In this week's episode, Bill sits down with Adam Koós, president of Libertas Wealth Management and ELEVATE and Exit, to discuss the critical role of long-term planning in business transitions. Many business owners wait too long to prepare for an exit, leading to missed opportunities and financial setbacks. Adam shares his expertise on exit planning, business valuation, and the marketing strategies that drive up multiples in mergers and acquisitions. Whether you're three years or ten years away from selling, this conversation will give you the insights you need to maximize your business's value and ensure a smooth transition.
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Bill: Thanks for joining the Missing Half podcast where we're discovering what's missing in manufacturing and B2B marketing. I have a very special guest, Ohioan, Adam Koós. Adam, welcome to the Missing Half podcast.
Adam: Thanks so much. I'm excited.
Bill: Well, Adam, you are the president of Libertas Wealth Management, if I said that correctly, and Adrenaline Advisor Consulting. I know I said that correctly. But maybe tell us a little bit about your background. And then we're going to jump right into our topic and start discovering what's missing in some mergers and acquisitions and different things with business planning.
Adam: Sure, yeah. We've got Libertas Wealth Management Group, which is a fee-only fiduciary registered investment advising firm, which is just a really, really fancy way of saying it's a financial planning and wealth management firm. So financial planning and investment management. We help business owners with retirement planning, 401ks, exit planning, or as I like to call it, business transition planning. And then we also have another company called Elevate. It's the website's elevateandexit.com. And that's kind of focused 100% exclusively on business transition planning and exit planning. Adrenaline is the financial advisor consulting firm that we run. So I don't think we're going to talk a whole lot about that today, but I think we'll be focused on Libertas and Elevate and business owners. But that's kind of, yeah, that's kind what we do for the last two plus decades, I guess.
Bill: Awesome. Well, congratulations on your success. Congratulations on the recent win by Ohio State. I know that's a big thing for you and an exciting time for those folks in Ohio. Us over here in Pennsylvania, we're still longing for a return to success. But we're not going to get into the whole crazy world of college sports because that's a whole can of worms.
Adam: It's not our, I don't think that's our material, is it? Yeah, I don't know.
Bill: No, no, I'm not an expert on that subject. So we'll move on. But, Adam, one of the things I really wanted to get your perspective on, and I know you have a ton of expertise in this area, is marketing's impact on multiples in mergers and acquisitions. You do a lot of exit planning. You do a lot of business transition planning. And certainly that ties into your other focus, which is wealth management for owners and individuals. But we really want to try and talk about how marketing can impact those multiples. And what you're seeing in the marketplace as you look at guiding some of your clients on their exit strategies.
Adam: Sure. I think, well, I've always been a believer, I shouldn't say always, I learned very early on in my career that you know that you've reached the second stage of business growth when you realize that you're no longer a manufacturing firm that's marketing your manufacturing business, but when you realize you're a marketing firm that just happens to do manufacturing in the case of your niche. So I think that to say, you know, how does it affect the multiple? I mean, I think it affects, it's everything. I mean, marketing is absolutely everything. It's so crucial. And without it, you're dying. And as the saying goes, if you're not growing, you're dying. And that's truly the truth. I mean, you got to be expanding, building relationships. You've got to be diversifying those relationships. That kind of starts to affect the multiple. So I don't want to put the card ahead of the horse here, but there's a lot of factors, I would say, that go into moving the needle in a way that I think most owners don't realize they can.
Bill: Whenever you've had these experiences with owners that you're really working with them on that exit or transition plan, how many of them do you start a conversation with and you might be really having a, hey, you're three to five years away from a good exit, right? Like we can sell this today. It's not going to be very valuable because it's not ready. And we need to get on this transition plan to get you where you need to go. How often do you see that situation occur?
Adam: All the time. All the time, almost like, I've never been asked that question before, but of all the lunches and coffees and happy hours that I have, which is usually the first, the first step, you know, if, if not an intro call on the phone with somebody, if they're not local here, cause we work with people all over the country, it's all they're not, I don't want to say they're never ready at all. I mean, it's not like nobody's done any preparation, but if they've done any preparation for exit, it's by accident. It's not, it's because they've, they're, they're good at other things. They're, you know, Dan Sullivan disciples, let's just say, or something like that.
Bill: Sure. Well, and it seems like, especially in the manufacturing space, we run into a lot of engineers or folks who are very, very interested in things. They optimize things. They, they come up with a better mousetrap, a better, more efficient process. And they're really dialed into those areas of their business, which is super important. And that's what got them there to wherever they are. Well, whenever you see those folks and maybe they've neglected the marketing function, probably neglected some internal organizational structural type of things and accounting practices, but we're going to stay focused on marketing today. What do you see as the most common gaps or if you're starting someone on that two to five year trajectory to exit, what do you see as the biggest things that are missing or most consistent things that are missing in their marketing approach?
Adam: In their marketing approach, I would say that most of them, and it's not just, it's not just manufacturing, of course, but I think manufacturing is, it's up there. Manufacturing is up there. Like you said, you've said it perfectly with, you know, a lot of engineers, a lot of very, very smart people who are very good at what they do. As the E-Myth says, right, you can be the entrepreneur, the manager or the technical worker, and maybe you can be two of them, but you can't be all three. So I think a lot of them maybe overanalyze things. I think that they don't believe that certain marketing can work because it's almost like it's too big picture, it's too theoretical. And then the other thing is, and this is definitely an engineer thing, I think that it's not their fault, it's just the way they've been wired and genetically, think how they're predisposed, but they've got this idea. And it's not just engineers, it's doctors too, it's architects. Their brains are wired in a way that if they try something for a month or two or even a quarter that like, it didn't work, well, it's not gonna work. And that's just not how it, I mean, that's not how it is. You have to try, first of all, two things. You have to go big or just don't do it at all, first of all. And then second of all, you've got to do it. Whatever it is you're doing, you have to try it for at least a year. And within that year, I think that maybe quarterly, but really probably more like every six months, you can look back at your KPIs and make some adjustments and make some changes to here's what's working, here's what's not. Let's shift things over here and make, you know, massage this strategy. But I think that oftentimes it's just, it's a lack of belief. Cause unfortunately, I think unfortunately it's, it's marketing is one of those things that does take some belief. It takes a leap of faith initially. And everybody wants to see results. Like, okay, well, what results am I guaranteed? Well, you're not guaranteed any results, right? I mean, but I wouldn't be in business. I'm talking, if I'm you, I wouldn't be in business, nor would all the other marketing agencies out there and mark people in marketing consultants. I'm sitting down with a consultant yesterday over happy hour and he's extremely successful and all he does is give advice and these people wouldn't be having these massively successful businesses if marketing didn't work, you know, so.
Bill: That's right. Yeah. At some point, I think you're, you're so right in the, the short-term outlook of a lot of these folks. And the, the funny thing is that I find is they had a long-term outlook on building the business they have. They had some faith in some ability to re-engineer a product or to manufacture it in a different way and beat the market. And these are most likely businesses that have been built over a long period of time, maybe decades, right? And then the one thing I find with owners and founders and folks in the C-suite at those companies, they feel like marketing should be the only thing that doesn't abide by the same rules that every other part of their business did. Right? So if they have this plant that does a hundred million dollars and you go and ask them, so where did you start? Oh in my garage. 30 years ago. And then in year five, we moved to this facility. And in year 10, we added on or what, right? It's this long-term discussion. This geological layering of successes and failures that they overcame. But then when we come to marketing, it's like, it's three months. Why hasn't it worked? Why isn't it all better? So it's like we want to live in the quantum world when we're in marketing, like in some alternate universe, but in every other area of the business, we're okay with it taking 30 years. So do you see that occurring in the mindset of these folks?
Adam: I do. I see that happening, not only from the timeframe standpoint, but from the amount, the amount they spend. Another mistake I'll see, and it's a, it's totally misunderstood, is the owner that says, you know what, I've read a book about marketing. I know how this works. You know, I need, I realize I've got to go big, you know, but they, don't know the timeframe side of the equation. So they'll say, you know, I'm that's a little spend a lot, you know, they'll go big, they'll go all in on, you know, let's just say, you know, you've got a top package for marketing on whether it be online, socials, digital, geofencing, retargeting, all this stuff that you know better more than I do about. And you go all in, but again, you're like, wait a minute, I just spent $60,000 in three months. And I I went all in, I went big here and I'm just not seeing the results. Well, here's the deal. You could spend 6,000 and it's still gonna take six to 12 months to see results. But your 60,000 is gonna give you 10 times the results. You just gotta give, you have to have patience. I think, I think, I don't know, maybe, and I'm just, I'm spitballing here. I'm curious what you think. I think that all of us business owners, we go through those trials and tribulations. We have the successes, the big wins, then something happens, whether it's market-related, recession-related, staff related. And we go into this, you know, I don't know, this dark place where we're stressed out, we can't sleep. We're working until two in the morning, not because it's actually productive and gonna help us, but it just makes us feel better. And then, you know, we're sneaking around our spouses trying to figure out what we can sell on eBay to pay the mortgage, because we don't want them to know how bad it is. And then, you know, all of a sudden things, turn around, they get better. But I think over time, every time you go through a cycle of these tough times, I think your patience gets smaller and smaller. You just, you wanna see things work and you wanna move on. And I think that, you know, the end of your career starts to get closer and closer. I'll never forget sitting down. This is years ago. I'll never forget sitting down with some friends of ours, you know, age old friends of ours were sitting around the table, kitchen table, playing cards. And they were asking, you know, know, how old's Karsten, you know, my older son, I'm like, oh, you know, he's, can't remember how old he was. And it's like, long, you know, how long is it to be before he goes to college? I'm like, God, let me think about that. He's gonna be about 12 years, I guess. He'll go to college in 12 years. Pretty crazy. And then an hour goes by, we're still playing cards, and then some different conversation pops up. And they say, how long has it been since, it was like, how long has it been since you've been in college? When did you graduate? I was like, well, 12 years ago. And it hits me in that moment that my son is gonna be gone in the same amount of years since I was in college. And that 12 years felt like three. So I think that as we business owners get older, as we mature in our careers, our business become more successful, time continues to accelerate. And think we get less and less patience as we look at our good times, bad times and everything in between because you feel like you've got less time to make it all happen.
Bill: I agree. And I think like when you just talked about that entrepreneurial journey, right. And there's a lot more conversations online right now with influencers, large and small talking about the entrepreneurial journey. And one of my favorites is Dana White who says, yeah, I talk to people like, yeah, I want to go work for myself because I'm going to set my own hours. I'm going to take off when I want to. I don't want to have to answer to anybody. And then he goes off on a rant about eating the stuff that cows make in the pasture every day and like how hard it is and how you have to skip holidays. And not only is that in the startup phase, but Adam, you and I both know over the course, I mean, I've never had a job in my life. I worked for my dad right out of college and have been in our family business and worked for myself forever. Like, so, you know, as an entrepreneur and a business owner, that that has been all cupcakes and unicorns and rainbows. Everything's been amazing. There's never been stress. It's never been hard to make payroll. It's all good. It's just it's the best. And then the reality, right, is there are times when it's amazing. And there's times when you can take significant dividends or distributions. And then there's times when you're selling something, like you said, to pay the mortgage and the payroll and like you're scrambling. And it's just, it's the grind. It's what it is. And no, I think you're exactly right. I think we get less patient and also then we become more risk averse. And there's...
Adam: Oh yeah, for sure. I think we start taking more calculated risks. not as the most successful among us are the ones that took the biggest risks. And I think as we get older and we go through a couple, I think what happens is you you become profitable, you get more successful, the revenue gets bigger, the profit gets bigger, the expenses get bigger. And then something happens later that you never thought it would ever happen again. And it happens. You're like, Whoa, wait a minute. That's not happening again. And so all of a sudden, you kind of pump the brakes everywhere. You're just like, you know, there's no way I can, I can't be under that kind of stress again. Yeah.
Bill: Yes. Yeah, because I've had, I've been through two exits and this is, you know, I've been on the working on this business now really dedicated for six years. And we've had it since 2003, but it was not really super active. We weren't pumping, you know, we weren't hitting the gas pedal on it for the beginning. It was just kind of there. But for the past six years, I've been really hitting the gas pedal on this business. And yeah, I don't know how many more I have in me. I think I have two, maybe three. But I'm 47 years old. I don't know that at 65, I could start over again and have the energy and the fire and the passion to want to go and do another startup or…
Adam: It'll be different. I think it'll be different. I definitely live by the whole Dan Sullivan philosophy that if you retire, right? And then you're spending all your time in front of Hulu, Netflix, and Amazon Prime, that death is outside your door, just knocking his sickle against the window. So I will be doing something for the rest of my life, probably more like 20 hours a week at most. But I also like, I love when Dan Sullivan says that, I think he says he's gonna live till he's 157 or something like that. And the reason for that is because he wants to see a full millennia. And in order to get there, he has to live that long. And he feels like with advancements in science and healthcare and, you know, staying sharp and doing something with your life, that it's possible, know, staying, eating well, exercising, you know, not being an idiot. So I don't know, I'm sharing the same goal. I'm not gonna live to 157. Thankfully, you know, the millennium will be here before that for me.
Bill: Yes. Well and Adam, I think Gary Vee also says something consistently on social channels where he says, it's never too late. And I think one of the things that the internet and digital marketing and a lot of the personal branding we can do allows someone to start over relatively quickly and pivot. Whereas for our fathers’ generations and generations before us, if you were in the auto industry, you were in the auto industry. If you were in chemical manufacturing or in financial services or whatever, that's kind of who you were and what you did. Whereas now, if you want to start another company tomorrow, yeah, you know what you're getting into, but you can do that. You can pivot. And I take great encouragement in the fact that I think being mid career is not the end. Like it's not all downhill from here and just like a slow burn to death. There's a lot of opportunity to do new things, exciting things. And I think you're right. Hopefully, you know, 60, 70 plus, we're not doing a hundred hour weeks, right?
Adam: Well I think there's something big that people don't know. And it took me a while to learn this. In fact, I didn't think I was going to talk about Adrenaline at all today, but I think this is a really good reason to bring it up. It has to do with marketing. It has to do with second chances. It has to do with rebirth. I started Adrenaline by total accident. I wanted to start Adrenaline. I didn't even know what it was going to call it, but I wanted to start it 15, 20 years. That was going to be my last thing I did until I'm 157. And I was sitting, I was having a phone call with somebody in the industry. He's 59 years old. So again, like it's never too late, Gary Vee, right? 59 years old. He is, he was really, really down. Well, he calls me up and he says, Hey Adam, how's it going? You know, it's typical, you know, by annual phone call, just how's it going, touch a base. I'm like, man, was like, things are going so well. And he goes, really like, really well. I'm like, we're having a record year. Like it's crazy. And he goes, really? Like, what are you doing? And I said, well, I mean, there's no one thing I'm doing. And he goes, all right, fine. What are like the top three things you're doing? And I'm like, look, and he wouldn't mind if I said his name, his name's Leo. And he says, all right, fine. You know, like, well, what are the top three things? And I'm like, Leo, it doesn't work that way. There's not, there are not three things that I'm doing that are making this happen. And that's the, that's what's crazy about marketing. I told him, I said, it's like, it's think you have to think of the marketing plan, like an orchestra. And if, if you have just a horn section or just a violin section, you're not going to have much of a song going on. And by the way, if you have an entire orchestra, but only the xylophone isn't playing, you can have a pretty beautiful song, right? You can have a pretty robust, you know, whatever you would call that. Yeah, I'm not smart enough with music to come up with the, you know, verbiage here, but you know what I'm saying. So he said, okay, he's like, well, and he just sighed in the phone. He just let out this big sigh. And I was like, what was that? And he goes, well, I don't know, man. He's like, I just, he's like, I've been doing this longer than you. He's like, I'm kind of honestly kind of depressed. I'm just sick of it. I'm tired of tired of the business. We're not growing. I just hired my son in law and I've got nothing for him to do because we're not bringing new clients on. And I don't know. He's like, I'm just kind of done. And I'm like, and then I felt terrible, right? Cause I'm sitting here. I feel like I'm bragging on the phone. And I, and I said, well, I'm so, I'm so sorry, man. He says, no, no, no, no, I'm not taking anything away from your success. I'm really excited for you. And he stops for a second and he goes, you know, we've known each other for 14 years. And I remember years ago, you told me that if I ever wanted you to teach me that you'd be willing to tell me everything you do from the second you show up every day to the second you punch out and go home. And I'm curious if you'd be willing to do that. And I, I'm at 7:30 at night, by the way. And I'm thinking of my, wife and kids are in the other room. And I'm thinking, I'm already working 55 hours a week. My wife's going to kill me if I say yes. But I say yes, because I can't say no. Right. And so we, 26, I think it was 27 hours of Zoom meetings and 16 weeks later, I took him through what I call Diet Adrenaline, which was kind of like the framework. And halfway through, he keeps asking me, what can I do for you? What can I do for you? You know, I'm like, nothing, just, you know, your success and moving, it'll be exciting for me. And, and at the end of the day, I'm sitting here and I'm like, you know what, there is something you can do for me. I've already built this thing in Dropbox. Why not start it now instead of letting it sit on a shelf for 15 to 20 years? So help me make this perfect. And so that's not the point of the story. We launched Adrenaline in September, but he grew at 44% last year, had his first record year ever. And the best part of it isn't the money, it's not the growth, it's the reinvigoration. And this is the key. This is what people don't know, whether you work for somebody and you've been an executive for 20 years and you've thought about starting a business, whether you've owned businesses and you're getting burnt out. If you put together a solid marketing plan that makes sense for your business and your audience, you will have the most fun you've ever had in your life, whether it's your current business or a brand new business. And you won't care that you're starting over or feeling like you're starting over because that reinvigoration will make you feel like you can go another two decades, even if you're 60.
Bill: Yeah, there's some sayings out there that are quoted and some of them for ancient proverbs of, you know, slowly dying is hard. Growing is hard. Staying the same is hard. And in business, I would rather be growing and hair on fire with a marketing program that's killing it and having trouble finding staff and having trouble getting all the work done as opposed to we've all been in the troughs, we've all been on the down cycles where we've had to lay people off or we've had to contract. And then that depression sets in, especially, and whether you're an entrepreneur or you're the division manager at some large company or what, you know, a vice president or a president at some company, we all go through those, you know, life cycles emotionally. And I think that's right on. And marketing and sales, if you have that problem solved, a lot of other things just get easier because then you at least have money to show up and address your problems as opposed to...
Adam: I would even take it one step further. I would say that it's not even marketing and sales. I would say it, cause you have all these people that when they, you'll talk to a friend and they'll be looking at resumes online for a new job. And then they'll look at a resume on Indeed or something and they'll say, I don't want to do that. Like you'll say, that looks like a good position for you. like, I don't want to do that. It's sales. Like I don't like sales, right? I would argue that everybody can do sales if you can talk to another human. What you don't like is lead generation. There is a huge difference between lead gen and sales. Lead gen is what you don't like. That's what 5% of the country can do banging out the phone, right? But that's what marketing firms do. They take the place of that phone that's duct taped to your hand. And true story, by the way. And somebody did that to me early in my career. Anyway, but yeah, I think that's where these days, we don't live in that world anymore. We live in a world where you have to pay for help. You have to pay for help. You can't, you can't just do this all yourself. It's not worth your time. It's not worth your hourly rate. You need to do what you're doing that's made your business so successful and let somebody else take care of the stuff that you know, frankly, none of us really understand that well, at least not the depth of it.
Bill: Sure. Well and marketing has become so technical, not only is there strategic efficiencies that can be gained by leveraging professionals, but I'll be honest, I don't really know how to click on all this stuff. I have people for that in different disciplines and we keep finding that we need more people every day because the disciplines get so much more technical, distribution channels. And this goes to a topic we have conversation with a lot of people is a lot of companies have a marketing department of one. You know, so let's say there are 10 million dollar, 100 million dollar, even some 200 million dollar companies and they have one person by job title or role who is the marketing person. Ninety-five percent of their time is running between meetings, reporting to 40 different people, the trade show, the sign, the swag, the all the like day to day things. And then the C-suite gets frustrated because marketing isn't generating leads, because content marketing isn't happening. Their YouTube channel doesn't look like their competitors. Their social media doesn't look like the industry leader. And you know, I think a lot of companies, thankfully, are starting to wise up to the fact that, okay, yeah, you do need a point person, but then they need an army. They need an army underneath them fractionally to get all that stuff done. Do you see that in any of the companies that you've consulted with?
Adam: I do. I'm trying not to laugh because yeah, you're talking and I'm just, I'm thinking of stories, you know, it's like, I'm picturing, um, well, here's, here's the point. I'll start with the point. The point is you can have a marketing person or three, and then it doesn't really matter if you don't have any strategy. You have to have, that's the other piece that you, again, in this new age that we're living in now, uh, post-COVID I'll call it, you have to have strategy as well. Otherwise, you know, you're, you're saying, oh, I want to, you know, I'm looking for someplace warmer and you just start marching south. Well, you you might find a river and you might need a boat. You know what I mean? You can just keep going and you can just keep pounding away and you can keep climbing the ladder, but you might find out when you get to the top of the ladder that you're on the wrong wall, as the saying goes. So you've got to have strategy as well. So yes, a hundred percent. I see it all the time.
Bill: No, it's kind of funny. And I think people are becoming more savvy in understanding that and seeing the role of how to execute and attack the marketing function more efficiently. And I think we're starting to see some more maturity in the market.
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Bill: Whenever you think, Adam, about working on exit planning, maybe let's flip the script a little bit. We've talked about what's missing. Let's talk about success. Let's talk about, okay, it's three to five years ago in a cycle. And you met with that owner at a lunch and learn at a happy hour. However you're having that conversation and you had the hard conversation with them of, Hey, sir, ma'am, you're not ready. This is what the roadmap looks like. And then you saw them embrace marketing. And I'm sure many of them had to embrace different things, but let's go through like the avatars.
Adam: Yeah, generally speaking though, I mean, it is at end of the day, that's that's growth. That's where growth comes from.
Bill: Correct. So you've walked them through that over that three to five year cycle and then the outcome that occurred, not only the outcome of the sale and the realization of their business transition, but also the outcome of who they became and how it helped everybody in their organization and how, because I've seen it as transformational, not only from a multiple standpoint, that private equity folks or whoever the acquirer gets excited about. But from an internal standpoint, could you maybe talk about some examples or ideas and not to name names or whatever, but just to, yeah.
Adam: Yeah. No, of course not. Yeah. No, I think that I, this could probably branch off in a few different ways, but I think just internally company-wise, if we start without the owner, then I think the first thing that happens when you, when you put together a correct, you know, a solid airtight business transition plan, you've, you've got staff that are happier. They know their roles, they, they, have ownership in their positions. When inevitably you have to let them know that, Hey, I'm transitioning here out. Um, they, put, you, you've already prepared in advance before you have that conversation, things like salary retention, retention bonuses, things like that. So they don't feel like they're being, you know, hung out, know, hung out to dry with, you know, with this, you know, random owner that's coming in, that's gonna, you know, maybe change everything and, and maybe they will change some things, but by doing the planning, you're also not just bringing out some whack job from, you know, who knows where to come into your company and, know, get top dollar and not care about the staff or the customers. You're doing it the right way. You're looking at customer concentration. So now instead of having like a top heavy business where, you know, 50% of your profit’s coming from the top, you know, five clients you have, you know, you're diversifying that you're de-risking with continuity. Maybe whether it's the buyer or somebody else, could be somebody else could be internal. You could be, I don't want to get into ESOPs, but like employee stock option plans and selling to the company. There's a lot of tax benefits to do that for the owner, but there's also, if it's the right company and the right culture. It can change the culture. It can make a good culture better, I guess. So you know, having that continuity plan in place so that should heaven forbid the owner get divorced, have a disagreement with a partner, disease, Parkinson's, dementia, you know, things happen, right? Car accidents, anything can happen. Tomorrow's not promised. So I think internally, I think these transition plans not only obviously make the company worth more on an absolute basis, it makes it more efficient, the profits go up. So the absolute number of the needle moves, your intangibles go up because a buyer comes in and goes, man, this thing's ready. Like this thing's ready to buy. But then the staff just feels better. The staff's happier. The owner has more work-life balance. They're not, they're not, I mean, I think that's scary for some owners saying we're trying to get you out of the business because then all of a sudden it's like, well, you know, this is my baby. I want it to rely on me. They wouldn't say that, but they do inside, you know, subconsciously in a filing cabinet back there. They want this thing to need them. So I think that's part of it. And then the other part of it is kind of like what you were mentioning earlier with the owner specifically having nothing to do with the relative, you know, the multiple having nothing to do with the absolute profit, the final sale price, but just knowing what I always call it life after football. We were talking about college football earlier. I mean, it's, you know, the average NFL player since the Super Bowl is coming up here or when this publishes, maybe the Super Bowl will have already passed. The average NFL player I believe is in the NFL for three years, 3.2 years or something like that. Which means that 24, 25 years of age, they're done. But they're not done. They've got maybe 70 years left to live. So business owners spend their entire lives building these babies that they've nurtured and cared for, and then they have to walk away from it. And if you don't plan in advance for what's going to happen when you're done, which might be something else, right? It might be a new business, like we were talking earlier. But if you don't have that plan, that's the reason why 75% of business owners who are surveyed a year later strongly regret selling their companies. Because they did no planning and exactly to the point you just made and nobody talks about that point, which is that there are the, I don't want to call it intangibles from a company standpoint, but the personal side of this, you know the human side.
Bill: Sure. No, and I, so I have a great relationship with someone who's in the M&A field in animal health and like agricultural markets out in the Midwest and large agribusiness companies. And he says probably 50% and that might be in like the percentage doesn't matter. A large percentage of the time he spends with C-suite and owners is on what are they going to do the day after, not just on EBITDA and multiples and owner add backs and like, you know, all the stuff that's part of very, very important to selling and business transitions. But I think what you're talking about in that word of business transitions, it's the day after, because it's not what it was. I remember both of my grandfathers worked in steel mills and when they retired, they were done. Not mentally, but physically, they were whooped. Our generation, that is not necessarily going to be true because I have some clients who are in their 80s, still running their companies. I don't know where they get their energy. The current president and the last president of the United States, do they call them octogenarians or what? I mean, they're in their 80s and the energy like specifically that we're seeing out of this current administration is insane. So we're not done. And that transition is so important, right, that they continue to live. You don't want to have an owner exit and then within a year they pass away because that was their life, right? I mean, so, no, I think that business transition concept is so important and looking at what happens next is really important for these folks. If you had some advice or some takeaways for, so let's say there's a C-suite or an owner or founder who's out there who listens to this and is like, yeah, I'm thinking about the future. In the next three to seven to 10 years, something is going to happen one way or the other. What would just be some top of mind things that you would recommend that they think about? And this doesn't have to be related to marketing. This could just be like good, sound business transition advice or whatever. I just want to open that up and let you talk about that.
Adam: Yeah, would, I would, I'm just, I'm going to say three things because that's what you're supposed to say is three things, right? And then I'm come, and then I'm going to come up with them right now. The first thing you should do is hire a fractional CFO. If you don't have a CFO at your company, cause your company is not big enough. If you're making at least a million dollars in revenue upwards of, what, 50 million or so, mean, obviously when you start hitting 10, 15, 20 million, maybe people have a CFO or a controller on staff, but if you don't have a CFO, find a great top-notch CFO company, hire the fractional CFO and start treating your business like it's your business that you're working on, not you're working for it. Start looking at forecasts, planning your growth strategically. That's number one. And I know it's a cliche, work on your business, not in it, but I don't think most people still understand what that really means. Number two, once you've got that together, now you can forecast and plan your expenses. Now you need to look at a marketing budget in terms of a percentage of total gross revenue. And now you actually have a budget. So all these marketing people you talked to, like, what's your marketing budget? Like, I don't know. Like you need to have one. So that's number two, marketing budget. And you're going to spend that marketing budget on two things. You're going to spend it on the marketing soldiers. That's the people doing the marketing. And then you're going to spend it on a marketing strategist, somebody who's going to teach you and the soldiers what to do, where to march and where to perch up. And that's going to be your marketing plan. And then the third thing you're going to do is you're going to find somebody, and there are not a lot of us, unfortunately, this is the self-serving part, I guess, who is a certified exit planning advisor, the designation CEPA. Um, there is another designation out there that I think is really good. I don't, I'm not really familiar with it, but it's, um, I think it's just headquartered someplace else, but find somebody who's certified in exit planning, which again, I hate that phrase because it, it teaches owners that I don't have to do it until I'm ready to sell. So that's why I hate the phrase exit planning, but it's business transition planning. So find somebody, I don't care if you're selling in three years or 13 years, find somebody who can take you through a plan and then when the plan's done, which will usually take about a year, emergency plans can be put together in four to six months, but you won't like it. You won't like the pace you're moving at. So a year from now, your plan is done. You've got the marketing moving, the CFO is helping out with your forecasts and projections. And ironically, that same CFO is going to implement that plan that we built over the next two years. You're going to find yourself with less risk in your business, more predictability. You're going to have more work-life balance. Your staff’s going to be happier. You're going to grow faster. Your multiples going to go up. You're going to have continuity in place by sell agreements. Things are just going to be better. And then ironically, when you do sell in 3 or 13 years, the compounding effect of what you just did is going to be so exciting, both from a numbers standpoint and intangibly, that, you know, you'll be thanking us for watching this podcast 13 years ago.
Bill: I love that. I mean, that is a great concise three step plan to have a business transition plan. And one of the things so let's let's talk about that. Someone hears this and they're like, yeah, I don't want to do that because I like to do the books or I like to do this or I like to do that. And I think one of the things we as business owners lie to ourselves and I lie to myself about this all the time. The reality is, no, I don't like to do that. It's just a habit. It's just something I feel comfortable doing it my way. And it might not be the right way, but I like to do it. And I think I like to do it. But then if all of sudden you have a professional fractional CFO come in and actually run it right. We had a business a number of years ago and we brought in someone like that to just really help us on the book side. And they did an amazing job. And it was something that we probably could have done if we wanted to. However, you also need that outside person or a second person who is pushing against other areas of the business that you don't feel comfortable doing and it being like a little bit of prophylactic protection against those conversations because it's just like third party. So I can see so much value in what you're saying. Also on the marketing front. Yeah, you need strategy and you need implementation. Don't just go out and spend and like spray and pray. It's not 20 years ago. It's complex. And I love this idea about guidance for that transition. So that also you have some pushback against that CFO, some pushback against that marketing planning. mean, you have those three heads are better than one and everybody's creating enough healthy tension that then we should be able to achieve a tremendous outcome. And I love that framework. I think that's just amazing. Well, Adam, this has been just a fantastic conversation. I think we could go on here for a number of hours and still not even talk about football. You and I are both passionate people. We get excited about talking about this. before you know it, the clock is really long. Adam, I would like to take this opportunity. We are 100% about shameless plugs. I want you to go ahead and we will, whoever's watching this in the details of where this is posted on YouTube on all the socials will be Adam's digits and connections so you can find those. Adam, shameless plug time about your businesses and promote those, please.
Adam: Yeah, I'll just say Libertas Wealth, Libertas Wealth Management Group, the retirement planning wealth management firm. If you're looking for a second opinion on your retirement plan, your portfolio investment management, LibertasWealth.com is where you would go for that. There's plenty of buttons to click to see if we're a good fit. ElevateandExit.com is just a plethora of great information, education, podcasts just like these. Webinar replays, things like that that we're doing throughout the year. So if you're an owner looking for more education on exit planning, business transition planning, head to elevateandexit.com. And then lastly, just because we mentioned it, and I didn't think we would, but if you're a financial advisor and you're looking to solve some of the problems that we've been talking about today with, you know, getting lead generation, growing your business, you know, not selling things on eBay to pay your mortgage, then head over to adrenalineadvisor.com. So adrenalineadvisor.com and again, same thing, there's little buttons to click to see if we're set up an intro call. And then can always find me on LinkedIn, of course.
Bill: Adam, thank you so much. A wealth of information on all three of those areas. Would love at some point to have you back and hear more about this Elevate concept, because I think I'm sure there are nuggets there that would apply to agency owners, that would apply to any business owner, not just in that space. So I think that would be an interesting conversation. But thank you so much for the time today. We really appreciate it. And yeah, it's just been a great conversation.
Adam: Same here, thanks so much, I appreciate you having me on.
Bill: Thank you for joining the Missing Half podcast where we're discovering what's missing in manufacturing and B2B marketing. Like, subscribe, share. Have a great day.