The Creator Adventure audio
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Welcome back to the root of all success. I am your host, the real Jason Duncan. And today we have a special episode that we're dropping that is a recording that where I was a guest on another show.
And we do this every once in a while because sometimes when I'm a guest on the show, there's perspective and angles that we don't get to share regularly on the show. You don't get to hear from me as, as an expert on exiting and as an expert on business. So I want you to listen to this today.
This is from the creator's adventure. The host is Brian McAnulty and I was on his show twice and he did a great job of digging in and asking some great questions. He titled this episode on his show, build a vacation proof business and ditch the 80 hour work week and go check out the creator's adventure podcast with Brian.
It's a great show. He's a very good interviewer and I think you'll see that as you listen to the show today. So this was recorded originally on August 13th, 2024 I hope you enjoy.
Hey Jason, welcome to the show. Thank you Brian. Glad to be here, man.
Yeah. So I'm glad to have you back. Uh, we talked a little over a year ago, uh, last time.
And uh, I'd like to bring you back on here and kind of catch up and talk about what you've been up to recently. I think what you just shared with me is kind of surprising. So you've got this kind of a branding of exit without exiting and it's on your shirt right now for those watching.
And you told me your coach told you to not use that and to kind of change things around. So what happened there and where are you at now? Uh, versus when we spoke a year ago? Well, I'd like to, to get, give context for the listeners to give a little bit of like where this came from because when I, when I learned that I needed to exit my business, my first inclination was I wanted to sell the business. I, I was kind of tired of it.
Um, it was doing really well. I, it wasn't my passion. I wanted to go do something different.
And I learned that I couldn't exit because I couldn't sell the business in other words, because I, I was the center of the business. And uh, ultimately over the next 18 months or so, I figured out how to do what I now refer to as exit without exiting, where I was no longer required for daily operations. Yet the business continued to operate without me.
So when I did that, people ask me now, I didn't name it exit that exit. But when people did that, they said, well, you exited your business. I'm like, yeah, kind of.
So you sold it. No, I didn't sell it. And this, but you exit.
Yeah. Like I, and then I would say, yeah, I exit without exiting, exited with, I don't know how I said it, but I said that. And it was, it like clicked.
I was like, Oh, that's, that's an interesting take. And so more people started to be interesting. And then I hired a, uh, team out of New York to help me with some messaging and to do some video work and stuff.
And they said that, yeah, this is your, this is your thing. That is your message. That's the message that you should cling to.
So for the last four years, that's what I've been doing. I mean, I wrote, I wrote a book titled exit without exiting. That's what I, that's what I lean.
I lean deeply into it. Well, like a lot of coaches, um, you know, you try a B test things like ads and social content, what's working, what attracts, what attracts people to the message. And I, I, to be honest, I haven't had a ton of success in attracting flocks and flocks of people.
I'm doing okay, but it's not as much as I'd want. So I've, I've had a mental block on it. Like I, I, I embraced it, but I had a mental block against it.
And like you said, I hired a, I hired a coach and I went and met with him for the first time. I talked to him on zoom a couple of times and I sat down with him and I brought him a copy of my book as a gift and gave it to him. And he goes, yeah, we're going to have to change this.
I said, what do you mean? He goes, that doesn't mean anything to anybody. Nobody knows what that means. And he was, it was really, but, but I didn't disagree with him because I was having issues mentally with it too.
So I didn't meet with him again for about six weeks. And man, that six weeks was pretty hell. I, I guess hellish because I was, I, I even went back to my team and said, all right, we're removing all references to exit without exiting, but we're not changing what we do.
And that was the issue. It was like, I, he didn't want me to change what I did. He just like that message is not a good lead.
So anyway, that, that's where it's, that's, that's what happened with the coach. Well, then I went to this mastermind group of all coaches led by a guy who runs probably the largest mastermind, if not in the world, it's certainly in the United States. Very, very sharp guy lives here in Nashville.
And, uh, and I presented that issue to everybody. I was like, Hey, this, this just happened. I'm like, I'm, I don't know.
And they were all like, no, this is the best. Like, I wished I had a message that was this unique. And so I was like, Oh, and so then I live for a few more weeks, man.
It's like, I don't know what the hell to think. I don't know what's going on. I don't know what to believe.
But, but ultimately I went back to what I believe to be right. It's like, this message resonates. Entrepreneurs do want to exit without exiting.
Not all of them, but many, many do. So anyway, that's, that's what I've been dealing with over the last few months. Yeah.
I think it's so interesting because I think there's a lot of ways that entrepreneurs and creators struggle with their messaging in similar ways. And I know like in terms of like course creators or people selling memberships, commonly like we'll tell them like, take out the buzzwords, make it super clear. Like this is the result that you're going to provide somebody.
And because we tell them like they don't understand the way that you're talking or where you're thinking about it, they may eventually, but right now they just want some results. So it's gotta be clear however they would understand it. But I think there is potential for like a dilemma like this because I think in your case, like for some, it may not resonate with them, but maybe for your ideal customers it does.
And so it's kind of a challenging to, to really figure that out when you have this like conflicting guidance from people. But I'm glad you stuck with it. And it makes sense to me.
And like, I can see that there's a lot of people out there. Like I know my dad had a small business that he eventually sold. And I know like there's a lot of people who think about, okay, well it's, it's a very small business.
How, how am I going to sell this? What would that even look like? And I guess in some ways what my dad did was kind of similar because he sold it, but he's involved on like a, in a consulting basis still to kind of help out the new owners and everything. And so you actually told me also before we started recording here that you kind of found a new market recently of like baby boomers. And so can you share some more about that and how you kind of built that into an offer? Yeah.
What's it, what's interesting about that is that I was, I hired a marketing team last summer and to, to, you know, outsource marketing team to really help me develop an offer and, and do ads. I've never really successfully done ads. I'd had a couple other marketing teams try to do it and they failed miserably to the extent that I got my money back and had to fight to get my money back cause it was, it was pretty bad.
But, but this team really had ideas to get out, get this message out, but they didn't succeed. Unfortunately they didn't succeed. But what they did succeed in accidentally is attracting tons of baby boomers.
And we, we ran ads for, I forget how many months. It was several months we ran ads and we got 400 some odd people that were interested in, in our offer. And then 200 and some odd people booked calls to talk to us about my core offer, which is a mastermind called the Exeter club, which is designed to help get their entrepreneurs, their freedom back.
That's what it is. Now it will also ultimately make a business more sellable, exitable and profitable and, and we'll sell for higher multiple, but that's not its core offer. But that was my offer.
So they were in this ad that was attracting people who wanted to sell right now. And so the offer and, and the ad, you know, my service and ad didn't really meet in the middle, but it was one of these moments like, wait a second, if that many people are attracted to that, then what can I do to service those people? Because I have exited businesses, I've sold businesses, I've failed in business. I've seen it go, but I've had businesses that I couldn't sell and had to close up.
I've had one major one that's still, you know, I got some issues going with it. Like I've, I've been on the good and the bad side of these exits. So why can't I help them do the same thing without tweaking everything about what it is that I do as a coach? So we've ended up developing an offer called ready, set, sell.
It's a complete guide for getting your business ready to sell in 90 days at a maximum profit. Now it won't sell in 90. I don't want to be very clear.
It's preparing it to go to market in 90 days. And so we've developed that and we're about ready to launch it. I don't know when this podcast releases, but you know, sometime before the end of this year, uh, probably in the next six to eight weeks we'll have, uh, we'll have that, that offer that product ready to go.
And it dovetails really nicely into my mastermind. As a matter of fact, it includes a limited membership in the mastermind. So yeah, these baby boomers we found out there is there's 10,000 of these folks retiring every single day.
Many of them own businesses. Um, a lot of those businesses will just die with a baby boomer or they would just close them down. They'll try to give them their kids.
The kids might not want them. And then 90% of them that list for sale won't sell and they just go away. So there's a huge opportunity here in the marketplace for me to make money as a coach, but more importantly, to help legacies continue because these people are going to lose their legacy if they just let their business die.
Yeah. Yeah. I think it's, it's really interesting to discover these new segments of potential customers like that.
And I feel bad when an entrepreneur is talking to me about like how they're struggling to figure out where their customers are and like a good channel to reach them. And I think it's really important to not give up just trying these different things because suddenly like you realize there's this other part of the market of something that you didn't even originally think of. Right.
Yeah. I believe that's part of the iteration process of any business. You know, you innovate, you iterate, you, you change.
But here's, here's one thing that I think is a good teaching point for everybody. And it's something that one of my mentors taught me and it's, uh, there's a universal law called the law of separation and the law of separation teaches us that we have to separate our vision from our strategy, our vision from our strategy. They have to be separate.
And so our vision, what we are trying to accomplish as an owner, as a business owner, as a, as an entrepreneur, as a founders, that vision should remain constant and unchanging. But the strategies that we're going to use to accomplish that vision are going to change many, many times as many as six or seven times on the minimum. Like that's what's going to happen.
And eventually it'll click and it'll start working. So for me, that's, that's what I'm going through right now. I'm four years deep into officially having a coaching business, although I've been coaching for much longer than that.
But I've had to, I've had to iterate and iterate and iterate those strategies. But the vision, and that's what I think, that's what I think my bit, that business coach I was talking about through me for a loop, because essentially he was saying the vision was changing and he didn't say that. And I don't even know that he meant that, but that's the way I think I was internally processing is like, no, this, this is wrong.
This breaks a universal law. I can't change the vision. My vision is to help entrepreneurs get their freedom back.
That could be through selling or exit without exiting. But either way, I don't want to change the vision. I just need to change the strategy.
So I've had to change it a bunch. Yeah. Well, in a way it's almost as if the coach made you question, is the vision actually a strategy? And then you realize, no, well, this, this is the vision.
It has to stay that way because if it's not them, then what are we doing? And yeah, I think it's, it's really helpful to share everything that you just said, because I'm sure there's people who have listened to our episode a year ago and said, wow, okay, Jason's really got to figure it out. I hope I can get to this point in my coaching business and then see you now and realize, oh, like even if you, you've got this book, you've got all this stuff that you've done, there's still always room to learn and be figuring new things out. Yeah.
Well, any, if you, if you cease, embracing education and cease learning new things, I mean you're going to cease your effectiveness. You're going to see your utility. So you've got to continue.
You've got to continue to iterate and learn and change those strategies. And you know, I've changed strategies on my podcast. I'm sure you've done the same thing.
And there's been ways that I've done it. And I just made a huge change recently to the way I'm let's take a quick break to thank our amazing sponsors for making this podcast possible. I finally got it.
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I'm doing the podcast just in terms of structure. And so you always have to change the strategy, but your vision should remain unchanging. So if you're a shiny object syndrome person and you're just chasing the next big new thing, that's just switching vision, vision, you're changing your vision and you're going to, you're going to miss the fruit of the labor.
I mean, there's a, the story told in thinking grow rich about the guy that was trying to go find gold and he, he finally stopped. He just couldn't do it anymore. Sold all his equipment for scrap.
And then the next person came out and said, you know, I think there he's, he was probably onto something and they had to shift the strategy just a little bit in the direction they were going and found one of the biggest gold veins at that time that had ever been found. The guy stopped three free, three feet from gold because he gave up on his vision. So you can't give up on your vision.
Yeah. Yeah. I think that's, that's going to be really helpful for some people to hear.
So you have this XOS method that, uh, it's a key part of it is kind of helping entrepreneurs increase their business value and achieve more freedom. Can you go into in more detail, like what that is and how that builds on the principles you've shared with us before? Yeah. So when I started, um, when I wrote the book exit without exiting, it was really just based on principles and kind of pillars of things that I understood.
And it wasn't as much a methodology as it was mindset and understanding, Hey, these are some things you need to do in terms of how what you have to embrace like delegation and systems and that type of thing. So in October of, I guess it was last October. So not quite a year ago, I was on vacation.
Uh, it was a whole family. We haven't done a family vacation like that in a long time. And we were at the beach and, um, I'm not much of a beach person.
My wife is, and it was over her birthday. So that's where we went. Um, she and my kids were down at the beach and I'm sitting in the, uh, in the condo.
And, um, I just pulled the laptop out and I thought, well, I'm just, I'm just gonna, I'm going to use chat GPT and I'm going to just start thinking and strategy. Like, can I come up with something new? I wasn't really working as much as I was just piddling. And as I was going through this process, it occurred to me that like we don't have exit without exiting doesn't have a methodology.
It's a concept and it is an action. Uh, it describes something that has happened, but it isn't a methodology. So I thought, okay, well, we need to create a methodology for this.
And, um, you know, EOS is pretty popular. It's been around a long time. Um, I'm sure you may have heard of it.
If you're not familiar with the entrepreneurial operating system that came at the book, uh, traction by Gina Wickman years ago. And I think I might have, yeah, this book right here. I haven't read it yet, but a traction by Gina Wickman, but it's a, you know, it's a, it's a, they have entrepreneurial operating system and they have coaches all over the world that come in and teach companies how to run their businesses according to the, according to that idea of operating system.
And I thought, well, mine's an operating system, but it's not about running the business better specifically. That's EOS his job. I'm not competing with him.
Mine is about how do you prepare it to get ready so that you can step away and perhaps even sell the business at some point in the future. So I thought, well, that's the, the Exeter operating system, but I can't name an EOS cause something EOS already already starts. Well, Exeter, I mean, you're saying the word at the letter X when you say it.
So I said, well, XOS, that's what we'll call it. So we develop, that's how it came to be. And then I took it back to my team and I said, okay, we've got to come up with a methodology around this based on everything I've been teaching.
How do we do this in a way that's systematic? And then, so we came up with the seven stages of the XOS method. Um, and then as we backed that up, we talked to, we, we developed this cool thing called the three tiers of the entrepreneurial evolution, tier one, tier two, tier three. And it really started to coalesce and it's really cool.
So the next book I write will likely be a deep dive into the methodology. So there still will be stories about people who've moved from tier one to tier two to tier three, which is what exit without exiting is about, even though I didn't use that terminology. Um, but the next book will be fully embracing the XOS method.
And just one side note before I finished this part of the conversation is that I host three live events for my mastermind every year here in Nashville. And we just had one a few weeks ago and I invited an EOS implementer to come and speak. So we had an EOS meets XOS day.
Um, and it was great. We just went through deeply into traction and the US methodology as well as XOS and people loved it. There's like, Hey, these, these work perfectly together.
So if anybody's out there, you're an EOS person, you might also want to take a look at XOS. Yeah. So can you get into what those tiers are? Because I imagine that many people listening to this, they're typically solo entrepreneurs.
Maybe they've got a couple of people working with them. Maybe they've got like a virtual assistant, but they probably can't really step away from their business and like significantly take off. Like it's not going to run without them in it.
So there are three tiers to the entrepreneurial evolution. Tier one is what we refer to as the owner operator. And this is the person who's running the business, owning the business, operating the business.
And their main goal is to create revenue. Like that's all they do. It's like, what can we do to bring in revenue? And I know that as a coach, that's what I was for a long time in this cut in my, in my coaching business.
I was that when I ran all my other businesses, especially my landscaping business. I was the owner operator for a long time before I hired people to go out and actually do the work. But owner operators make up probably 90% of the entrepreneurial, the evolution of entrepreneurs.
I think most people never graduate out of tier one. And I will give a, I will give a pass to a lot of those people because that's really all they care about. They're not interested.
They're, they're really W2 type employees, but they decided that they wanted to do something on their own and that's fine. And so I don't want to crap on them. If you want to be an owner operator for the rest of your life, that's fine.
But don't come complaining about the fact that you have to work 70, 80 hours a week. There is a way out of that. But if you like what you're doing, you like your customers and you're like, and you want to be an owner operator, that's fine.
But be very careful because you're putting your employees at risk because if you get hit by a bus on the way home tonight, your employees are out of a job tomorrow. So that's not very good. So owner operators, that's an owner operator.
That's tier one. Tier two is the owner manager. The owner manager is the person who has now focused more on systems than he is on daily activity, but he's still managing activity of other people.
And that owner manager probably makes up five to 7% of the entrepreneurs in the world. They've learned to hire people, put systems in place, but they're still required to be there. They still have to check in.
I was talking to a guy yesterday. He has a $23 million company and it's doing really well. Bottom line's phenomenal.
You know, gross margins, great net margins, great, but he still has to be there. Now he's not, he's not doing the work, but he still has to be there to make sure that the work gets done now that he's still an owner manager. He hasn't, he hasn't ascended to tier three yet.
So tier three, tier three is the owner investor. This is when you're focused on asset, not activity. You're focused on the business as an asset.
You're focused on the fact that this business can provide you money. It could provide a lifestyle, not only just you, but all your employees, all your team members and that business becomes an asset that now as part of your portfolio. Now you can go and own, you can buy others, you can invest in other businesses, but you are not required for daily operations, not in management and certainly not in a daily operations.
Your main job is to continue to keep the people on the right path to the vision that you set. That's an owner investor and less than 2% of people get there. And that's what the Exeter club is designed to do.
That's what the XOS method is designed to do is to get people to tier three as soon as possible. So maybe this is getting a little bit ahead of where some people are if they're not even thinking about exiting or exit without exiting their business. But I've heard so many cases of where there's this business and the founder and then the founder sells it to some other company and they, they get a good, good return on it.
Maybe some of the employees can get something from that too, but then the company kind of just eventually kind of disappears and it doesn't continue growing and, and doing what it was when the founder was there. And so how can somebody kind of prepare the right things in order to get to that tier three without like losing, I guess like the vision and the company kind of just falling apart over time? Well, um, so if that scenario is a reality that you just described, so I sell my business and the new owner comes in and runs it to the ground. So there's a few things that are wrong with that scenario.
The probably what's mostly wrong with that scenario is that the company was not built to optimize the exit for the owner of the founder and therefore he or she sold it for way below what it could have been to an unqualified buyer who then crapped the bed and the business shut down. Like that's, that's probably a most likely scenario. Now, a lot of times what we see, and this sounds like what maybe what your dad went through is that the business is sold, but in order for the founder to continue to earn the sales price, he has to continue to work in the business through what's called an earn out.
And those are terrible in most cases. I actually write about that in my book, exit without exiting. One of the characters, uh, Ed, Edward goes through an earn out and it's, it didn't, didn't work really well for him.
I've got a client that I've been working with now for two and a half years. He went through an eight figure earn out is significant, but it's like, it's just a nightmare what he's had to go through and watch what's happened to his company. So how do we prevent it? How do we prevent that? Well, we prevent that by making sure that our company can operate without us.
You know, companies that, that rely upon the founder, the owner to operate are worth 30 to 50% less to begin with. So we got to get ourselves out of there so that we can maximize the profitability upon the sale and the likelihood that the business will continue once we step away. Yeah.
And I think maybe what's happening in a lot of those cases, maybe you know better than me, but I would guess is the company that acquires this company thinks, okay, well, they don't have their processes kind of super well-defined. We're just going to apply the thing that we do. And they lose some of what that founder's original vision was.
But if that founder was able to put those processes in like a clearly communicated way that it could be transitioned, then the new organization would not only value them higher and acquire them for more, but would maybe be able to be more successful in the long run. Does that sound right? Yeah. I think, I think all of us have experienced a version of that with our favorite local, whatever, local restaurant, local bistro, local coffee shop, local clothes, clothing shop.
You know, we went there and it was fine. Everything's good. And then they sell or it's new management or something.
And then it's just, it's not the same anymore. And we're like, I don't like this. Well, that imagine what the employees feel like.
And if you, as the casual customer who's coming in there voluntarily, like the employees are going to feel that way too. So I think it's important. I think it's a matter of stewardship of your business to make sure that, you know, the business doesn't rely upon you, that the business is an asset that builds itself.
And so in some respects, now your job as the founder of the business is to set the vision, communicate the vision and build the asset. That's your job. But you can't, you can't be involved in the daily operations continually and expect us to be a viable long-term business.
Cause the, the guy I was talking to, I told you I was talking to yesterday, you know, with the 20 plus million dollar business, you know, he gets hit by the proverbial bus. Like he even said, cause I asked him, I said, what happens? He goes, well, it'll probably limp along for a while and then it'll be a fire sale to one of my competitors. Okay.
Well, what, what happens to the employees? What happens to the family that's left behind? I mean, these are serious considerations. So if you could invest in a coach or a program or some sort of consulting that helped you prepare for that inevitability, that is pennies compared to what you're getting in the long run. I'm working with a new marketing team right now and I don't have the numbers in front of me.
I should, I didn't know we were going to get into this, but, but they made me go through and do the calculations of what my offer costs versus the return and the percent. And I was astounded because if I'm taking the company or I'm in a customer, a client of mine through a year long process to show them how to do this and we value their business at the beginning of the process and at the end of the process, you know, I'm, I'm essentially guaranteeing a 30% increase in value. Well, if I'm working with a $5 million business, that's a one and a half million dollar increase in valuation, which is an increase to their bottom line.
Well, if it only costs 25 grand to be a part of the program for a year, what's 25 grand to a million and a half dollars in value. Like I don't even know without doing the calculation, but it's a lot. So why would you not spend the 25 and I know that sounds self-serving cause that's, that's my offer.
But think about it. Like if you can get that type of return to prepare your business for a much more lucrative sale and to protect it in the event that something bad happens, spend the money, spend a year's worth of your salary, spend, spend a couple hundred grand, learn how to fix it because it'll be worth it in the long run. Yeah.
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