How to Look at the Economy as a Business Owner – Transcript
Rem Oculee (00:05):
Welcome to the Exit Mindset podcast. I am 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 spend 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 DEFRA structure. 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, blessings from the trenches, and we will have a dialogue with some of the greatest minds on the planet.
Rem Oculee (01:30):
Now, today, we are going to talk about the economy we are in COVID-19 era, and hopefully we’re going to be out of it pretty soon. But in the meantime, while we’re here, there are a lot of things we got to think about and process as business owners. And one of the first things we got to think about is that how are we looking at the economy every day? You’re going to face gloom and doom every day. You’re going to hear this company laid off people. The economy is doing this. Our GDP is lower on and on and on. It’s a slew of negative news, not dimension. The casualties you get, you know, you hear about every day. So in that insane situation, how do you keep your sanity? How do you maintain a positive outlook? So to do that, I’m going to start by telling you about a story I heard about long time ago.
Rem Oculee (02:19):
I don’t know what the source of it is, but it really stuck in my head and always remember it and always use it. The story goes that way. A blind man has a cart and he sells on the street one day, his son sees him and it comes through and says, dad, what are you doing? He says, what am I doing? I’m selling my stuff here. And the son goes, didn’t, you know, the economy was bad. He says, no, I guess now I know now is, okay. Son goes and come back a week later, he sees his dad sitting on the pavement next to the cart. He goes, dad, what are you doing? And the father says to him, you me, the economy is bad. So I stopped selling the moral of the story is that his dad did not know that the economy was bad.
Rem Oculee (03:07):
And he was doing normally and doing well. But as soon as he figured that the economy was bad, he figured he can do anything. What does that tell you? It tells it’s all in your head to a degree. Of course, we’re not suggesting that there are no impact from the economy, but, but if you decide that the economy is the only factor that’s going to contribute to your success, then you’re correct. Whatever your head, whatever your brain tells you, whatever your mind tells you is going to be true. If it tells you things are bad, they’re going to be bad. Things are okay. They’re going to be okay. Things are great. It’s going to be great. I’ve seen countless number of successes over the years where people went through bad economies. I came out ahead and I’ve seen people that led economies that are even minor destroyed them because that economy wasn’t as good as they expected it to be.
Rem Oculee (03:57):
It’s in your expectations. There are a lot of things we can talk about when it comes to that. But ultimately we want to focus on you and your business. As a business owner, you’re going to be faced constantly with barrage of things that are going to be adverse and going to cause you to pause and think the whole world is going to collapse. The key to this is to realize the world isn’t going to collapse and maybe that’s an illusion. And that illusion must be looked at as exactly that. And if you have an illusion in front of you, you wouldn’t react in the same way. And if you don’t, if you’ve known the reality, the reality is you’re able to navigate the reality of there’s always something you can do. And the reality is that there are many ways to exit bad situations and the right way, and without having to have complete devastation, there are many, many examples.
Rem Oculee (04:49):
Even in this economy that I’ve seen, I’ve seen a company that sells whiskey starts selling hand sanitizer. What does that tell you? It tells you that there were a little bit more thoughtful and perhaps they ignored the reality that there is some situation, bad situation out there. Now I’ve heard other companies that are actually took advantage of the economy in the way it was assessed, selling more of their product example, companies that are selling plastic glass, where they decided that they could actually sell their product to put barriers between tables at restaurants. So this is just an example, companies that actually did something about it. But forget that, forget a complete shift in your product and the exit mindset. We talk about the product and that’s the reason I bring those companies up because in the exit mindset, we say your product is King. And the number one thing you’ve got to look at from an exit perspective is that if you’re going to sell your companies, what is your product?
Rem Oculee (05:50):
So if you think of the company that converted their whiskey producing operation into hand Sanchez operation, to make more profit, if you are a buyer of that company, what would you think when you come into and COVID-19 figure, maybe I buy myself a business because I want to do something other than what I’m doing right now, or I want to expand. You are going to look at that company and go, perhaps that company has got more potential than the company. That’s just selling a product. Can’t even pivot. The fact that the company can adjust to an adverse environment has made this company more palatable. I’ll make you a bet that they would command a better price by the seller themselves, by the company owner. They would say to the seller, look, look at this company, it’s producing X amount of revenue and even a COVID-19 hit.
Rem Oculee (06:37):
We just shifted operations and we still make an X amount of revenues more or less, or you never know, just depends. So you just created a better valuation by having that stability and the ability not to think negatively, not per that person could have easily thought, Hey, I don’t think I could do anything here right now. I’ll sell what I sell. Probably maybe people buy more, less. I mean, there’s an argument that people are drinking more, but not everybody’s exactly selling the same amounts. And a lot of people are finding that their product isn’t selling as much. And that particular company was selling a little bit of a higher end product, but now they made, made it through a different product line. So keep that in mind. As you look at your company, now you may not necessarily have to tweak your product. Maybe you don’t have the ability to change a product line easily, even though I do think you should think about it.
Rem Oculee (07:30):
Take a look at your infrastructure, what changes you can make in your infrastructure and the exit mindset. We talk about the three components, product, infrastructure, and conversation. First of all, what you can add to your infrastructure that could be helpful to you. There are some companies that added people to their staff. Some companies just said, we’re going to lay off. Not again, granted, there are difficulties depending on the situation, but if you think carefully about your particular business, you’re going to find some pockets that you can improve on in your infrastructure. I’m not suggesting you go out and hire, but I’m suggesting that perhaps a key hire might be useful. Somebody that could be beneficial to your type of business that could create business or help with the offering that you have. That’s one way to do it. Now, another way to do it is maybe to streamline some of the excess fat that you have in your operation in terms of processes, in terms of, in terms of when one of my friends call it dripping nickels or dropping dollars through your pocket and business, lots of times, you’re going to find a lot of people.
Rem Oculee (08:38):
A lot of companies are just normal times. They’re just spending on things that they don’t even think about. It just makes sense. But if you look at your costs carefully might be able to streamline some of these things and have a little bit of better cash flow in your, in your business. Maybe something you’re spending on you donation, maybe some subscription or something like that, or some service you don’t need. Again, it just depends. So that’s the second thing. The third element of the exit mindset of course, is the conversation. And I remind you, or if you have not heard this before, and this is your first podcast, then the exit mindset have three principles that relies on. And if this is the first time you’ve listened to this podcast, then we talk about the conversation that conversations, any verbal nonverbal communication that you would have with the consumer, no matter what it is, it doesn’t have to be written.
Rem Oculee (09:30):
Doesn’t have to be verbal. Any communication, any perception that consumer have is there is the conversation you have with them. And here again, what can you do to improve the conversation? There are numb. Every business is different. There are a number of ways you can look at your situation and understand, are you communicating with the consumer in a way that you can change simply case in point. I’m just going to bring that up because this is some of the things I see from companies that I look at. Some companies simply change the conversation to the fact that during COVID-19, there might be ways for you to use our product, or maybe they’ve given some discounts. In some cases they might’ve given some, uh, some, uh, add on, they might add an extra services. Well, that’s part of the conversation you have with your consumer. Your consumer will respond and we’ll work with you probably because you have something for them that adds value to their life.
Rem Oculee (10:22):
So again, I’m not suggesting that there’s one of these things or the other is the solution because every business is unique and the exit mindset is based on ideas that you can apply to your business and a company. So if you think about these things from a buyer’s perspective, a buyer of your company perspective, you’re going to be able to figure out things that you couldn’t figure out normally. So the idea behind is that you, you put yourself in the bar buyer’s perspective, let’s say you want to sell your company. You’re in COVID-19 situation right now that we have right now, you as a buyer, what would you want from the accompany it yourself. If you’re going to buy your own company from somebody else again, is it a, is it one of those three things that he could change that could make the company more appealing and more valuable is what he should be looking at.
Rem Oculee (11:08):
Let’s go back to the story of the line, man, that was selling on the street. Again, if you just give up because the economy’s bad and you think, well, it’s, economy’s bad and there’s nothing I could do. You just guaranteed loss. You just guarantee they’re not going to win. And I’m here to encourage you and tell you that you need to change that. And if you already have it, do it even more, you have to have the belief that it will all just pass. All you’ll able to navigate through that storm. Another metaphor I could give you that can easily be understood is that you think yourself as if you’re a ship and the ocean, and there’s a storm and it can do you have two choices. You could say, I’m going to sink, or you could say, I’m going to get through it. And my opinion, if you believe you’re going to get through it, you can get through with you, but you set up your sales correctly.
Rem Oculee (12:02):
You have your crew aligned and you make things work and make it happen. So the key component is stay focused, stay focused on the objective. And what I’ll want you to do is start drawing a plan, but make it a simple plan. What is your ultimate outcome? When you want to get out of this entire COVID situation, pretend is going to end up say in six months, let’s say, I would say six months or a year. So you can have two plans plan a six months plan B as one year. What would you do? How would you handle it? What are the steps you need to take now? Who do you have to consult with? Right? Who do you have to talk to? Which parts of the exit mindset do you need to look into? Is it the product? Is it your infrastructure? Is it a conversation you’re having?
Rem Oculee (12:47):
And then put those three side-by-side and start writing things you could do to pivot, to change, to make things better, to navigate through the storm and have some contingency scenarios where if this is to happen or to get worse, what would I do here? What would I do there? And if you do that, you’re going to be able to get out of this as best as possible. The idea behind it, lots of times in business, you’re going to find that the concept is not necessarily getting out intact, but simply getting out. And if you get out, you pretty much achieved 90% of what he should be doing because the rest of it is easy. One problem with a ship that sinks you can’t take it out of zone. It’s stuff to bring it back up. But if the ship starts limping to port, you can always fix it at port. Your job is to get your ship to port. And go from there. Remember, action is everything. Use it or lose it. And we’ll see you in the next podcast.
Amber Giannone (13:39):
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