like somebody complains, and they're like, "Oh, well. Let me try to fix that process." McDonald's said, "This is how we're going to do it." They went to the [inaudible 00:12:36] court just like you said, they took all their employees, they mapped it all out, they kept changing it, they kept bumping into each other. Remember, and they kept changing it?
Michelle: And they came up with who's going to take the order? Who's going to toast the buns? Who's going to cook the burgers? Who's going to put the pickles on the buns and give them to the client in two minutes or less? Because of that process, it doesn't matter if you go to McDonald's in China or Russia or New Zealand, or the USA. It's the same experience.
Michelle: And they can train people like that, so every business owner needs to design the processes with the customer experience in mind like McDonald's did and make sure it's documented and make sure employees are trained on it. Most business owners don't even have a policy and procedure manual. They don't even have an SOP checklist. Right? Processes can make or break your business.
Mimi: I like to use the word systems too, right? That's very similar.
Michelle: Yeah, processes. I mean, I'm all about the six Ps with processes.
Mimi: Ps, yeah. The same idea, it's like a system. Because I have learned now, I say to my kids, I have five kids, and I say to them all the time, "One thing I've learned in life-" Michelle: You have five kids?
Mimi: I do have five kids.
Michelle: I have one.
Mimi: And I always say to them, "The one thing I could give you advice, the earlier you can create systems in your life if it's like where you put your tennis stuff every day or have a system that you just automate, and you don't think and it's just done. Everything." If it's from keeping track of whatever list, right? I keep trying to do that with my company, "We need a system. This is not working. We need a system, so we don't drop balls."
Michelle: Yeah, yeah. The reason I call it processes is, well, it's the same as processes, policies and procedures, systems.
Mimi: Right, it's the same thing. Yeah.
Michelle: Yeah. I mean I do it for my clothes now, all my clothes are color coordinated and all my jackets and shorts. It's a system, right?
Michelle: That I developed for myself. The fourth P is proprietary. Proprietary is the biggest value driver, the highest value driver, and proprietary. There are six pillars of proprietary. Number one is branding. The more well-branded you are, the more you can sell your company for as long as, here's the important thing, as long as your brand is still relevant in the mind of consumers. Nobody's going to pay money for the Blockbuster brand, and it is busted, right?
Mimi: I have a question about that, though, because they're… I see a lot of people have taken… like Tai Lopez is buying a lot of brands that are kind of on the way out, like he just bought Radio Shack, right? That's like a Blockbuster, so he's buying them, and because they already have brand recognition, there is value to them.
Michelle: He bought Dress Barn too.
Mimi: Yeah. He's taking these names that are gone bad and-
Michelle: Well, there is a value because it's early on. Blockbuster died a very long time ago.
Mimi: Right. So that's the difference, okay.
Michelle: There's really nothing now. Toys R Us, even Toys R Us still has brand recognition. K Mart, Skymart still has brand recognition. Pier One is another one that went out of business.
Mimi: [inaudible 00:15:28] right? They brought that back.
Michelle: Correct, correct. You can bring things back; it's called rebirth. I always quote the cycle of a business, "The cycle of a business is just like a cycle of human life, right? You're in the incubator, just like a business sits in the incubator, and then you die. But with businesses, you can be rebirthed." But there is value in the brand, and Tai Lopez is doing it early enough. You got to do it early enough when there's still brand followers., There are still people who love the brand and are very upset that the brand went out of business.
Now what Tai's going to do, which is what many business owners don't do, and this is why business owners are going out of business, is he's going to innovate. It's called AIM, innovate in the market, always innovate in the market. That's what he's going to do because so many businesses are going out of business. Tai's doing it the right way, and there is money in that brand. The biggest brand in the world, do you know what the biggest brand is?
Mimi: I was going to say Apple or Amazon, but yeah.
Michelle: $389 billion. Amazon will get there. They're not far behind. $389 billion, that's just for the brand. That's not cashflow in the toy assets, real estate, or anything else. That's just the brand alone. Build your brand. You'll build your value. And then trademarks are also very valuable. Buyers will pay for trademarks.
Seek Professional Guidance
Here is a mistake that business owners make, they start a business and go get a trademark in their state, but they never check the government website to make sure it's available. And so they never get a federal trademark, so they could be in business 10 years, and all of a sudden, they get a cease and desist letter in the mail, and somebody else owns their trademark now.
Mimi: There's a different trademark website for the state and for the nation?
Mimi: Got it.
Michelle: You need to go on a government website. Don't try to do it alone, so many people try to hire that site on the website. I forget the name of it. Don't do that. It ends up cost you more money than just hiring a lawyer. I have a lawyer that does my trademarks for like $1,700. Get a lawyer, get a trademark, protect your company because here's what happens. If you get that letter, business owners spend thousands upon thousands of dollars, but they're just going to lose.
You have to change your company name. All that branding you've done, all that work into building your brand, is now down the drain. Protect your IP. Also, get patents, patents are very valuable. We sold a company for $18 million that had 18 patents, and then also contracts are really valuable. So if you have any exclusive contracts, distributor contracts, manufacturing, vending contracts, the most valuable of all our client contracts, but here's a caveat to that, all contracts must have a transferability clause, and I will tell you, 99.9% of them never do. So 99.9% of all sales are asset sales, not stock. Therefore the contracts are not transferable without that language, so your deal can and will fall apart.
Michelle: Then, the other valuable thing in proprietary is databases. We have over 28,000 buyers in our database. We probably have the largest in the industry. But here's the deal, databases are very valuable to buyers, especially synergistic buyers. If they can repurpose and retarget those databases like Tai Lopez has a huge database. That's worth a lot of money. Facebook paid $19 billion for WhatsApp, and WhatsApp was hemorrhaging money. They had a billion users, so they were buying a billion users. That's what they were buying, not the cashflow. They were buying the database because they knew they could all align and monetize.
Then the other big valuable thing in proprietary is what I call business real estate. That's not a building or land. That's business IP real estate. What that means is, let's say that I have a skincare product, and it's on Oprah's Favorite Things. Do you know how much money people would pay to get on Oprah's Favorite Things? Buyers will buy that. Let's say I have a diet product that has been endorsed by Glenn Beck or Rush Limbaugh. They can only endorse one product at a time, one skincare company at a time, or one diet company at a time.
Or let's say I'm making pillowcases and sheets, and I'm number one on Wayfair. That's prime real estate that synergistic and competitive buyers will pay top dollar for. When we look at evaluating businesses, we look at the synergies because we know we can create a bidding war, and buyers will pay more for these synergies that are valuable to their current company and will catapult them to the next level.
Then the 5th P is patrons, which is your customer base. A lot of problems with clients, business owners, is they have customer concentration, not customer diversification. The golden rule is 80% of your revenues comes from 20% of your business, and if you lose a client or two, you could be out of business. Also, if you've been in business 20, 30, 40, 50 years, your clients are probably aging out. They have to be replaced with new clients.
Then the last P is profits. Profits are never, ever the problem. They're always the symptom of not having one of the other Ps.
If you don't have the right people in place, you're going to lose money. If your product is on the way out and not on the way up, you're going to lose money. If your processes are broken, you're going to lose money. If you haven't protected your IP, you're losing money. If you lose your client base, you're losing money. Profits are never a problem. Everybody comes to me and is like, "Michelle, my company's not making any money, that's the problem." I'm like, "That's not the problem. This is the problem."
Mimi: Right. That's just the symptom. So how long do you typically own? When you go in, and you buy a business, how long do you typically own it before you decide to sell it?
Ownership or partnership
It just really depends upon the business. One business I'm in right now, we've been in business together since 2015, and that business has had some growing pains, and it depends upon so many things. Because buying a business is different than partnering with a business partner, so buying a business, I'm in control. Partnering with a business owner, you are working with that business owner, trying to grow that business owner, because you can only grow the business as much as you can grow the business owner.
I typically do partnering deals because, number one, I want to save that owner from going out of business. I want to save that owner from not only losing business assets but losing their personal assets. A lot of times, I want to save their marriage because they're married and they're both working in the business. And a lot of times, it's easier than just trying to buy the business from scratch because when you buy the business from scratch, you're just dealing with the employees, and you don't have anybody there that really has a [crosstalk 00:22:08] interest.
Mimi: To run it. Yeah. No, that makes sense. What have you found to be the primary cause of the problem? It's like when you come into a business, and you need to improve it, have you seen a trend?
Michelle: Yes, and the trend is typically that the owner's stuck working in the business, not on the business, and they don't have any of the six Ps. They don't have the people in place. I'll give you the graphics example. I had a graphics company call me and want to sell their company. We were on the phone for maybe about, I don't know, 15, 20 minutes and usually nobody talks to me. They usually go through my whole staff, but that day I just said, "You know what? Put the call through." And I don't know why, I just said, "Put the call through."
I talked to this gentleman, and he was very distraught but also very passionate about what he does. He said, "Michelle, I just can't do this anymore. It's me, my wife, we have one employee, we have an office on our property right outside our house, and I just can't do this anymore. I don't have the business acumen to grow this company to the next level, my wife and I are working 14 hours a day. We're about to kill each other, probably get a divorce. Plus, I took out a mortgage against our home, and we could lose our home. We need to sell our business, and by the way, we told our one employee that we're going to sell or close."
Doing due diligence
Michelle: But then he said, "But Michelle, we have a great product. We're superb; nobody in the industry can compete with us. Our art is a state of the art. Our install is state of the art, and our customers love us. In fact, they love us so much; we're turning down 6,000 clients a year." And when he said that, I went, "Ding, ding, ding. Wait, wait, wait." And he said, "What?" And I said, "This is your lucky day; you need to just go buy a lottery ticket right now." And he goes, "Why?" And I said, "Because you got me, I'm not saying that because I'm arrogant. I'm saying that because I'm experienced. It's not arrogance; that's experience."
And I said, "Because if you would've gotten anybody else, even on my team, they would've put you on the market, and you're not sellable because you would have to work for the new owner. And you've been in business for decades, and anybody that's been in business for decades has a very hard time working for somebody else." And he goes, "Well, what are we going to do?" And I said, "Well, I'm going to my due diligence, but I'm pretty sure I'm going to partner with you."
I did my due diligence, I met with them and ended up investing money, putting up my expertise, resources, and we took them out of their office, out of their house office, into a 6,000 square foot building, hired a bunch of employees, have a COO now, leased equipment and everything else, and then we have a business. Not a job. The same gentleman, and here's why it's such a good story because here's the problem that business owners face, the same gentleman who said, "I don't have the business acumen to grow the company to the next level." This same gentleman and his wife are both brilliant people. They come up with great business ideas and inventions every freaking day, every day. The reason he didn't have the business acumen is that he's stuck, and when you get stuck, it's like your computer.
Michelle: If you have all these programs open, does it run well? No, it shuts down.
Mimi: Yeah, it's distracting, yeah. He was completely distracted with the day today.
Working On or In the Business
Michelle: Yeah. well, there's no way you can do everything. Out of the six Ps, they had no people. They were doing the art, they were doing the graphics, they were doing the printing, they were doing the cutouts, they were doing the install, they were doing customer services, they were doing sells, they were doing collections, they were doing billing, they were doing accounting, they were doing all the whos. Three people doing all the whos in that company. There is no way, no way, that anybody can be a success while doing that, and that's what happens time and time and time again with business owners. So they have no people, but they had a great product and no processes.
They were shoving invoices into draws because they didn't have time to do anything, so they had no processes in place. And they really didn't have anything proprietary, but they had patrons. They had a very diversified clientele base who loves them, and they were very well branded and very well known and very well respected, and then they were making money. They had profits. So they had three out of the six Ps.
The biggest mistake I see business owners make is get stuck in the day to day operations, they're so busy in the day to day that they don't have the time to hire their weaknesses. You got to hire other people. You can't do everything, so you got to have the people in the right place so then you can get the processes. It's hard to have processes when you don't have people.
Mimi: I love that because I just did a survey of my listeners and I asked them what their three top problems were, their obstacles, and one of them that came up was their people, their employees. Because I think people do recognize that they need people, but one, it's hard to hire good people, and two, it's hard to retain good people, right? So do you have any suggestions of like when you're hiring, where you find them? How do you vet them?
Michelle: That's probably the number one reason business owners sell their business, is because of people problems.
Valuing different capabilities
Mimi: They can't deal. I mean it's the worst, honestly.
Michelle: It's the worst. Yeah, it really is the worst, and I'm not an expert at it. I don't claim to be an expert at it. I think most entrepreneurs are probably not good people managers at all, because we're entrepreneurs, we expect everybody be like us.
Mimi: Right. And you're just kind of going, going, going, "Just keep thinking what I'm thinking and just…" Yeah.
Michelle: Yeah. We expect everybody to be like us, like, "What do you mean that you can't do 50 things in a day? I do 100."
Mimi: Yeah, exactly.
"What do you mean you need an hour lunch? I ate at my desk. What do you mean you can't come in at 7:00 AM? I'm here at 5:00 AM." So we can't compare people to us, that's number one.
Number two, recruiting is a difficult thing, so what I do, and I've been in this industry for, like I said, over 20 years, what I have found that works for me might not work for everybody. But I have four colleges around me, I have a waiting list, and because I'm in finance, mergers and acquisitions, everybody wants to work here. All these kids that have finance degrees, getting accounting degrees, they have an MBA, they all want to come here and learn. I always have, at any given time I can have five to 20 interns at one time.
Mimi: When you say interns, does that mean you're paying them or is it short term? What does that mean for you?
Michelle: I have both. I have both programs. So I have like very short, maybe very short non pay, like very, very short. Then paid, and then if you're a good fit and you've been here for a little bit then I'll move you into a paid position. Summer internships, some are holiday internships, some they're not graduating for two to three years, some are about to graduate in three months, looking for a permanent position. So I have them all across the board, but I do have an internship program where if someone's a good fit, then they become a hire.
Assessing job fit
So we do do testing, and we test for everything. So we have analysts, we do analyst testing, receptionist testing, [inaudible 00:28:54] testing, marketing testing. You name it, we have tests for it, aptitude tests, we test someone's intelligence, someone's ability to handle stress, somebody's ability to handle attention to detail. You have to figure out what's the most important thing for each seat in that company.
So like at my business, if you're applying for an analyst, you've got to have extreme attention to detail because if you mess up one number, you just messed up everything. I once had an analyst made a $350,000 mistake on the financials, and thank God I caught it. I'm like, "What are you doing?" So extreme attention to detail and conscientiousness is very important in that position. So you have to look at each position and figure out what's the most important things.
A receptionist, yes, needs to have attention to detail but not to the same level that an analyst has to have. My brokers, sales people don't have attention to detail. Except for me, and I'm rare because I do, I have very great attention for detail, but my brokers? Terrible attention for detail. They're salespeople, I know that, I don't let them touch accounting. I don't let them touch valuations, I don't let them do financials because I know they're salespeople.
So you really have to look at each seat and rate that seat with what's the most important thing, is the most important thing dependability? Punctuality? Loyalty? Is it attention to detail? Is it they've got to be extremely intelligent in this area? You got to really rate that position and then have testing for that particular position.
We do personality testing too, but the one thing that we do that really works for us is everybody goes through a working interview and if you're not an intern you don't just get hired. You work here for a week or two or three weeks, and we'll see if it's a good fit. If it's a good fit for you, if it's a good fit for us, because it has to be a win win. It can't just be a good fit for us and not be a good fit for you. You can't come to work every day and be miserable.
Mimi: Right. No, that makes sense. Now, are those testings that you're talking about, are they your testing or an outside service?
Michelle: They're not my testing, it's an outside service. I've tried a lot of different testing, I kind of like this one. They're not overly priced, it's an annual subscription, it's based upon how many people you're hiring, they're easy to work with, they're customizable. When there's discrepancies in the test, they give you certain questions to ask and really now… If somebody wants to be an analyst and they score a 30 at math, I'm not going to hire them. So most of my analysts have scored anywhere from a 90 to 100 in math, and then same thing with like spatial reasoning.
So it's really an aptitude test that tests math, English, spatial reasoning, personality, attention to detail, conscientiousness, competitiveness, all that stuff, because here's the other thing. I can't have an analyst that stresses out all the time, because we have deadlines, so if you can't handle stress, you can't be an analyst. If you can't handle stress, you can't be a broker.
Creating Company Culture
Mimi: Right. Now you've hired them, what do you do to create a company culture? Especially during COVID? Do you have weekly meetings? Do you-
Michelle: So my graphics company, so here's the other thing as a business owner, you can't hire a general manager and then not inspect what you expect. You can't hire a general manager and then just throw everything on them and trust but not verify. And they made that mistakes of doing that, and then when they had to get rid of this person they realized this person has really, really, really damaged the company culture. Really, really damaged employee moral. Made a lot of mistakes that they weren't even aware of. And I tell them, I said, "You guys could die off the price. I mean yes, you need to delegate, yes, you need to not be in a who, but you still need to inspect the who." And they weren't doing that.
So now they're rebuilding company culture and are doing an amazing job at it, and they're having meetings, they're having department meetings and they're having group meetings, and they do that once a week. Department has now, and are empowering them to make decisions, they're also putting them through leadership courses so they have the tools that they need to be able to lead a departments. And they're really changing that company culture.
Us, my company is a little bit different. I'm very hands off, but I'm very hands on. Meaning that I'm not going to tell you what to do every second, and if you want to go to lunch that's up to you, I don't really care. You know what you need to get done, I'm going to empower you to do the right thing. You need to make your own decisions, but you need to make sure that you meet deadlines, you take care of clients first, and that everything at Seiler Tucker is being handled based upon our vision, our mission and our objective with our clients. Does that makes sense?
Mimi: Mm-hmm (affirmative). Yeah.
Michelle: And so our culture is a little bit different. I mean they don't even take a lunch break. They all bring food in, everybody eats… they all kind of eat at their desk, but they're all talking to each other. It's kind of really good camaraderie, but I'm not telling them what to do. They're deciding what they want to do.
Mimi: Right. Is everyone working back in the office now?
Michelle: Yeah. I actually never stopped working in the office. My philosophy is if I'm paying rent, Downtown New Orleans in a high rise in a corner office, I'm coming. Now, I let them all stay home, I had one team member that came in every day with me, so it was just the two of us and everybody else worked from home. Now all back.
Mimi: Was that hard getting them back? My brother works at a bank and he's like, "I can't get my people back."
Michelle: They all wanted to come back, they love it here. I think my culture has been created out of just letting people make their… empowering people to be part of the team, empowering people to make decisions, empowering people to take ownership of the company really. None of them wanted to work from home. I only had one that wanted to work from home because they live with a mother in law that has cancer.
Advice for Starting a Business
Mimi: [crosstalk 00:34:49] Right, so they were just being cautious. So for anybody who's listening that's thinking of starting a business or just starting out, and they're not obviously in a position of wanting to sell their business yet, is there any advice that you would give them besides the six Ps to make them the success? I mean I found out that only 1% of female CEOs ever reach the $1 million mark in sales.
Michelle: Yeah, and that's a shame.
Mimi: [crosstalk 00:35:14] Michelle: I didn't realize I'm in the 1%.
Mimi: Yes, I mean that's impressive. Good for you. What advice can you give to any of these women listening to get to where you are?
Michelle: Yeah. So here's the thing, you got to plan, and even if you say, "I'm never going to sell." Plan to sell anyway, because if you plan to sell your business, it's like if you plan to sell your house, what do you do? You clean up that house, you make it look great, you stage it, right? You make that house look the best it's ever been, right?
Mimi: Mm-hmm (affirmative).
Plan your exit
Michelle Seiler Tucker: Same thing with a business. The biggest mistake that business owners make is they don't plan their exit. Eight out of 10 businesses will never sell, and the reason eight out of 10 businesses never sell is because a business owner never thinks about selling until they have to, due to an internal or external catastrophic event occurring, like COVID. Now all these restaurants want to sell, guess what? You're not sellable right now.
You're going to have to hold on, unless you want to sell to a turnaround specialist who's going to pay you pennies on the dollar. So the bottom line is plan your exit from the beginning. Just like we all have kids, right? You have five kids, I have one. I don't know how you do it with five, because I can barely manage one.
But you plan for your kids, right? You plan where they're going to go to preschool, where they're going to go to elementary, if you're going to homeschool, if they're going to go to high school, if they're going to go to coed, if they're going to go to all girls, all boys. You plan if they're going to go to college, some of them plan who they're going to get married and how many grandkids they're going to have. But our biggest asset, we never plan.
Women plan for everything in their life, but the exit of their business, and that's their biggest asset. So plan from the beginning. In my book I talk about the STGPS Exit Model. When you want to go somewhere, you take out your phone, you plug in your destination, right? You know where you're going. In business you need to know where you're going. You need to determine your end game.
So if you say, "I want to sell my business for $5 million. I want to sell it just for $5 million." What are you worth today? So the GPS needs to know your destination and it needs to know your current location, where you're starting from. So if you want to sell for $5 million, you should have a valuation. Every year you should have a valuation. Do you know that people get health checkups every year and they get their car checks up, but they never get their businesses checked out? Valuation.
So if you say, "Okay, I'm worth a million right now, in five years I want to sell for five million." So you give yourself five years, so now you know your end game, where you're starting from and your time frame. Now, who's your buyer going to be? There's five different types of buyers, so if you're selling $5 million companies, it's probably not going to be a first time buyer. It's probably going to be a strategic, a competitor or sophisticated, so know what the numbers have to look like.
To sell a business for $5 million, what does your EBITDA have to be? Earnings Before Tax is at… you were an investment banker, Earnings Before Interest, Taxes, Depreciation, Amortization. What does your EBITDA have to be? Does it have to be $1 million? Five times earnings? And then build the business on the six Ps. Women can do this, women are great business owners. We have great attention to detail, we have great intuition, we know how to communicate, we're great communicators. We can do this.
Mimi: Someone had asked me this question, and I, to take it one step further, I want to see what you think about it. Is I don't think women think big enough either.
Michelle: I agree 1,000%. I think women have so much pressure on them and they have to multitask. A lot of successful women are not married or have children. Oprah Winfrey is one, I could probably name a bunch more. Women have so much pressure on them. We have to take care of the children, take care of the home, take care of the hubby, expected to clean, expected to cook, expected to grocery shop, expected to do all of that stuff, and it's so much pressure on women. And plus I agree with you, I don't think women think big enough.
Categorize your activities
What I always tell my clients, and I tell my women friends, "Keep a diary for 30 days. Keep a diary for 30 days, write down everything that you do from brushing your teeth or showering, everything you do, every day. From the minute you get up, from the minute you go to bed and then put them into categories. Your A category, your B category, your C category." Your A category are those things, Mimi, that only you can do because those are your core competencies, you do it better than anybody else and you can't really delegate that. Plus you can't delegate brushing your teeth, so those are your A categories.
But then your B categories are things that you're really good at, but you could delegate. Like evaluations, I'm great at evaluations but I don't do them. They take weeks upon weeks, I delegate that to my analyst team. So those are things you can delegate.
And then those C type tasks are things that you absolutely 1,000% should not do because- Mimi: Right, like cleaning your house.
Like cleaning your house, because they zap your energy and you can't focus on your core competencies. Women need to figure out what they make per hour and if you make… Okay, so if you say, "Look, I make $25 an hour and I make that 40 hours a week. Can I afford, my husband and I afford, to pay somebody $100 a week to clean my house? And if so, what does that free up for me to develop my core competencies?" Am I making sense?
Mimi: Right. Yeah, it's not to go watch TV. It's to then go and make more money.
Michelle: It's not to go watch TV. That's right. You don't get your house cleaned to go watch TV. So you should delegate those things out like grocery shopping, I don't grocery shop. Grocery shop, cleaning your house and all that stuff, now it's easy to delegate grocery shopping because of COVID. You can just order everything online and pick it up, or have it delivered to your house. But women really need to get crystal clear on their As and Bs and Cs, and really start thinking bigger and know their worth and know, "Hey, I'm worth this. I have value."
Mimi: And not be afraid to shoot for something higher, and not just plan on staying in your garage making whatever you're making forever.
Making an impact
Michelle: Right. Life is too short to not do it big. Go big or go home, life is too short. Why not make a huge impact? Why not create a great legacy? The more money you make, the more you can help others. So life is too short not to go big.
Mimi: This is great. So you have your three books, is there anything else if someone wanted to work with you or do… you're just a wealth of knowledge. Is there any other programs that you work with or outside people, do you have classes or anything else that people could reach out to you on your website?
Michelle: If somebody wants to get in this industry, I do have a mergers and acquisitions class that's five days, and it's to become a partner with me in another location. Let's say if somebody's in Dallas, Texas and they want to be a partner, I do have a program for that. I also am finalizing my Build To Sell Online Program, so business owners can learn how to do what we've just been talking about, step by step by step.
Exit Rich Book
Also they can go get the Exit Rich book right now at ExitRichBook.com and the reason I mention that, Mimi, is because we're in presales right now and they can get the book less expensive now, for 24.79 which includes shipping. If they order it today they get the digital download, so they can read it immediately. They get a lifetime membership into Exit Bookclub membership which is me doing all this training. Plus they get all the digital downloads.
So a lot of business owners have never seen an employee handbook or an employee contract or an organizational chart. I tell you, most business owners have never seen a sample purchase agreement, a sample LOI, Letter of Intent, or a sample due diligence checklist, or a sample closing docs. All those documents are there for you to review in your download, and we keep loading more content in there. Plus they get 30 days membership in the Club CEOs, free membership, where I do masterminds, Q&As, they can ask me anything they want to ask me. I answer all their questions. We do masterminds, strategy tips, things of that nature with like minded entrepreneurs. Then when the book comes out in January we ship it to their doorstep.
Mimi: That's great, that's great. This has been amazing. I have learned so much. I could sit here and talk to you all afternoon- Michelle: Thank you. You know so much. But you're doing an amazing thing, so thank you so much for your time. Is there anything else that… any other last tips or anything else that we haven't covered that you would like to have covered?
Michelle: I would like to give out another number, if they want to text Michelle to 888-361-0066, they'll get all my social medias that they can follow me on. Plus they can see my websites and my phone numbers and everything else if they want to reach out to me. The only other thing I would say is never give up. Where there's a will, there's a way, and even during this pandemic there's opportunity and money all around us. I mean there were great… there were more millionaires that came out of the Great Depression than ever before.
There's going to be more millionaires that come out of this pandemic than ever before. There's money all around us. Women are very observant, women just got to take a chance and believe in themselves, and know their worth.
Mimi: And just go for it.
Michelle: And go for it, yeah. And you know what? Become a badass woman.
Mimi: Exactly. This is awesome. Thank you so much, and I really appreciate it.
Michelle: Thank you so much for having me. It's been my absolute pleasure.