WEBVTT

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how to structure the business in order to sell it and why you should do that independent

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of whether or not you plan on selling it in the future. Welcome to the game where we talk about

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how to get more customers, how to make more customers, how to keep them longer and the many

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failures and lessons we have learned along the way. I hope you enjoy and subscribe.

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In this video I'm going to talk to you about how to structure the business in order to sell it

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and why you should do that independent of whether or not you plan on selling it in the future.

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So, hi, my name is Oxfamose. I have a portfolio of companies that does just under $100 million

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a year in revenue. We own three outright. We have five that we have minority positions in

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and the reason I make this channel is because lots of people are broke and I don't want you to be

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one of them. So, if you have a business right now and you're trying to scale it, you're trying to

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grow it, there's usually one of two outcomes, right? Either this is something that you're

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super passionate about or this is an opportunity that you're passionate about because of the upside

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potential of making lots of money. There's tons of people who are really, you know,

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builds off for companies that are like super passionate about like data management but they're

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really good at it and they think there's an opportunity to make money. It doesn't really matter to

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me, whatever way you do it is fine. But what happens is over the trajectory of the careers of the

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entrepreneur, you know, we develop in scale sets, we level level up, you know, first we're doing,

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they were managing, they were leading, they were casting the vision, any move your way up in the

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company as the company grows underneath of you as you scale, right? The thing is is that at some

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point, you know, I think the entrepreneurial journey is always trying to find the most leverage

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for our skills, like what's the best vehicle for the skills that we have to capitalize on the

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opportunity marketplace, right? And that's the entire market, not just within the context of your

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business. But if you were building the company, at some point, and this is one of the hardest

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transitions that I've had to go through and it took me a very long time to do this, was transitioning

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from CEO to owner and you've heard me talk about this before, but I'm going to say it again because

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I think it's so important. Independent of whether I plan on keeping the businesses or selling the

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businesses, learning how to structure the business so that it could sell someday was one of the most

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valuable things that I've done as an entrepreneur. And I remember when I started out, I was like,

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I'm never going to sell this company, I'm never going to sell this company, like I'm going to keep

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these things for life. And that may or may not be true, but as I've gotten older, I will tell you

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this, I do like having optionality. And by doing, by structuring the company in such a way that I

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could sell it, which I'm going to get to with some of those things are in a second, it actually

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enabled me to have more freedom, which was the ultimate goal of the business. And so the biggest

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hardship that I've probably enforced on myself was starting another business while I had a business,

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which is probably one of the questions I get most frequently for entrepreneurs, was like, well,

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you say I should be focusing on stuff, but you have all these businesses. And the answer is yes,

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and part of that is because I made mistakes and I'm hopefully hoping that you don't have to make

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the same ones that I did coming up, which is I would CEO of one company and then started a second

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company because I wasn't doing anything in my first company or wasn't going to plan on doing

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anything in my second company, I was like, I can be CEO of both. Terrible mistake. And it cost me

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dearly in time and stress and all of the other things that go along with that. But being CEO is a

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full-time role. And so unless you are truly the owner of a company and not the CEO, then that

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company still needs you. And it means it's a not sellable or sellable for much less because it's

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still dependent on you as the owner. And I'm a rice to poo poo this when I was, you know,

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earlier on in starting my career, I was like, when people, I would hear gurus say like, and maybe

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this because I didn't know how to do it. But they were like, you know, a business can't run without

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you. It's not a real business. Well, I don't think it's not a real business. I think that you are

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not an owner if it cannot run without you or you're an owner, but you're also a CEO of the company.

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And so for me, understanding the difference between CEO and owner was really important because

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I didn't even have any examples of that, right? It was only when I started looking at the investor

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world, the wealth world that I understand the difference between those two things. And so as an easy

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example, like if you look at Warren Buffett, he doesn't run C's candy. He owns C's candies,

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right? He doesn't run guyco. He owns guyco. And he doesn't own, you know, Ben Bridger's

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rulers or whatever it is. Like he owns it. He doesn't run it. And so if you think about that within

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the context of, you know, your businesses is like, is there a way that this business could not

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only maintain, but also grow without my involvement whatsoever so that I could function the same way I

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do in the stock market as somebody who's in it who owns equity in this company that it grows

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without me. Now, let me explain how my role works now because I have been able to structure my

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life so that I actually treat all portfolio companies the same. So despite the fact that I have 100

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percent ownership in three of them and I have, you know, minority stakes in the other five,

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I still structure my engagements with them the same way. So I'm still meeting quarterly

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with those those companies and their leadership teams and I have, you know, meetings as needed

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with them throughout. And one of the important pieces is that I am nose in hands out. So you can

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write that one down like NIO and I got that from a mentor of mine. Um, nose in hands out, which means

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that when we have a meeting or we have a, you know, a long talk, we want to talk about something strategic,

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I don't walk away from meeting with with homework. I don't walk away with to do's. All right. And

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that is a purposeful effort by design because if I had to walk away with to do's from all these

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companies that I would, I would never be able to get anything done, right? And so I go into there

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as a strategic advisor. I'm there to offer my experience, but I'm not there to lead the meeting.

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I'm there to bounce ideas off of. Hey guys, real quick, if you're new to the podcast, I have a

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book on Amazon called 100 million dollar offers that over 8,000 five star reviews and it has

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almost a perfect score. You can get it for 99 cents on Kindle. The reason I bring it up is that I

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put over a thousand hours into writing that book and it's my biggest gift for our community. So

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it's my very shameless way of trying to get to you to like me more and ultimately make more

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dollars to that later on in your business career. I can push the partner with you. So that's my

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gift. Go check it out. Amazon and back to the show. And the way to make that transition is that

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you have to build it with that intention. So as I've now built businesses later in my career,

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compared to earlier, my earlier businesses, I built independency on myself because I had those

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interpersonal needs and I also didn't know any better. But hopefully if you're watching this,

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you can know better. And so this is one of the downsides of having a personality-based brand

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compared to a business that's faceless, that's really just a brand in and of itself that's outside

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of the entrepreneur or owner who started it, right? These candies is not about more and above it.

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Geico is not about more and above. They have a gecko, right? And that's the mascot. And so as I've

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transitioned through this, I can tell you that now finally, I would say I'm in a position where I

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actually am an owner and it's awesome. It's great. These companies pump out cash flow and I can

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allocate that cash flow accordingly and buy percentage of other companies and you can real estate

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all these other things. But it comes from literally being able to do that, which means that I either

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have to bring someone up to operate SEO. So right now your business does not have you CEO and you say

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that you are passive in it, I would probably challenge you on that and say that's not true.

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Right? The company has to be able to grow and innovate without you. If it can do that,

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then it passes my test of ownership. Right? And so I like to have a certain amount of involvement,

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which I just said, like quarterly and you know touch points and things like that. But beyond those

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things, the business must be able to operate and grow on its own. And a test that I have is that

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in a six month period after I leave and I put someone else in charge, does the company grow during

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that period of time not only maintain but grow in both toppling and profit unless there was,

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you know, some reason they wanted to make some sort of capital investment or whatever. But for the

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most part, you know, you can use your own competence there. But that is my litmus test is six months.

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So if I put someone new in and I give them six months, does the company grow without my involvement

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switching to this communication cadence? And I think one of the hardest and most significant

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things that you can do to really remove yourself from that is if you have any sort of central

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communication for the company. So if you have Slack or a son or some place that you that you are,

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you know, integrally involved, you see everything. If you can remove yourself from that. If you can

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get off of the company slack, if you can get off of the company, a son, so that no one can have

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contact with you and you can start a separate communication center, which is what we have done

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with our portfolio company. So we just have one slack that has all of the executives from each of

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those portfolio company. So they are the only ones who have direct access to us and their teams

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have access to them directly. And that is how we can have far more leverage with the skill sets

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that we have given the opportunities to marketplace. And so the important point here that I want to

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make is that independent of whether you plan on selling or you plan on keeping your company,

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structuring your company so that you can sell it will ultimately give you the freedom that you want.

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And this was something that I did not do early on in my career and it's taken me years. I mean,

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now over a decade to get to this point and I can tell you, I don't think I'll ever build another

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company again the way I used to. And I think part of that comes with skill sets, part of that comes

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with beliefs, part of that is character traits that you develop over time, but hopefully we can

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fast track that which is why I'm making these videos for you. So I hope you feel that valuable,

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hit subscribe if it was for you. I'm trying to help entrepreneurs who are trying to scale their

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companies and just kind of show you the lessons that I've learned along the way. The key point is

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ownership is the goal, not CEO ship. And if we can act as owners, I think we make better long-term

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decisions. You are far less stressed about the short-term nuances in the business because you have

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a much more long-term outlook. And ultimately, I think it actually better serves the business in

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the long run in terms of the value that it creates for its customers. So and honestly, the value that

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the business creates for you in your life, which I think most of us wanted freedom. And it takes

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a long time to get here. So, anyways, hope that was bad before you leave a comment if you like

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stuff like this. And if you have other questions around these topics that stuff I love talking

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about, and I just want to make stuff that you find, you know, that's useful for you. So,

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anyways, lots of love and I'll see you next video. Bye!