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Oct. 6, 2020

George Sandmann On How To Grow Your Business And Increase Enterprise Value (#25)

George Sandmann On How To Grow Your Business And Increase Enterprise Value (#25)

"We lose sight of the fact that we start companies to convert our sweat and treasure into valuable equity. One day we will sell to someone, so that we can fund our family's wealth goals." -  George Sandmann

George is the CEO CoreValue Advisor Software. An attorney by training, George is an entrepreneur with almost 30 years experience starting and growing companies. George joined CoreValue Software in 2013, and in 2017 founded his current company, creating a complete business consulting system based on the CoreValue Software. 

In addition to his work with CoreValue, George co-founded the Association for Enterprise Growth, served as Interim Executive Director of the International Growth & Exit Planning Association, and is co-authoring the 'Growth Consulting' curriculum for the Consultants' Training Institute.

In 2020 George developed the '3 Dimensions of Business Growth' methodology, making private company growth and equity value actionable.  

SHOW NOTES

  • George's background and adventures in business
  • How to create a company that is stable and easy to run
  • Why your goal needs to be predictable revenue, profits, and cash flow
  • The three dimensions of business growth
  • How CoreValue was created and its mission
  • Why over 25,000 companies use CoreValue
  • The power of creating an operating manual for your business
  • Why every business owner must identify the niche the business operates in
  • How CoreValue takes the SWOT approach to your business to create actionable items
  • Why you must think of your business from your future buyer's perspective
  • Aligning your enterprise value with your lifestyle financial requirements
  • The power of knowing where you need to be today so you can get there tomorrow
  • Why 80% of business valuators rely on CoreValue
  • Case studies of business owners who leverage CoreValue to create lucrative liquidity events
  • Three things every business must do to welcome success
  • Why sales and marketing is the number one contributor to value gap
  • The change in tides in the marketplace of companies realizing their employees need to be in the office and not at home
  • How most business owners are one person away from catastrophe and what to do about it
  • Stepping back and analyzing what tasks in your business are irrelevant
  • The power of writing crisp job descriptions across your entire business
  • Why every business owner must look forward and not back
  • How companies that use CoreValue increase gross revenues 21.63%
  • The importance of goals in both your personal life and business

This podcast is brought to you by Deep Wealth. 

Are you thinking about a liquidity event? You have once chance to get it right and you better make it count. 

Enterprise value is created from preparation, and not the event itself. Learn how the Deep Wealth Experience helps you maximize enterprise value. 

Master the same strategies our founders used to increase company value 10X with a 9-figure exit. Click here to book your free exploratory call.

Enjoy the interview!

SELECTED LINKS FOR THIS EPISODE

CoreValue website

George Sandmann on LinkedIn

Traction by Gino Wickman

Scaling Up by Verne Harnish

The Deep Wealth Experience

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Deep Wealth LINKS FOR THIS EPISODE

The Deep Wealth Experience

FREE Deep Wealth eBook on Why You Suck At Selling Your Business And What You Can Do About It (Today)

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Enjoy the interview!

Transcript

Steve Wells: [00:00:00] This is Steve Wells. 

Jeffrey Feldberg: [00:00:01] And I'm Jeffrey Feldberg. Welcome to The Sell My Business Podcast. 

Steve Wells: [00:00:06] This podcast is brought to you by Deep Wealth. Are you a business owner who is wondering how to either grow your business, sell it, or both?

Or maybe in today's environment, you're wondering how to make your business pandemic proof. Visit deepwealth.com to find out how you can master the strategies to grow and extract the deep wealth from your business. Visit www.deepwealth.com. 

Jeffrey Feldberg: [00:00:26] Welcome to episode 25 of the Sell My Business Podcast. George Sandmann is the CEO of CoreValue Advisor Software. An attorney by training, George is an entrepreneur with almost 30 years’ experience starting and growing companies. George joined CoreValue Software in 2013 and in 2017 founded his current company creating a complete business consulting system based on the CoreValue Software. In addition to his work with CoreValue, George co-founded the Association for Enterprise Growth, served as interim executive director of the International Growth and Exit Planning Association and is co-authoring the "Growth Consulting Curriculum for the Consultants" Training Institute.  

In 2020 George developed the "3 Dimensions of Business Growth" methodology, making private company growth and equity value actionable.  

George welcome to the Sell My Business Podcast. We're delighted to have you with us. We've had a number of conversations offline, and you have a fascinating story. 

Why don't we start there? Tell our community if you could. Your background and how you eventually got to where you got to at Core Value Advisor Software.

What's the story behind the story?  

Thank you, Jeffrey. Thanks a lot for this opportunity. Same, to you Stephen. I'll give you a high-level view of how we ended up where we are today.  I'm an environmental attorney by training of wildlife and habitat conservation.

I ended up in the mid-nineties doing a startup company, in the telecommunications space. And one thing led to another, we built that company. There was a tech crash on the stock market. Our largest financial partners saw their stock go from 40 bucks to eight and stay there.

George Sandmann: [00:02:14] They ended up backing out of the investment. I was hired by the CEO of a company down in Texas to take the business model that we were working on in that first company and really take it to market. We ended up building a very successful company. We built a bundled network company that we sold to Tanberg on concept. we did an earnout. The Tanberg company ultimately sold to a Cisco and, and the rest there is history which sent me out, looking for my next opportunity, which was up in Philadelphia with a company called V Span.

A really interesting company that was in the video conferencing services space again. That was right at the point when, telecommunications were moving from copper into IP and having to change business models from a very rich, by the minute, revenue model into an open pipe model where you had to generate revenue. based on services and you had to drive serious valuing. So, where we were driving value with the company down in Texas, I took those lessons and apply them into this additional video conference space. I became very good friends with the CEO and, and ultimately that's a funny story and I think that's a company that, that is actually mentioned in Lencioni's book the Advantage. It's used as a cautionary tale, because we were very successful. We acquired, two of our largest competitors and rather than let their senior managers go, and we're going to talk about senior management here in a couple of minutes, rather than let the senior managers go, we kept them all on board.

And I sat down with the CEO and I said again, you have 14 guys managing, this company that is at least twice too many. And you need to get rid of half of this, so you can draw a line through every other name, draw them out of a hat, fire that people based on merit, but you got to let people go.

We can't keep its excess baggage. It's expensive. And worse than that, it's disruptive. Guess who got the first package? I did.  I took that package and I started my own company in a completely different space. We grew meteoric growth, which taught me some very hard lessons when we went into the 2008 Great Recession.

We did fine for a couple of years. And then, in the third year, sales dropped to zero and, I was forced to walk away. A lot of lessons were learned there and I have plenty of battle scars from that, but taught me a lot of very valuable lessons it that are applied in this company.

And I've been with Core Value. I was hired as a consultant, on sales and marketing, several years ago in 2013 and did an audit of their sales and marketing process. And I gave over my report to the CEO and the report was essentially was saying, here's what you have.

And I would draw a line through all of it and start over. You can tell I'm not shy about delivering bad news. And, he said, I actually had come back the conclusion. I was looking for someone outside of the company to validate it. I'm going to do exactly that. Long story short. I ended up becoming a right-hand guy to that CEO and together we took the company down three different market paths. Core Value started selling to advisors. We started selling directly to business owners. And doing economic development work, through the national Institute of Standards and Technology and specific through their manufacturers extension partnership program. And I was 10 years in manufacturing.  And, those were interesting lines of business.  My colleagues Sue and I came to the conclusion that following three lines of business was actually not where the company should be.

It needed to shed two and focus on one. And I really, was very passionate about focusing on advisors and I'll quickly tell you why. It seems to me that the middle market of American companies with two and a half to a hundred million dollars in gross annual revenues, are the heart of our economy.

They're the backbone of our economy. They're our diversified companies, diversified workers. We have 44% of our job-based half of our GDP and 63% of new jobs in this sector of the economy. And yet Wall Street and big business media talk about the few thousand publics. And we hear every day about Ernst And Young, delivering services and Bain developing this process and strategic planning.

So little of it applies on main street. The businesses on main street all have two advisers at their table. They have a financial planner and they have a CPA. Those two trusted advisors can connect the business owner with the expertise, they need the resources, the capital and the knowledge that they need to make their company thrive.

And to help companies be resilient in the face of the COVID, fueled recession we're in right now. Hopefully we're coming out of very quickly right now. And that's how I ended up where we are today. 

Jeffrey Feldberg: [00:06:56] It's a fascinating story of what got you from here to there.

And let's talk about that now. So, let's put ourself in the shoes. If we could, for a moment, George of a business owner. Most business owners of mid-market companies would say, look George, I'm busy, I'm running the company. I'm growing it. I don't have enough time in the day to do what I need to do.

Why should I care about these advisors? Why should I care about value? Why should I care about any of these things?  

George Sandmann: [00:07:24] I'm an operator, by nature, I started grown, six companies now.

And so, I've stood in your shoes. I've sat at your desk. And as a business owner, we are very busy people. We're lucky to work 40 hours a week. We're working 60, 70, 80 hours a week every week doing generally something we love, but we're so busy focusing on the whirlwind, on the things going on around us, that we often don't lift our head up and think strategically about our business and to think strategically about your business, you need to take control of the fires that are popping up in the lobby. Your CFO wants to retire. You can't hire the right people. Your products are sunsetting and you're having a hard time replacing them. All of the things that are part of our lives, and are seeing vitally important in the moment. think about the thing that was vitally important to you 12 months ago and ask yourself if it's still important right now. All the things are vitally important. How do we create a company? How do you create a company that is stable, that is easy for you to run?  I'm not saying it's without work, but that it is planned. That is non chaotic to run. Maybe you're still putting in 40, 50 hours a week, but you're doing it according to a process. 

Keeping in mind and remembering why you founded the company and where you want the company to end up and Jeffrey, it seems to me that we lose sight of the fact that we start companies to convert our sweat and sometimes our treasure into valuable equity. One day we will sell to someone, so that we can fund our family's wealth goals.

And whether you're, decide to sell the company or to give it to your daughter or do a management buyout, whatever event is going to happen. You're going to leave your company one day. And to the extent that you can create a company, that the operation of which is well understood that has predictable revenue, predictable profits and cashflow.

Then you're going to have a company that is going to be deliver the income and ultimately the wealth that we all hope to attain through our life's work. 

Steve Wells: [00:09:29] So, George, if I heard you correctly, I think what you said was that the things that we need to do to create liquidity, or maybe even the next steps are probably the same things we need to do to build a successful company. Can you dig in a little deeper on that? 

George Sandmann: [00:09:45] Sure Stephen. We think in terms of three dimensions of business growth. And it starts with creating a company that has predictable profits and cash flow. and I add cashflow because I've built a company that was very profitable, but those profits were trapped in the balance sheet.

How do we stay away from that trap? How do we make sure that the company is generating the cash we need either to fund our own lives, if we're not interested in growing the company, how do we generate the cashflow we may need, if we do want to grow the company? If we find out that, Hey, I thought my company was worth $26 million.

It's worth 18 million. What are we going to do about that. And we can talk about that, those facets of value. if you'd like to dig in more deeply, but predictable profits and cash flow, and then leveraging that if we want to create predictable growth of profits and or predictable equity value in the business.

And I say equity value. We were talking, before we started the interview about equity value as an actionable number, meaning that we can monetize that equity value. So, knowing that I have a stock certificate, that has a hundred thousand dollars written on it is great. If there's no buyer.

Then it's useless. It's just a piece of paper. We need to have that same attitude when we think about the value of our own company. 

Jeffrey Feldberg: [00:11:01] Now, George you're in a unique position because the software that you make, powers, investment bankers, wealth managers, and the financial industry, and that gives you the ability to hear what's going on before other people would, know about that.

But to also see what some of the levers and the drivers are of businesses. So, for starters, I know a lot of business owners are saying, I'll get an investment banker, maybe when I have a liquidity event or I'll get a wealth advisor, perhaps when I have some kind of exit. But your software, helps business owners get to that point through advisers.

In some ways you're like the Intel inside for the financial industry, with what your software does. Can you talk to us as business owners of why it's important that we should be working with advisors in particular who have the power of your software?

What difference it's going to make for us day in, day out?

George Sandmann: [00:11:50] This is a software company at the end of the day. And although I'm very passionate about our mission, the software is the heart of what we're doing and what we're ultimately doing is helping you, the owner or the executive with a company in the SME space to understand your company, to analyze your company across, 18 different areas across the forces that are impacting your company from outside and the forces that are impacting your company inside and benchmark yourself against the other players in your industry based on market traded data.

So, how do you compare to best practices? How do your peers compare to best practices what steps should, and you take to implement best practices within your company? And that is vitally important information that is creating a strategic understanding, of your business. It is creating a set of tools, if you will, that you can choose to implement, to make your company reach your goals, whatever they may be. I want my company to be easier to run. I want to generate more cash. I'd like to prepare my company for sale. The software has been used with over 25,000 companies.

And let me briefly detail the professionals who were bringing the software to their clients. A little over 40% management consultants, not really surprising, 80% CPA business advisors. And here we're talking about CPAs that are working with companies to improve their financial operations, not simply generating a pretty P&L, but how do you gather that information?

How reliable is that information? And how do we create ways of looking out the windshield, so that we understand what the financial results are going to be before they are reality. How can we create those predictable profits and cashflow, and then the balance of our customer base is investment bankers?

Some of our most prolific users are investment bankers. They're using Core Value software to figure out if your company can go to market. 19 out of 20 companies, 95% of companies do not go to market through an investment banker and of the five that can go to market, they span the range of value. So, your two times earnings to your six times earnings. So, you should think very carefully. And I would urge you to think as far in advance, today about what is going on inside your company and how you can improve it so that you could create high confidence in your own.

And if needed high confidence in an acquirer's mind or a lender's mind, as to your company's ability to generate revenue and profit going into the future. And do it in a way that isn't simply will look what we did yesterday, but it's saying here's the operating manual for our business and here's how we're going to do it tomorrow.

 Steve Wells: [00:14:33] 

And I would imagine George, a lot of buyers have lots of different objectives and how they're going to make this transaction or this partnership or merger work sometimes requires debt. Sometimes it requires private equity, all kinds of things. So, I imagine your software is giving them the tools to structure the organization and that deal around what's going to be the most advantageous. Do you have any examples of how this helped that process? 

George Sandmann: [00:14:59] Sure. So, one of the important things to think about well in advance and one of the things that the analysis that we help you generate, is identifying the niche in which you're operating.

And the next question is, is this niche attractive to buyers? Is it a frothy M&A market? Or is it a stagnant M a market. Our customers, your advisor have helped companies say, huh, we're an education company, but we really want to be seen as a software company because education companies are getting a half to one-time gross revenues and software companies, software as a service companies are getting wild valuations right now. Let's just say 10 times EBITDA as a baseline.

And so, if we can architect a company over time that has changed it's focused on the market. Perhaps you've evolved your products and services set so that you're attractive in the higher range of multiples. Then you have done the same amount of work. You've simply done it in a better direction.

 The watering hole is over there, stop walking that way. And how do we get to the watering hole? It's the analysis, the Core Value generates and the understanding you will go through. So, there's no easy button there. This is hard work. But it is very valuable and rewarding work to understand where you are and importantly, where you need to get to and what the steps are to get there.

How do I build a company that is going to be valuable and sellable? 

Jeffrey Feldberg: [00:16:21] Let's pick it up from there, George. In the Deep Wealth Experience, we have business owners prepare, and prepare some more for their eventual liquidity. Whereas a liquid may take, nine months, the preparation can take years of time to do.

And one of the modules that we have in the Deep Wealth Experience, it's called the X Factors to Insanely Increase Your Enterprise Value. As you're talking about what the software does, in my mind, I have a vision where a business owner who's gone through the Deep Wealth Experience, we have them look at their business model of how they can change it, to create a market disruption.

It sounds like with their advisor, who's using your software, different scenarios can be put into the software to see what the sweet spots are for the liquidity event. For that particular company, that this scenario might be a lower enterprise value. Whereas this other scenario might be a higher enterprise value and you're saving potentially millions of dollars and years of time because you're simulating it in the software before you go to market with that.

Can you talk to us more about how you work in that kind of situation and the benefits of that? 

George Sandmann: [00:17:29] Sure, the software can support the work you just described in several ways. And although we don't model out, what would your company be like if we went from manufacturing is to understand very crisply the strong points.

Think of it as a very sophisticated SWOT analysis and this SWOT analysis, what's unique is it's connected to equity value. When we typically run a SWAT analysis with a business, we're not putting it in the context of equity value. And that's precisely what the software does. The analysis says, Hey,  if you do X, Y, and Z, here's the impact it will have on the equity value of your business, as importantly, because you were not doing A, B, and C, you will not be able to monetize late value that exists in your company, but that isn't sellable because it's too high.  it's like going for a loan. If the bank says, you look very risky, they're going to charge you 30%. If the bank says you presented very low risk profile.

We're going to lend you the money at 2%. How do you get that? The same applies to equity value when a buyer, and I know I'm preaching to the choir when a buyer says, wow, I am really believing that this company not only can continue where it is today, but I can grow it going into the future, then the buyer will pay a premium.

What the software does. It says, Hey, listen, let's analyze your place in the market. Let's analyze your customer, set your niche, and understand whether or not those are going to be attractive, whether or not because we're comparing your company to closed transactions. It's whether or not the market is rewarding, these behaviors with additional value. Does thatmake sense, Jeffrey? 

Jeffrey Feldberg: [00:19:09] Yes, it does George. When it comes to the liquidity event, business owners have one chance to get it right. And you want to make sure that you're going to make it 

count. And so, it sounds like with the scenario planning and what the software does in the forecasting that you can do, it's a wonderful way of taking a peek into a potential future.

It's helping you prepare your understanding, the strengths and the weaknesses of your business in a way that you couldn't otherwise do because of what your software allows you to do with the data that you're putting in.

And the analysis that you're doing, which as a business owner is a terrific tool to have. 

George Sandmann: [00:19:44] Yeah. And Jeffrey, I've got to say, when we think in terms of the Deep Wealth program, which is fantastic because your business owners and then understanding, some of the similar areas, that Core Value is helping to analyze empirically.

And the key is that your business today, has a cap on value, right? But if I think about your business from a financial buyer's perspective, if you're a low risk company, I will take your EBITDA or revenues depending on the industry, but what's like your EBITDA and I multiplied by somewhere, some X factor, the multiple. And your limiter is the top end of the range of multiples. And the top end of the range of multiples is clicked down, by the risk profile you present. You need to sort out as soon as possible. I would urge you the maximum value of your business is at today's earnings and then think about whether or not, and get some advice. This is where advisors come in, your personal financial planner, your CPA. And if you can't find a person, that'll have this conversation with you, Jeffrey and Steven can help. What am I going to net when I sell my company?

Everyone on this call has probably sold at least one home. The check you got was not equal to the selling price, right? $1 million becomes. we start taking taxes and fees off the top. It's the same. When you sell a business, what are you going to net?

And then what does that net amount generate? when you throw it into a Monte Carlo, which we all do with our financial planners, what is that going to net me in terms of lifestyle? And am I going to have to make lifestyle sacrifices, or am I going to be able to afford a slightly better lifestyle or have, additional resources for my children and, those conversations the earlier you have that conversation the better position you were in to what, even if you're having this conversation with yourself, but don't fool yourself, don't buy your own baloney, get data, get research, and understand if you are where you need to be, or if you need to move. If you need to move to an aspirational revenue and aspirational value, then the sooner you start, the more relaxed the journey is going to be.

You cannot show up nine months, Jeffrey to your point, before a transaction and say, I know my company is worth 18 today, but it could be worth 26. Let's get there. There's a very small likelihood that will happen. And we see that in the data.   The neat thing I would say to you as business owners is that the companies that implement a system like Core Value and Core Value, it's not carved into tablets and carried down from a mountain.

It isn't the result of very careful research. It was born at MIT and his 30 years of proof in the market. It has been software for a decade. it has been used to create billions and billions of dollars value for your friends. The people you're playing golf with the people you're on vacation with, and people who have sold their companies were creating billions of dollars of value because they're taking a better run company with a lower risk profile to market. And that's my soapbox.  I've been beating that gong long and hard.  I'm very passionate. 

Steve Wells: [00:22:45] I can see that. I believe it. And you're preaching to the choir here. I want to just reinforce something you've said, and maybe you can expound on it .

But it seems when we talk to a lot of business owners they start with valuation and  it's like they go to a realtor. It's what's my house worth. And you can sell that. and I think what we try to counsel them. And what you were doing, with your company is saying, that value is not really etched in stone. It can be changed, using the techniques and analysis that you're going to provide. And someone can give you a value, but that value doesn't exist, unless someone is willing to paid for it, and also how do you increase that value?

George Sandmann: [00:23:19] Absolutely. Our biggest strategic partner is the National Association of Certified Valuators and Analysts. They have 7,000 business valuators it's about 80% of the business valuators in the United States and Canada.

 They deploy Core Value to their community, and hand in glove with processes like Deep Wealth, it makes company value actionable. And you need to understand how you're going to take action on the value of your company and how you're going to make sure your company is attractive to the market and attractive to the market can have a lot of different, facets.

I have a good friend who took a company that was a relatively interesting, plastics company. They made injection molded plastics for us special forces. And he looked around and said, okay, I have one customer. And I sit back and wait for orders to come, and there's nothing I can do to impact the market.

He looked around and he said, you know who, I'm going to go after I'm going to go after Pelican Case cause Pelican case is a Mark get mover. And if I can stick my thumb in their eye, if I can be enough of a challenge to them in the market, then they're going to pay attention to me and potentially acquiring me.

 And Jamie currently is living a very comfortable life, with his new wife in Australia.  Jamie made a strategic decision to change the business he was in to go from government contracts into the consumer market and to outcompete or to become a pain to a potential buyer.

Those are the types of strategies I'm talking about. We have a treasure trove of examples, of stories, of cases, of companies that have made this conscious decision to do just that. And that is what Deep Wealth is all about. That is what Core Value is all about. How do we help you make conscious, informed decisions that are going to benefit your future and benefit the people that got you there? Benefit your employees and the community in which you live and operate 

Jeffrey Feldberg: [00:25:08] Some amazing things that you're doing. Let's continue along that line. 

Based on what you're seeing through Core Value and knowing what you know today, if you were to tell a business owner who's saying, Hey, George, I have a terrific idea for this business.

And we all know that the best idea without execution is nothing.  What would be your advice, whether your brand new to business or you've been running your business for decades? Where are some of the typical areas that the Core Value software identifies an isolate where business owners are failing, what would your insights and advice be to business owners on that? 

 George Sandmann: [00:25:42] I would offer, three pieces of advice. One, and you've all heard it before, but it is critically important to have a goal. You need to define the goal. And whether you read Traction, Scaling Up, Deep Wealth, you need to define for yourself a goal and write it down.

And that goal can be, three years from now, 40 years from now, what is the goal? Once you have a goal start planning backwards, and that is how great companies are built. When I say great companies, I'm not talking about Johnson and Johnson, I'm talking about a company that serve your life goals, your personal life goals.

Its where financial planners start their inquiry. It's where the best business coaches start their inquiry. Now let's get a little more granular. When you look inside the business, look at the data. There are two things about which you should actually be staring at the ceiling at night.

One is sales and marketing. And sales and marketing is the number one contributor to the value gap. Perennially. We're almost a decade in here and that has not changed I can tell you where it swaps, but generally speaking, it's number one, contributor to the value gap. And even if your sales team is hitting their numbers, if they're not doing it according to a process, and by a process I mean that your sales and marketing team knows that for every lead, every session on the website will generate 42 cents of revenue. if they can't explain that chain to you, then you do not have a process and that process you can improve it. And you can scale it.

And if I'm going to acquire your company, I want understand that I can look at the results that your best sales people are generating and I can cookie cutter it again and again, knowing that the more leads I throw in the top of the funnel, the more 42 cents, I'm going to get out the bottom.

That's the number one contributor to the value gap. Now, CoreValue analyzes. what are called red flags and ladies and gentlemen inside most businesses, there are existential threats to growth and existential threats to equity value. And you should understand what those existential threats are. 

I'm just going to put litigation down as a footnote. I'm an attorney by training, litigation is a business killer. I'm not a fan. Senior management is the number one red flag right now. And what we've seen over the last, several months is senior management becoming the number one red flags. and it goes to roles and responsibilities, well defined roles and responsibilities. And, it goes to having a well-documented or chart with accountabilities.

But if you think about Jamie Diamond, who just told the JP Morgan Chase Executive team, you know what, you're coming back to Manhattan, and you're going to sit at your desks and you're going to do it. What is it? October 15th. You're seeing this play out in the market.

I was on with a management consultant who specializes in leadership, yesterday. The clients don't know each other. They're having exactly the same senior management issues. We're starting to see the strain of working remotely, play out inside companies and savvy business owners, business leaders are saying, huh, I have to understand why I'm feeling this pain. And then I have to as quickly as possible to stop that pain. 

Those three areas can really have a profound impact on a company. 

Steve Wells: [00:28:55] So, if I'm a mid-market business here, and I'm thinking about how to create a more value. And I look at myself and you're helping me look at this and I'm going, I don't have a management team. I've been doing this myself. It could be ego.  Do you see that pop up in some of your examples? 

George Sandmann: [00:29:11] Absolutely. It's one of the options on many of the questions. I don't have a management team, which by the way, if you think about it, let's flip that around and think about that as a risk factor for the business.

 You're one person away from catastrophe inside your company. On the flip side, the positive side is there's only one person in the world, you, who understands how to run this business. And if I'm going to acquire your company, perhaps you think you're going to sell it and sail off into the sunset. Your best-case scenario is that you're going to sell the business and work there for someone else for a while. Those can be very positive experiences.

There are also plenty of stories of them being less than positive experiences. Generally, for the business owner, there's a lot of seller’s remorse. We work very closely credentialed exit planners. So, we have, hundreds of them as customers. And we hear that pretty routinely back from the advisors.

The seller got the wire, got the money in their account, but now instead of being the captain of the ship, they're the first mate. And that's a tough transition, for those of us who are used to running the show, to have to make, especially when you're beholding to someone else.

Steve Wells: [00:30:13] That's a big thing that comes up and I think is why maybe a lot of businesses don't go through with any type of a transaction. The owner gets cold feet and they think about, I've got to give up a lot. 

George Sandmann: [00:30:22] Absolutely.  I asked myself, this question, and I know that you guys do as well, you have both chosen to get back into business, to help business owners with this exact issue. What is my legacy? It's what if the 30 years that I've invested in a career so far? How can I leverage that? How can I create some good in the market? And you guys are doing exactly that and I admire you for it. And as business owners, all of us are going to ask that question, whether it's, how do I leave a better life for my kids? To how do I buy the biggest house on the golf course?  We're motivated by a lot of different factors, and that's part of the Deep Wealth conversation. 

Jeffrey Feldberg: [00:30:56] George, I'm wondering if you can share some insights with our community. As we sit right now, the pandemic continues. The second wave is just starting to come upon us.  This has gone a lot longer than what was originally anticipated. So, knowing what we've seen and knowing what, in terms of finding the core value in a business, what advice can you give to the business owners when you look at businesses, when you're speaking to the different advisors of how to now navigate true a pandemic that doesn't seem to be going anywhere?

And we would all agree that business owners, we are the ones that make things happen. We make the world go round with what we do in the problems that we solve. So, with what you're saying from the advisors, with your experience, with the CoreValue software, what are some insights for business owners independent right now that they can take to market tomorrow?

George Sandmann: [00:31:45] Absolutely. That's a great question. I think now is a terrific time to get back to basics. Where is your company going? But let's get back to basics, in a larger sense, what is it that the company is doing and what are the things in the whirlwind and the way that you're running your business all day, every day, that don't actually need to get done.

if you did not have your time commanded by those other tasks, what would you do with the time you free up? And, what's interesting in this pandemic, first of all, how often we're hearing from advisors and from business owners that, they've never been busier.

This is supposed to be a quieter time. And yet people are working, 60, 70, 80 hours a week. Routinely week after week. And, and in industries where they're not used to it CPAs right now, are going gangbusters in a lot of different ways that are on top of their traditional work.

And that is because their clients are in the same place. Think about the basics of your business. and to your point, Stephen, about a management team, write down the different things you do and write down as job descriptions and try to separate your role as a chief operating officer from your role as the CEO, and define what that job is crisply and what that role is accountable for.

The chief executive officer is accountable for maximizing shareholder value within a business’s vision and mission.  Are there other people in the business or on demand experts that you can bring in, who can help you clear your desk a bit so that you can start taking a strategic view of your business?

Because now is a great time to analyze the basics, strengthen the basics, and then really start positioning your company for the future so that when this recovery really takes off, and I personally believe that we're going to go into a V recovery, you are positioned you're in the starting blocks and ready to go.

And that can be a sales process. Operations, their ability to deliver on the promises made to the market by sales is now a good time to be looking at your customer satisfaction and figuring out. I always joke that it's farm to table. I do figure it out, that the cow eating grass in the field, to becoming steak dinner, maybe I should have used a kinder analogy, but how do you focus way out on the windshield to have a better customer experience. It's only going to help your company be stronger and position you for growth. 

Jeffrey Feldberg: [00:34:09] Thank you, George. That's terrific. As we begin to wrap things up here, just a few more questions.

So, for starters, as a business owner, maybe I have an advisor, maybe I don't, but how could I find an advisor that's using the core value software? Where would I go to find that? 

 George Sandmann: [00:34:25] What I would invite you to do is to take one of two roads, one reach out to your, your CPA or a management consultant you've worked with in the past and ask for CoreValue by name. The average company, the implements the CoreValue process sees their gross revenues increased 21.63% per year.

 Ask for CoreValue by name. The other way is to email us and we would be glad to connect you with two or three advisors, that we think I have the chops to work with business owners. and we will simply make a referral. It's arm’s length, it's up to you, whether or not you decide to contact them and hire them.

but remember core value, the process starts with a free initial conversation that anyone who uses CoreValue has. And it's a preliminary analysis that will start educating you about the bottlenecks to growth and to equity value that may exist. And I hate to tell you in all likelihood exists within your business.

Steve Wells: [00:35:27] George, we always ask this question and it always makes me think about the answer and how I would answer it as well. But if you look back on your life and you look back to the younger George working and what you were doing, and then you look at where you are right now, what would you tell yourself back then?

If you could go back in history, so back to the future and sit there and with your DeLorean and say, okay, listen, here's what's going to happen, here’s what you need to think about. 

 George Sandmann: [00:35:53] I made a conscious choice years ago. I was lucky you don't have to be a legal assistant at Skadden Arps and very large and successful law firm. And I could have gone down that path and been a corporate attorney, and worked for Skadden or a similar firm. And.  I didn't, and I always think of it in terms of the difference between being a privateer and joining the Navy.

And, that would have been the Navy route. And I chose the privateer route. The more of going out on my own. I'm in creating my own fortune with a small F and what I counsel my sons is to lead a goal-oriented life, makeup, the plan, there are no bad decisions in life. There's only indecision.

You can always do a course correction, but I get my sons to understand that if they have a goal, then they can move from goal to goal and it doesn't have to be, I'm going to retire with $50 million. That's too far out on the horizon. Where are you going to be three, four, five years from now in theory.

And if you move from goal to goal, I wish that I had a better definition of goals as I move through life. And in the early part of my career, I really bounced. I was just lucky. I went, started a company and went to the other company, and got hired by the third company.

I wasn't really in control. I was working my tail off, but not in control. It wasn't until I came to CoreValue and said, huh, am I going to invest the next and possibly the final portion of my career in this business that I started measuring things against my personal goals are my professional goals and those are tied of course, into my financial goals.

And, that would be the one thing I would counsel a young George Sandmann listen, but move from goal to goal. And you may have a less chaotic life. 

Jeffrey Feldberg: [00:37:35] That's wonderful advice, George, in our show notes, we'll put a link to your website. Is there anywhere else, if somebody would like to find you online is there anywhere else that they can find you? 

George Sandmann: [00:37:47] There's our website. I'm on LinkedIn as is the company. We have a nascent YouTube channel, where actually you can see video of interviews with advisors. They're talking about actual cases, actual companies with whom this advisor has worked and what they've experienced, what they're seeing. and that YouTube channel is going to be augmented, periodically over time, very routinely over time.  

Jeffrey Feldberg: [00:38:10] George, once again, thank you for taking time out of your busy schedule, to speak with us here on the, Sell My Business Podcast and share your wisdom with the community. Stay healthy and safe. 

George Sandmann: [00:38:20] Thank you very much, gentlemen. This was a lot of fun.