Podcast Episode 13 with Transcription – Rem Oculee

Rem Oculee:

Welcome to the Exit Mindset Podcast. I’m Rem Oculee. 15 years ago, when I was trying to sell one of my companies, I couldn’t get what I thought was the right price for it. I realized I had things set up the wrong way, even though the company was profitable. So, I spent years researching and studying exit strategies to improve my company’s valuation. I discovered that the same process that improves valuation would improve business profitability and give me more free time. I’m here to show you what I have learned. You see, the best way to grow your business is to look at it from the perspective of someone who’s going to buy your company. Once you start thinking that way, magic happens, and you start seeing things you could not see before. But that’s not all, I also discovered the three principles that you must know to command a better price for your company. The three principles are first, the product, second, the infrastructure, and third, the conversation you have with the consumer. Once you master these three principles, you will be on your way to increasing your profits, your company valuation, and get more work-life balance. So, listen in and learn how you can do that. I will teach you through this podcast, lessons from the trenches, and we will have a dialogue with some of the greatest minds on the planet.

Do you ever wonder, why is my business not going the way I think it should go, despite the fact that I have everything? I have all the parts, I have everything in the right place, but nothing is going well. And I’m sure something’s going well, but maybe more along the lines of, things aren’t as I like them to be. If that question crosses your mind, then I have an answer, you need a wrench. So, let’s get started. In many cases the biggest problem is not so much that your business is lacking something, but the parts aren’t tied up together in a good way. You need to bolt it together. You need to do something about the connection between those parts. And yes, sometimes for sure, you gotta reconfigure some parts. You gotta replace some parts and you got to invent new parts. So, what I found over the years that many businesses and many companies don’t use that wrench to put things in the right way, to get the company moving in the right track and produce the results they’re looking for.

So, three things have to happen for you to be able to exercise the wrench concept. Which is, one, you have to accept the fact that your company isn’t tight, that there are parts of it are not in the right place. The second thing, you have to identify what these parts are that need to be tightened. And finally, the third step is to fix it and use certain strategies to do that, which we’ll show you. So, let’s start with the first aspect of this. First, you have to accept it. And I know it sounds simple, but lots of times you have to overcome that psychological hurdle, that there is something that is not right in there, and that it does need tightening. That maybe the problem is not so much that everything is wrong, or the world is wrong, or this or that is wrong. It really is just you haven’t connected it together.

I’m going to give you an analogy here. If you’re driving in the freeway and parts of your car, aren’t tightened up correctly, do you think the car is going to run well? Of course not. What if in the middle of your drive, one of the parts fall? What’s going to happen? It’s going to stall; it is your problem. You know, in some cases, a part would fall, and your car would still continue to run. But that is one case of it, another case, completely breaks down. So, it is important that you always make sure that your engine as well, your company, your business is tightened up as well in the right way. The second thing you gotta do is that you gotta reframe your thinking to accept and wrap your head around the concept of fixing things by tightening the bolts. Which means you got to stop looking for the problems, being something other than what’s internally problematic for you.

And that again, requires you to focus, requires you to think clearly. And it requires you to take a higher level view of your company to see where the breakdown points are. And finally, remember what we talked about in the past. 90% of the solution is knowing what the problem is. 10% is solving it, becomes easier. The problem with most people, as we talked about before, is that most people put 90% of their efforts on the solution, and 10% understanding the problem is. And what happens here, lots of times people are working on the wrong solution because you do go on tangent and find the wrong, do the wrong things and not necessarily get to the things that will get you to the ultimate objective and goal that you’re looking for. But by focusing on the problem and understanding it and knowing what it is, you’re gonna be able to spend less time on the solution itself.

So, let me give you a key way of doing that. After you understand what the issues are and where the weak points are, you’re going to have to start taking what I call small steps there. Now the conventional way of doing this, is take small steps, means that take ten years to do one item. It’s small step, easy does it. Take five years to do one small thing, five years another, and then you get done with the whole thing. But that’s not my opinion of what small steps are. Small steps does not equal slow steps. That’s two different things. Taking small steps means that if there’s a problem that’s complex and there’s too much to chew, you break it down to bites, small bites. So, what you do, you take a big issue that you’ve got and start taking one small action that could be helpful to solving the problem in a short period of time.

That’s what I mean by small steps. So, if you take small steps, you will be able to move from one to the next and it finishes. And then I go back to previous episode where I talked to the principle of finite volume. Every part you’ve got to tighten up. There’s a number of turns on that bolt, that at some point, the bolt doesn’t turn anymore, right? And it’s the same thing with the problems you have that you have to fix. Now, I’m going to give you a baseline for this. The first thing you got to understand is that you have a number of issues that you will identify as being the weak points in the company that you need to use the wrench to tighten up those issues. Then, you take each one of them and slowly break it down into a number of pieces that you must tackle to finish up the job.

And some of those things might take a day. Some of these things might take a week, some of it might take six months. It doesn’t matter. At the end of the day, you take one, and let’s say this particular situation would take a month. So, you break it down into say, 20 pieces, and you take one piece and finish it, and that’s it. Your next one. Next one, if a particular part of it requires multiple actions say, might take a week to do it; it’s all connected. Then you do use that week and chip at that particular part until you get it done. And then you add the one that takes two days. Then you add the one that takes seven days, another seven days, and you add the one that takes one day, on and on and on. And next thing you know, a third day job is complete.

I will tell you, if you use that principle, that concept, it is one of the most powerful concepts you can ever undertake, because it really gets the job done. One of the reasons people don’t finish the work or the jobs or finish, get rid of problems, because they’re too overwhelming. When it’s overwhelming, you can’t finish it. You’ll look at it, and it looks like a boogeyman. It looks like a gigantic undertaking. And most people when they, when it’s too big, too far, they tend to give up. If I take the biggest goal for you and break it down to small pieces, I can guarantee you’re going to do it. If I give you 10 miles, and I say, “Run 10 miles.” You’re probably going to say, “No I don’t want to run 10 miles.” What if I give you a hundred? Maybe some will. What if I say, “Go run a hundred miles.”

You’d say, “I don’t want to run a hundred miles.” But if I say to you, “What, tell you what, today just go ahead and run one mile.” And you go, “Okay.” I’ll do the next day, try and do a mile and a half. Go, okay. The third day run two miles. Go, okay. And remember, at some point you got to probably be able to run maybe 10, 20 miles for the day. And next thing you know that hundred miles is over with. It’s over and it’s finished, and you got it done. You got to the destination. I think it’s the same thing with everything we’re doing over here with respect to your particular business and business model. And remember everyone’s business model is different. Yours is certainly going to be very different, but what you want to do is examine it methodically. So, the third element we’re going to go to is what I call, the fix.

So, how do we fix it? Now, I gave you a conceptual of how to approach it in terms of identifying and breaking it down to pieces. Let’s go to the, sort of the high-level parts that you’ve got to look at. In the Exit Mindset, always talk about three parts in your company that are important to you, and that would create the most leverage if you fix them, if you continue to grow them and scale them and make them self-running. And that is your product, your infrastructure, and your conversation. So, your product could be a weak point. And I can’t tell you how many times I’ve seen companies and I’ve since talked to CEOs that have problem with that. I consulted with CEO’s that have a problem with that. I had business owners that approached me for advice, and I get advice on that product is one of the most important things in your company.

You gotta tighten up your product. And I can tell you the number of times that I’ve seen in those companies. And I’ve seen in my own situation with my own company, as I examine some of the products that we have in our infrastructure, in our company. And I find that this needs to be changed, modified, tightened up. And the reason I say tightened up, because sometimes you really don’t have to change the product. It’s not that. It’s just that you get it tightened the bolts around it a little bit. It’s maybe an add-on, maybe it’s something that you got to take out. You might want to change it, you might want to do it, something. There are many things I can tell you right now that could be done differently. And the reason I don’t want to do one specific example, because I don’t want to box any of you into thinking that this is something that is not relating to you.

It relates to you, for sure. If you look at your product, examine it, and no matter what that is, whether it’s a physical product, a service, or a hybrid of a physical and a service. You’re going to find there are points in there that you can make it make better, and you might have the perfect product. But if you do, you probably wouldn’t be listening to that podcast. So, I’m sure you’re thinking, you have some thoughts about some of the things you’re doing. As I am every day, because I’m everyday looking at the products our companies are creating and helping the consumer with, and I find things. And even after time, and by the way, there’s one more aspect to this you need to also keep in mind. It’s not just that the product needs to be improved because simply use improvement. Sometimes time creates a need for improvements.

Keep that in mind. Don’t forget that at all. Because as you go in time, people’s needs change. Other products come into the marketplace; things happen. So, you constantly need to look and see, is there something I need to tighten up in my product? And go from there. So, that’s one. The second thing we got to go for is the infrastructure, which is the second pillar of the Exit Mindset. And by the way, as you build all these things, remember you’re building it so to improve your company, improve your profits, you improve the freedom that you have in terms of your time and improve the quality of your offering. So, all these things that will come into play so that you create a better valuation for your company. So, that one day, if you decide to sell it, then you get a better price for it.

And by self, not only has the company has given you over the years, the value that you’re looking from it, but also the valuation that you look for from others. So, if you think about the fixes in terms of, in terms of, what you’re trying to do. A lot of that relates to the fact that you’re trying to create two things here, a better model for yourself to be comfortable. In addition to that, you’re trying to create a better valuation. So, certainly somebody coming to buy a company is going to want to know that your company is sort of, I would call it robust, not flimsy, tight. In my mind, when I see it, I consider it flimsy. When I see a company that’s sort of flimsy in, in some area, it doesn’t mean it’s a bad company or I’m being critical of the company. I just think certain things are not robust, tight, and creates a perception that things need to improve or change.

So, I’m going to give you simple three methods that you could use to figure it out. First thing is ask others, ask the people around you, ask your employees. What is it do they perceive? Ask your customers, anybody. Keep going in that path and to understand what are the weak points that needs to be tightened up? My guarantee to you is that you will get information on that one. Over the years, I’ve gotten a lot of information from my employees. It’s how I get my biggest breakthroughs; I get them from them. Because I asked a simple question, “What are some of the problems you’re seeing, or what are the biggest issues?” And they say, “Well, I see this, I see that.” I go, “Okay, well, let me think about that.” And I try and trace the source of the problem. And once I trace the source of the problem, sometimes I find that this source of that issue is actually a major source of creating other problems.

So if I fix that, I just killed three birds with one stone. Okay? So, by talking to your people, talking to others and even your customers, you’re going to find lotta points. You identify what the issues are that needs to be tightened up. The second method is to look at data, look at your data. Many times I’ve just looked at my data and I realized just by analyzing it in a very high level way, very simple way, I go, okay, I see where the problem is here. That needs to be tightened up, this part. If I’m looking at my sales, they’re not that great. I’ll go, okay, well maybe that particular unit isn’t doing good. I can even identify, source it to the product sometimes. If I notice that a certain product that should be moving better is not moving as well, and I correlate that to the data from our revenues.

And I realize, maybe there’s a problem in this particular area, because I’m aware of what goes on in my company. That’s one thing I want you to be aware of is that this all depends on your company. You’re the one that knows what’s inside your company. So, when you spot certain kind of data that you would clearly, if you’re thinking, will let you know that there’s something that needs to be tightened up and made better. The third thing you got to do to identify what the problems are, is ask yourself what I consider to be empowering questions, questions that are proactive. So, ask yourself things like, where do I think the problem is? What can I do to fix this issue? Where do I think really this problem is coming from? You don’t want to ask it in a way where you’re despondent and feeling like, oh, there’s a problem I can’t fix it.

That’s not going to be helpful. What you want to do is, is ask what I call proactive questions. These kinds of questions are again, similar to the following. Where do I think the biggest problem is? If this gets fixed, will this get to make it better? If I fix this particular issue or make this particular issue a bit better, would it have ramifications on other things in there, and what are they? When you start asking those kinds of questions, you’re going to find it going to come up with answers. And it’s give you a supplement to asking others and looking at data. And in the end, you’re going to have a good way and a methodology for tackling and identifying what the issues are. So, the thing you got to do at the end of the day is figuring out what does this wrench look like?

Because the wrench is a metaphor. Wrench is not that you got to, obviously you and I know you’re not going to go get a wrench, unless your business needs one. But ultimately, it’s more of a, it could be a person. It could be some sort of a process that you would implement. It could be an observation that you asked somebody to do something about. It could be multiple things. It could be something that would impact what you are doing. It could be an action of course, and all starts with thinking then acting. Which is the most important thing, and in doing anything. Remember, if you don’t take action, nothing happens. You need to take action. And part of tightening up an engine or a business is that you gotta do, you gotta work on multiple areas on the, on the business itself or the engine as a metaphor. Because when you tighten up something, you go one area, you tighten up something. Then you go another area, you tighten up something. On and on and on, until you find the optimal operating conditions for your business. So, if you want more information on strategies and tactics, visit my website, the exitmindset.com. If you need help, there are many resources in there that could assist you with some of things you’re looking for to improve your business. And remember, action is everything. Use it or lose it. I’m Rem Oculee, and I will see you on the next podcast.

You’ve just listened to the Exit Mindset Podcast with Rem Oculee. If you haven’t yet subscribed or followed, please do so in your podcast listening app. Or better yet, visit exitmindset.com to join the conversation, access the show notes and discover our bonus content. Lastly, we want to help as many business owners as possible. If you know anyone who could benefit from the information given in this podcast, please feel free to share it with them. Until next time…

Want to ask Rem a business related question directly? Send us an email askrem@exitmindset.com.