Just Getting Started? How to Apply the Exit Mindset to Your New Business – Episode 23 – Transcript
Rem Oculee: (00:06)
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.
Rem Oculee: (00:48)
But that’s not all, I also discovered the three principles that you must know to come at 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.
Rem Oculee: (01:30)
You’re probably asking yourself, I don’t have a business. How does this podcast going to be relevant for me? And I propose to you as an answer that is very relevant. And if you start your business the right way, there’s a saying, “Well begun, half done.” So if you begin right, you’re going to find a lot of the things that you’re looking to accomplish are going to line up perfectly. In this podcast, you will know what you need to get your entire business model built on the right track. From initial perspective, you will understand what you need to do and how are you going to do it. You will have the tools and the know-how as to where to begin. And once we’re done, you will feel that you have a direction to go with and a way to exercise your future in a manner that will create the things you’re looking for in your business model.
Rem Oculee: (02:22)
So what happens with a lot of people is that when they begin doing business, they’re really are all over the place. And ideas that, well, I have some idea. I got some product. I got… Let me go out and see if I could do few things to create a business model. And they not thinking in a streamlined manner about the three elements that’s combined the exit mindset, which is the product, the infrastructure, and the conversation. They usually more thinking along the lines is that if I put this together and that together. And by this and that, I mean, they might be thinking, well, if I get a location to sell and to hire a couple of people. And if we just do a little bit of advertising, I think it’s going to work out. That is most of the time indicates a small business. And believe it or not, sometimes larger businesses are that way too, where people just decide that this particular enterprise is going to work out. So, let’s just go ahead and get few things set up. And we’re going to go here and go from there.
Rem Oculee: (03:20)
And to me, that always represents the concept of a good idea and put your hand together and hopefully it works. And there is a reason why business requires experience sometimes. And people that start that way, end up with certain failures. They either correct and move forward or it creates sometimes catastrophic failure because they really haven’t begun the planning in a correct way. And I have a little bit of a problem with some of those planning softwares out there, because in my opinion, that’s some of the planning software models are too all over the place and they don’t really necessarily fit your particular situation. So they might talk about some of these things that we talk about, but then it’s 10 things you’ve got to figure.
Rem Oculee: (04:04)
Then from these 10 things, you branch out another 10 things. And from there, each one of those 10 things, another 10 things you’ve got to branch out too. And you going to make up this whole plan. And by the time you’re done with it, you can’t even look at it. So I will propose to you, it is neither you take a simplistic approach or you don’t actually do anything. And you’re thinking, you just go and let’s just see what happens. But neither do you go ahead and do a massive plan, which I still think you should do, but make that the only way you could do business. You got to be able to get a medium in here, some sort of a middle ground, where you’re actually thinking strategically and putting different parts together. But put in there from a perspective that is different than just a robotic plan that based on what somebody thought how it ought to be.
Rem Oculee: (04:47)
Because I’ll make you a bet that whoever created that model or a business plan, if they create it for themselves, it’s maybe for their own company. And in my experience over the years, I never seen two companies can be done the same way. Every company is very different, unique organism of its own. Then the other side of it could be somebody whose academic, who write a business plan structure for you. And lots of times, these people in academia or people that are just doing these things don’t have real business experience and they sort of gravitate to a test style material, which does not sometimes apply to real life. So again, I still think it’s a good idea for you to always outline what you want in some of those documents because things come up. But I’d recommend that your main approach would be using the exit mindset, which is the product, the infrastructure, and the conversation.
Rem Oculee: (05:39)
Once you line up these things correctly, you’re going to find that all issues are going to be resolved much more easily. And when you run into trouble, you can relate it to something. Lots of times, people are confused. They think a product problem is an infrastructure problem, or infrastructure problem is a product problem. They’re two different things. Sure, it all mixes together. Sure, the end of the day it blends. But you must be able to look at problems in. This is my infrastructure issue. Let me fix that. So, let’s make it very simple for you. If you’re just beginning, I’m a believer that small business is the backbone of this country and even the world. And if we don’t encourage and help small business grow, you’re going to find big corporations running the whole thing. Plus, lot of those big corporations are small businesses that actually grew to where they are today. So, I think you’re the beginning here.
Rem Oculee: (06:30)
So the first thing you want to do is take your product, understand your product. Make sure it has a valuable place in the market that it will help people, that it does what it’s supposed to do, that you have to believe in it. And start from there. Believe me when I tell you, we can talk a lot more about that and we can fill volumes of podcasts in here on this, but we’re going to take a step at a time. And by the way, if you are a person that has been in business for a long time, that’s a good point for you as well. What you want to do is also look at your product again. Is my product doing what it’s supposed to do? Is it creating value? Maybe it is, but maybe some things are not going very well here.
Rem Oculee: (07:11)
The second thing, take a look at your infrastructure. Trying to break it down if you’re just starting. And if you’re in business, also evaluate it. Do I have a location that is reasonable and feasible to work out? Do I have people to work with me? Do I have the finances and the funding to create that infrastructure? Lots of times the product itself could be very expensive to produce, which requires capital. And most people neglect how infrastructure could be very costly. You want to make sure that you align that up correctly. Last thing you need is sort of start and stop, touch and go. You want to have sustainability. So if you are about to begin or embark on a business venture, then what you want to do make sure that you have the right resources, the right amount of resources. Lot of people confuse that the price of the product that they can sell a product with the infrastructure issues.
Rem Oculee: (08:06)
I’m going to tell you exactly what that means. It’s very simple. You see that your product, for example, you do a calculation. So you say, my product could sell. And I’m just going to make this up. My product can sell for a $1000 per unit. So you go, wow, if I only sell 10 of those a month, I’d be done. So, the math is simple and you start overlooking all the infrastructure issues that you need to build. You forget about the facilities. You forget about the people. You forget about your insurance. You forget about your own particular needs. You forget about… Even if you have an employee in this particular, you just thought you have somebody working with, you forget about, you got to pay them. You got to forget all these things. That’s very normal. Don’t feel bad. You’re not unique.
Rem Oculee: (08:53)
It’s difficult when see you the product, you see the price, and you think this is it. In the majority of the cases, you’re going to spend lot of the money. But in the beginning, you got to spend it on the infrastructure, so you could grow. So be aware of that, be cognizant, and don’t try to play for the short-term. Play for the long-term, for the long haul. The third thing most people neglect is the impact of the conversation. Many cases you’re going to find that if you ignore the piece of conversation, which is how do you communicate your product to people, not just verbally, but non-verbally, and how does the market perceive your product. Again, if that’s all planned in the beginning, you are going to walk into the business model with eyes wide open. When you do that, you’re more prepared to deal with issues.
Rem Oculee: (09:39)
Now with the three principles that I tell you, product, infrastructure, and the conversation, there’s something that’s going to be constant that you never don’t ever forget. There always will be problems and issues. If you’re not ready to deal with problems and issues in business and all those three things, don’t do it. But my guess, if you’re listening to this podcast and you’re here now at this moment, then you made a commitment and you want to go forward. And if you are in business and you’re facing difficulties, then you know that. And if you’re in business and things are moving smoothly, you want to improve and you’ve seen it all. So ultimately, problems is part of the deal. Some of them are going to be small. Some of them are going to be large. The idea behind this is that you are aware, you’re attuned, you don’t break down, and do your best to navigate with solutions you could come up with.
Rem Oculee: (10:30)
Because let’s also face it, you’re in the business of solutions at the end of the day. So remember if you build your business on these three principles, you are going to end up with an optimal business model that will move forward, provided that you’re willing to put up with problems, create solutions. However, ultimately those three principles are based on exit mindset. Because even though you’re beginning, surprisingly, you’re already thinking about how it’s going to end. And that’s where the power the exit mindset is because it’ll keep you grounded. It’ll keep you real. It says that I’m already just starting right now. This is my product. This is my infrastructure. If I want to sell, if I am after five years or 10 years, any number you wish, could be 25 years, want to sell this, what should I be looking for in this model? And let’s say, you think your model right now is a company worth, I’m making up completely, say worth $10,000 company. It’s not worth anything. Okay.
Rem Oculee: (11:30)
You’re looking to make it, let’s say a $10 million company. And that’s your goal and dream in 10 years let’s say. Then when you start thinking about the product, the infrastructure, and the conversation, you’re building everything with an eye on that. That’s where your main focus is. What that’s going to do to you is that’s going to give you dual effect. Effect number one is going to allow you to see what you need to do now. Effect number two, it gives you the pace into go at to get to that target. Most people, I will say this to you, and I’ve seen this over and over again, they’re not thinking about that. I mean, we know I wrote the Exit Mindset because I saw people not thinking about the valuation, including myself at one point in time. And that was the main reason that I wrote the book. So I’m showing you what you shouldn’t be doing. I’m showing you the mistakes. If I was thinking differently, I would have avoided it. And here you are, I’m showing all the things that you need to know to make this better.
Rem Oculee: (12:31)
So adopt that thinking and think in that way and you’re going to find that everything you’re looking for is going to come to fruition. Don’t try to strive for perfection. Don’t try and be perfect because that’s the biggest mistake. I can’t tell you how many people I’ve seen also that trying to build their business and they want everything buttoned up. Everything has to be aligned. And the reality of it is doesn’t work that way. The more you align and make it out perfectly, I find that sometimes it works less perfectly than when you’re working and moving with whatever you got, it’s a little bit better. 80% good moving better than a 100% that is just sitting on the shelf being written. So, be careful with that and always focused on action. Remember, action is everything. Use it or lose it.
Speaker 2: (13:26)
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