The Art of Succession

Welcome to the Art of Succession podcast

with Barrett Young. Join us as we

explore the strategies, stories, and

insights that shape the journey of

leadership transitions and business

success. No matter where you find

yourself along the journey, this is the

podcast where you'll find the tools to

make it happen. There are ways to shift

our thinking from an like an income

revenue focus that a lot of small

business owners have to an asset focus.

There's lots and lots of opportunities.

Partnerships, you know, formalized

partnerships can be an asset. Your brand

can be an asset. Your obviously your

audience, right? That was a big piece of

the assets that I bought from the other

business. A productized service can

become an asset too if you're really

clear about um building it for the

intention of it being scalable.

My name is Barrett Young and this is the

Art of Succession podcast. My guest

today is Stephanie Hayes, exit

strategist and founder of Assets to

Exit. Stephanie's got a unique

perspective of starting with the end in

mind and using your exit plan to

determine your growth plan. and we're

going to get into that in today's

episode. Stephanie, welcome to the

artist succession.

Thanks so much for having me. Excited

for the conversation.

Um, my first question is going to be

what what brings you to the artist

succession today? What do you really

want to convey to the listeners from

your story or just your experience

working with businesses? Well, I think

the the sorry it's probably the biggest

thing is that whether you're in line for

succession or whether you are, you know,

considering your succession plan on your

way out, um I think a lot of people

don't get started soon enough. and

thinking about their exit strategy and

thinking what an exit strategy can do

for their business. Um, can put you in a

much better position in both

circumstances to build a much more

valuable business and either hand it off

in a much better position or what can

you do now to ensure that when you take

over that business is as healthy and um

profitable as possible?

Not getting started soon enough. What's

like the minimum in your mind?

It's sort it sort of depends on the

business because it depends on how long

it takes you to really start to

implement some change and what that

change is going to be. And so when I

work with my clients, they we look at

their exit strategy and how far out it

is and we figure out like what kind of

impact can we actually make in that time

period. And that's one of the

considerations. you know, if they're

three years out, then what can we what

where can we get the most bang for our

buck in terms of the the changes we want

to make, the growth that we want to

implement, and then we make decisions on

the strategy based on that. But if this

is somebody who says, you know what, 10

years from now, I think that's the time

that I'm going to exit out, what can we

do between now and then that that we

could, you know, take on much bigger

projects. We can take on bigger

initiatives, make bigger shifts. But if

you're sitting in front of me and you

say, "I got a year. I got a year for

whatever reason. We're going to choose

some much more um rapid growth

strategies, but I also think that you

have a little more risk and you also

have a little a few fewer options.

Mhm. Yeah. So, one year we're going to

do some very surface level kind of

changes. Three years we can make one

major shift and actually see it produce

fruit and everything like that. And then

ideally longer than that, we can tackle

some bigger projects.

That's right. Yeah.

Gotcha. Okay, cool. So, uh, let's get

into your background, your story. Uh,

just tell me a little bit about, uh,

your journey to this point, Stephanie.

Well, I was born No, I'm not going to go

that far back. Um, I I guess all of this

sort of, um, came to fruition maybe

five, six, seven years ago. Um, you

know, I'm I'm a business architect by

trade. You know, I I have a master's

degree in the management of technology.

I come from the technology sector. um

have always worked in startups and

worked consulting into large

organizations. So I had the nice balance

of the both. Um and you know I was I was

doing fun work and and working with um

small organizations, working with big

organizations, really focusing on

organizational design, business model

design, operating models, that sort of

thing. And I remember being down in um

Texas and at a little retreat with one

of my clients and we kind of did a day

of work on our own businesses and I was

looking at this wall kind of going, you

know, I've done all these things and

I've got all these experiences and I've

learned all these things and I've got

degrees up the yin-yang and blah blah

blah, but I don't feel like I'm building

something. like I don't feel like, you

know, I lost my house in my divorce and

so where could I find that kind of asset

again if I if it's prohibitive for me to

get into real estate again because I

live in one of the most expensive parts

of the world. So, you know, with housing

pricing being what they are, I just

couldn't see that in my near future.

Wasn't sure if that's what I wanted. And

what kind of came to me is is my value

and my skill set is in building

businesses. So why was I not looking at

that as an option? And then as I started

to think more and more about it, I

started to identify that there are ways

to shift our thinking from like an

income revenue focus that a lot of small

business owners have to asset an asset

focus. How can I look at my business and

see where I can build assets, where I

can build things that are going to have

longevity, that are going to be

interesting to someone who wants to

actually buy my business. And so that

shifted all of my thinking and it was a

huge revelation for a lot of the small

business owners that I was working with

because they they just didn't think that

way and they didn't think it was a

possibility for them. So that really

sort of started this this whole thing

for me and this whole growth for me and

I started looking at buying and selling

and renovating businesses. I started

looking at, you know, that whole

ecosystem and what that looked like and

I started talking to my clients about

building assets instead of just being

entirely focused on income. And it

really, you know, grew and it became a

really like resonant conversation with

um all of my clients, with my audience,

and then just kind of grew from there.

And I bought my first business. Um I own

several businesses. I own a software

company. I own a consulting company. I

own now a business that I bought a

couple of years ago. And so I really

wanted to eat my own dog food. I wanted

to be the buyer and I wanted to be the

seller and I I'm were currently selling

my software company as we speak right

now. So going through that process, but

I had been working with clients with

whom I was an adviser while they go

through a sale. And so the whole process

was kind of eating my brain and really

interesting to me. And I really wanted

to introduce this this new thinking for

small business owners that they could

build assets that grow over time that

they could um have and it really changed

their outlook. It changed their

perspective and they it gave them

something almost like a renewed energy

in their business because when all they

could think about was do I just do this

until I'm done until I'm burned out and

I just shut my business down. I'm like

no no no you built all this stuff in

your business that's going to be worth

something. Let's figure out what that is

and build on that. So you can plan to

have an exit to do whether it's an

operational exit taking yourself out of

the business but keeping ownership or

whether it's you know some other type of

exit or just like a real traditional

sale. There's a market for all sorts of

different types of businesses and all

sorts of different sizes of business. So

that like I've bought a $500 business,

right? like you can there's market there

are marketplaces for every type and

every size and and that's what I think I

really wanted people to start realizing

because it gave them this completely new

perspective on their business.

So what kind of business were you in at

the time with that client meeting in

Texas? You were in one that you had

started and how long had you been

running it?

Yeah. No, I was um I was a a strategist,

a coach, and I was working with small

business owners and that's what I've

been doing for the last sort of 12-1 15

years and I still do consulting work

into large organizations as well. So,

I've got I got my fingers in a lot of

different pies and I still own my

software company and then you know

bought the that one that was actually

the client that I bought that business

from uh which was not at that time on

the on the table but down the road I

eventually bought it from her. So, um,

I've always in the last sort of 15 years

been acting more as an adviser and a

strategist to my clients who were small

business owners,

but the the company or the the

consulting that you were doing at the

time was providing a living for you had

enough revenue. So, what was it about

what was that aha moment there that was

like all I have is revenue here. I don't

have an asset. Like what what went

through your head? And because I don't

think people know the difference. Um,

and we'll get into that shortly in this

episode, but what was that?

You not probably not knowing the

difference at the time either. What was

that click for you?

Well, I I sort of did and I sort of but

but I hadn't really thought about it

that way. But, you know, in a

service-based business, all you're doing

is you're chasing revenue, right? Like,

as soon as as soon as a client ends or

you finish work with a client, you're

back to zero, right? So that hamster

wheel is what a lot of people are

talking about in service-based

businesses is like this exhaustion and

you know I'm not building anything. You

know I'm just you know it's it's kind of

like this long process of the same thing

over and over again and that gets

exhausting after a while. So at this

point in time um my partner and I when

we work with clients they come to us and

that's the the words they use every

single time. I'm just burnt out. I I I

want to burn it all down. I'm just burnt

out because they don't have the vision

for what the future looks like for them.

They don't have a plan. They're just

kind of continuing to do the same thing.

Whether it's a service- based business

or it's a, you know, a clinic in person

or whether it's a, you know, a product

based business, you know, they they

without that sort of definition of where

they're going. And it's it's actually

quite shocking to me how many people

don't have that, right? They haven't

really thought it through. they haven't

given a lot of because they don't really

think about it until they have to and

unfortunately a lot of these business

owners will just kind of go well I don't

think that's an option for me and so I'm

just going to shut it down and they've

got all this all these assets the study

was what does a this is where I kind of

went with this I said what what would a

buyer buy like what would a buyer value

in a business and so we I created this

this guide for like nine types of assets

you can build inside your business that

were all correlated to a buyer going

through a you know a memorandum and

going through a an acquisition and

assessing a business that they want to

buy and all the things that they would

consider valuable because when you go

through evaluation especially if you do

something like a SDE it's not just the

numbers right it's not like you can get

do the numbers very quickly but there's

a whole other exercise that you go

through when you're valuing a business

around that you do all of the risk

adjustments and look for all of the the

like the sort of qual qualitative

information about a business and inside

that part of a valuation is just gold

because if you want to grow your

business

look do that valuation right now and

look at where you have all the gaps. If

you adjust for those risks if you create

a growth strategy that's going to plug

those holes inside your valuation you

could double your valuation. you could

like why would you not spend your time

and your effort and your resources

making your business more valuable for a

buyer at the end of that cycle.

Yeah. And the answer is not necessarily

more clients or higher topline revenue

or anything like that. It's just

right

separating yourself especially in a

service business you are the hours that

you bill. So many service providers

think of that. And so if I want to

double my business I need to hire

another CPA so that I can bill out twice

as many hours. there are so many other

options

when the CPA retires and it's like

trusting somebody's going to be able to

pick up where you left off and there's

going to be value there. But so much of

that is relationship and tangible stuff

that's not just the hours that you're

billing there and it could dis it can

dissolve. Uh and that's why service

businesses can be so risky. Um

so what was what was the first thing

that you implemented? I mean, yes, I

know you've bought companies since then,

but with that company and and just the

changes that you wanted to make to that

company, what was your first like aha,

if I do this uh kind of step to take?

Well, the very first thing I did was was

create that assessment of what are all

the different types of assets that I can

build build inside my business because

that gives me a blueprint to look inside

my business. And I've got a whole like

asset inventory program that I do. But I

started to think about what my clients

would need to shift their thinking from

and do their own assessment inside their

business and and what they end up doing

is readjusting their business model. So

I created a program where I would would

take my clients through that and

indoctrinate them in this new way of

thinking and then help them help them

figure out what is inside their business

that could be valuable. And I've got

people in my program now that have been

there from day one, you know, a few

years back because they just they

haven't heard this anywhere else and

when and they've totally shifted their

business models. They've totally and

they ask themselves this question about

every decision that they make. Is this

contributing to my business as an asset

or is this just perpetuating my

continual, you know, revenue cycle? So

the first very first thing I did was

come up with an offering for my clients.

But inside my own b my own businesses um

you know I have a software product

company so that's already kind of an

asset products are you know pretty

pretty well developed already uh but

inside the coaching business the

strategy you know the consulting

business um I started to really think

about productizing my services and

coming up with um something that could

eventually be sold as an asset when I

purchased the business I purchased a

couple of years ago I actually bought

the assets of the business as opposed to

the full entity. So that just sort of

created a whole other, you know, realm

of possibility for me. What could I

build that were assets that somebody

might want to buy? And now I just think

about that in terms of everything that I

build inside my business and how can I

make it um depersonalized as well as um

packaged up with a a value proposition

that someone might acquire at some point

in time.

Yeah, I think that's huge for service

providers. Um because

what the first step that you did was

say, okay, well, if I were to teach

somebody else how to do this effectively

by identifying those nine assets within

a business, you're systematizing, you're

productizing what you would coach

somebody through. And now there's

something here that stands alone apart

from you being in the room with that

client, you being the one to walk them

through that. Um, every service

professional has differentiating

decisions, things that they do that are

different than another tax repair,

another financial advisor, something

like that. Getting away from that, now

you've got an intangible asset. I I

think it's hard for us, for us service

providers to think of assets because

we're like, I don't have assets. I mean,

what somebody's going to buy my laptop?

No, that's not what we're talking about

here. No, that's where the creative

thinking sort of comes in, right? So,

let's say um I run an agency for content

creation for, you know, B2B tech

companies, right? And um and I have all

this stuff that I've created just to run

my own business. Well, package that up.

that becomes a really valuable resource

to another agency owner who wants to

improve their own operations and you

know blah blah blah. So like that's an

asset inside your business that you

created for the purposes of running your

own business. But there's no reason you

couldn't and actually this is what we've

done with one of my clients is we took

all of that great stuff that she had

because it was one of her strengths and

she's pulled that together to be an

asset for another agency owner who might

want to use her framework or use her and

license that out. Right? That's a really

great opportunity that people just don't

see. So there's, you know, there's

creative work that we've done. We create

lots of stuff for marketing purposes.

And I bet you you could create curate a

lot of that creative work and sell that

off as a product, right? So those are

like little examples, but if you start

thinking along those lines and you look

inside of a large organization, there's

lots and lots of opportunities.

Partnerships, you know, formalized

partnerships can be an asset. Um, your

brand can be an asset. your obviously

your audience, right? That was a big

piece of the assets that I bought from

the other business was their audience

and obviously the content and the the

products as well. Um, you know, I'm not

going to think of all of them right now,

but that license that licensable IP

would be another asset. Like there's

just and then you need someone who can

sit with you and think creatively about

how you actually implement that, how you

actually leverage that in creative ways,

understanding the business that you're

in. Sometimes, you know, we'll do

evaluation and we look at all the

opportunities and, you know, you see in

this particular client that one of their

big risks is that they lack

diversification inside of their revenue

channels.

But the client just

does not want to, you know, take on that

the strategy to like that's just not

something that's aligned with who they

are as a business owner. So sometimes

that's you know you choose another way

to sort of figure out that how you know

close that gap. So there's so much more

nuance to this than just you know

picking something out of a hat and

saying oh there's an asset right but

there's you know there's but the the

whole thinking to begin with changes the

way people make decisions and changes

the way that they build their strategy.

Okay. Um can we get into some of the

nine assets? Well, I think I just did

five of them, but yes, we can totally.

Yeah. What were those? What were those

specifically?

So, let's see if I can get them all. Um,

so clearly a product, right? And you

know, a product that you've created that

is truly a product, that's obviously an

asset. Um, a productized service can

become an asset, too, if you're really

clear about um building it for the

intention of it being scalable, right?

that um if you're going to scale, if

you're going to create a service as an

asset, it has to be a productized

service that someone else can take on

and that you you know it's not dependent

on you. Um your creative work is an

asset. So all of the stuff you create

for your marketing, all of the things

that you know, all this that you're

creating bear for your podcast, those

are assets, right?

um your audience. So if you have a

subscriber list, if you have a client

list, if you have, you know, anybody

who's in your audience in your

community, if you have a big community

of people, those are all an asset

because they're eyeballs. Um recurring

revenue like recurring subscriptions or

or you know, retainer clients, that kind

of thing. Those are all assets that

somebody would value if they were buying

your business. IP, you've got to build a

framework. You've got referenceable IP.

This one I think is one of the biggest

areas for growth because there's so many

people who have created like their own

little approach to doing something but

if you think about ways to make that

much bigger maybe you um you're training

other professionals or maybe you are

creating like a white label program like

there's lots of stuff you can do with um

that kind of IP if you have investments

in your business that's pretty straight

up like that's just clearly cash and or

maybe you uh I come from the.com

era where we got paid in shares uh state

uh options, you know, like that kind of

stuff. Hopefully, it's a little bit

better now, but you might you might have

done work with in partnership with

somebody and you own shares in another

company. Who knows, right? You so

there's a possibility of having

investments inside your business. Um

sorry, uh partnerships, formalized

partnerships, those are uh those could

be considered assets inside your

business,

like government contracts, things like

that. Um, I would call that more like a

a recurring contract, but partnerships

where you have um referral partnerships

or you have formalized marketing

partnerships or you have, you know,

formalized reselling partnerships,

things like that. Like those are those

are assets inside your business as well.

Um,

see if I can think of the rest of them.

There's two more. No, there's one more.

There's one more. That's one that I'm

missing.

To eight. Yeah.

Yeah. There's one that I'm missing and

I'll probably think of it halfway

through the rest of the episode. But

yeah, but you get the idea. Like there

and when you start to talk about these

things, people get inspiration because

they'll always come to me and they'll be

like, "Well, we don't really have any

assets." Like they think about property,

plant, and equipment, right? Like, you

know, um, and I guess, you know, a piece

of real estate, if you got real estate,

well, clearly that's an investment and

that's a, you know, an asset inside your

business. But I'm talking about the

things that people don't see, right?

they don't they don't necessarily think

about these things. And so when they

start to think about them they you know

then the question is what can you do

with those to grow all of the

possibility for you know value inside

the business. And those are that's

growth in a way that is not the same as

of course you know if you can grow

revenue and you can grow profitability

that's always going to help your

valuation. But here are the other ways

that you can make that the perception of

the business and the structure of the

business much more valuable.

Yeah. And you know a service provider

surface level will say I don't have any

of that like you said but now you've

just listed out nine and every single

one of us should be thinking about all

nine of these areas within our company

right because we all have a client list.

We all have a specific way of marketing.

We all have a software that we use. You

know, those are some of those channels

that you're talking here. What you're

saying, especially with starting with

the end in mind, is you're going to have

a valuation that's going to be

intangible through the goodwill. If you

have no assets like physical equipment,

and somebody buys your company, like you

said, for $500, you bought a company,

that's a value placed on an intangible

thing, the client list in that in that

case, I think it was.

So knowing that how can we now with the

end in mind increase the value of that

before we get the final valuation and

put that so that that's kind you're

systematizing

the increasing of the intangibles in

preparation of an eventual exit

which which

then affect the tangibles right like

they they will affect cash they will

affect profitability like you know part

Part of this too, I'm just thinking of

that same client. Part of part of her

risk was that she had she had a tidy

little business. Like it was good, but

looking at the valuation, we could have

done a lot more with some

diversification, but also increasing her

profitability. So, I wouldn't say her

profitability was bad, but she was so

dependent on ads,

like almost entirely dependent on ads

that, you know, she would spend $30,000

a month on ads to get like so to me

that's risk and it's it I know that we

could find channels that were not dep

like marketing channels that were not

dependent on ads. So, we spent a lot of

time focusing on building out

partnerships and building out

collaborations and building out other

channels that were not dependent on ads.

Keep using the ads, right? Like, keep

keep we're not saying get rid of them,

but in addition to what has been sort of

working for you. And by the way, ads are

really up and down, right? Like you

can't necessarily, they found that some

months would be, you know, totally

predictable and some months would not.

So from a buyer's perspective, we want

to see a little bit more stability

there. So we were working to increase

that um profitability by introducing new

uh marketing channels, new acquisition

channels that didn't require an

investment upfront.

I mean, that's a good point about the

ads. It's no different than trading

billable time for revenue. It's like,

well, if you stop doing the 30,000

monthly, right, in ads, how much of that

is going to still continue on? And

that's the value there.

Y for her it was very little because she

was completely dependent on them.

But but it's a good point that these

things will filter through the

profitability of your company because

you can't just say, "Well, my client

list is worth $300,000 if you can't

prove through the revenue that comes

through and the profitability, the the

tangibles that come from this

intangible."

Yeah. And

that's I mean

that's what valuation is. It's looking

at a tangible number and saying I can't

prove where this number comes from. So

it's intangible, you know, what's it

suggested for risk and all that stuff.

This is

and it's still going to be subjective

when you get to the the point of making

a transaction because you know what one

person values over another buyer is

going to be a little bit different and

how comfortable they are looking at that

business and saying I know what I can do

with this. Um, and so the more that we

can prove and the more that we can make

that buyer's understanding of the

business much clearer, you're going to

be in a much better position to get an

offer that is closer to what you're

looking for.

What were you consulting clients on

before this realization within your own

company? And how did it shift to where

you are today?

It was still business model design. It

was business strategy. It was. And so

here's what is so cool about this about

adding this sort of layer on. I'm still

doing business architecture. I still do

business growth. I still do the same

work, but now that I have this sort of

perspective on it and the the context is

different, um it's much more valuable.

So back then, you know,

I felt pretty good about strategy, but I

I could never anchor it in anything,

right? Like we were always making our

best guess based on numbers, based on

past experience. But once I had this

this sort of last piece of the puzzle,

now I could like definitively say, here

are the numbers, here's what we want to

work towards, now I know what we need to

do because we've got a specific goal in

mind. Whereas a lot of business owners

just don't have that sort of they kind

of say, "Well, I'd like to make a

million dollars

doing what? How?" Right? Like we could

do that a number of different ways.

Go out and hire somebody that is going

to cost you to run ads for you,000 and

we can pocket the 50,000,

right? And like what kind of business do

you want to build? Do you want to build

a business where you make a million

dollars, but you keep $100,000 of it

because you've run ads that get you

hundred, you know, $900,000 worth of

revenue and it's just not a profitable

business? Like what? That's still a

viable business model, but it just looks

very different in terms of what you keep

than if it was something else, right?

So, there's so much that goes into this

and so much that you have to consider

about the person as well and what they

want. But this what I what I found was

this just was sort of like the end cap.

We were able now to figure out what a

strategy was based on where they wanted

to end up. Whereas before it was just

kind of like, well, I just want to

increase my revenue.

Okay. Well, there's lots of different

ways to do that. We're going to take our

best guess. But now I have something to

definitively work towards. And I think

that changed the nature of the work that

I do. I'm still backing into growth

strategy. we're still doing, you know,

some some people there's sort of three

paths that people come to us with. They

always come and they say, "I need to

sell my business." So, either they're

like, "Yeah, I'm just I'm done. I'm

ready. Let's just sell." So, in that

case, you know, we work with our

partners and we help advise them to get

them through that transaction. And we'll

introduce them to our private equity

partners. We'll introduce them to

business brokers. We will be their

adviser. Like if that's really where

you're at that you're just ready to go,

fine. But mostly what happens is folks

come to us and they say, "I'm just

burned out. I I want to burn my business

down. Like I I need to sell it. I need

to get rid of it."

They're either um they want that end

goal in mind, but they don't know how to

get there. And they don't know what that

looks like. And and so they're the ones

who are going to have sort of 3, five,

seven years to get there, but they're

fine with that. and they they want to

work on building the value over time. So

that's what the work that we do with

them. But some of them actually don't

want to sell their business. They don't

want to move out of their business. They

just

they're done, right? Like they just And

so we do business model design with

those guys. Like we change the we change

the the nature of the business, the role

that they have in their business. Like

that's the whole business architecture

piece which is really fun. And of course

a growth strategy. So people land in

these like in that sort of first

category there's also the people that

are just being forced into an exit you

know health health issues or some other

catastrophic external event or whatever

right but I would say those three paths

are the primary path that most people

are on and depending on which where they

are at and what they actually need and

you know I was talking to a lady the

other day and she's just like just I

just need to get rid of I'm so sick of

it blah blah blah what she was sick was

the role she was playing inside her

business, but she really liked what she

had built. Right. So now our job is to

figure out what her growth strategy is

and how she moves herself out of that

role inside her business.

Yeah. I was actually just having this

conversation with a buddy today who

said, you know, we're they're taking

steps to make their company more

attractive to an outside buyer. And I'm

like, it's kind of like selling a house.

Yeah.

You get your house ready to to put on

the market and then you're like, wow,

why didn't I do this earlier? I like the

I like the features we've added to the

house now and I don't necessarily want

to sell. And so that's that project can

benefit the the

business owner that doesn't

doesn't want to get out.

It's a totally valid analogy and I'll

tell you two two reasons why. Um,

I forgot to mention this, but one of the

the the key experiences I had that

really got me into this was at that same

time we came across a um a couple down

in Australia who were their big business

was teaching people who had come from

the real estate development world how to

buy, renovate, and sell these little

like these little $500 businesses. And

you like it's a website, right? You can

buy a little website that some guy in

Pakistan has built up traffic to this

little website and then you buy it. You

do a whole bunch of work on it and you

increase the value of it and you

renovate it and then you sell it for

$6,000 and then someone picks it up for

$6,000, does a whole bunch of other work

on it and sells it for $12,000 and so on

and so forth, right? M so they saw the

potential for real estate people who

flip houses to understand that whole

model is very much the same. Now my

partner and I are building out my

business model because she comes from

another perspective and so the two of us

are doing this work together with our um

with our clients and she used to own a

real estate development company and

she's like Stephanie this whole business

model is exactly the same as my real

estate development company. I'm like,

"Yep, yeah, it makes a lot of sense.

We're just renovating different types of

assets."

The company that you've got with the

partner now, was that a se is that a

separate company that you

that you started that you acquired? Uh,

talk to me about that company.

Yeah, it will become a new entity.

Okay.

Um, right now we're in early stages

because we we've been working together

for a long time and then we just kind of

went, you know what, why are we not

doing this together? because we both

believe so much in the model. I had

already done so much thinking about the

business model. I was building it myself

and then when we started having these

conversations, I'm like, "This is

crazy." Like, we're so much more

powerful together and she's got lots of

great connections on the private equity

side. And so now we get to build this

much bigger entity which is going to see

us building an investment fund for other

women to invest in for us to actually be

the ones that acquire some of these

businesses. build that whole model for

renovation and then sell. So like this

is becoming something much bigger than

what I had originally been building and

you know maybe would have gotten there

over time but without the partnership it

would have taken me a lot a lot longer

to get there. So this is kind of

exciting. We're testing it out right now

as partners and then probably going to

probably going to um stand up a new

entity when that uh gets borne out.

Gotcha. Okay. So, it's a different

purpose then for this one than than what

you had been doing in the consulting and

you actually

very similar. Yeah. Very similar. It's

just you know growing. It's it's a lot

the scope is bigger.

Gotcha.

Yeah.

Um

had you already discovered

buy then build at this at the point of

this aha moment to you? Talk talk to me

about Walt Walker and how he fits in

with all this.

I only discovered Walker Dable's book

last year.

Okay. About the same time.

Yeah. And I started listening to it and

I was like, "Oh, right." So, there's a

lot of value in understanding from the

buy side, right? So, he's in part of

this world like Cody Sanchez and others

around the investor

sort of perspective. And I was actually

working with a a private equity partner

for a while who was trying to build a

whole community for investorreneurs. Um

but Walker's whole perspective is on,

you know, rather than start up a new

business, just go acquire one that has

been and he's got lots of great, you

know, ideas around how you can do that

with low capital down, etc., etc. But

when you look at and understand the

buyer's perspective,

that really helps you advise your

clients on the sell perspective, right?

So, I want to be able to to represent,

not necessarily from a formalized

perspective, but I want to know what to

advise my clients on based on

understanding the buyer's perspective as

well. So he's got lots of great stuff

inside his book um that helps me make

decisions for my clients on what they do

on the sell side.

Okay. So his book is even beneficial for

your clients who already started their

cl their business just because it is

from the perspective of if you're going

to buy a business and build build on top

of it. This is what you should be

looking for and you're going into these

businesses and saying this is what this

type of buyer is looking for. So let's

let's put that in place here.

Yeah. And as someone who wants to also

be an investor prneur, I don't know how

much you like that that term, but for

lack of a better one, for somebody who

also has that, you know, perspective,

his book was great, right? Like his

community is great, his book is great,

his he's got other stuff and things that

are valuable. So yeah, the whole the

whole space is is super interesting to

me. With your experience and where

you're at right now with your clients

and everything, when would you advise

somebody to go out on their own and

build something from scratch versus

buying? Or do you think buying is always

the answer? I know it's never going to

be always the answer, but how do you

weigh that in in a certain situation? Do

you ever have a client where you are

like, "No, it probably would be better

for you to just burn this thing down to

the ground and start over or not not

invest another seven years into turning

this around, but let's sell this for

what it is and and go do something

else."

Yep. I did have a client like that. And

she was it was more a matter of

circumstance and kind of where she was

at. And she had just gotten to the point

where she was like, "I'm done. I'm just

done." And so, you know, and and she had

also gotten herself in a bit of a messy

situation with a partner and so she

ended up selling to the partner, but it

was a long and drawn out like I was with

her the whole step of the way with every

conversation and the brokers and yeah,

it was not going to end well and it has

still hasn't ended well years later. Um,

so she didn't have any other options.

Like she had already gotten herself

committed with this partner and so we

just had to find the most elegant way

out. Um, but I would say in terms of

like just start something up on your

own, of course there's a like I I grew

up in the dotcom era, right? Like it was

just hyper startup and my job in my you

know I was in my mid20s. My job was to

be incubating little businesses inside

of a a parent company. And so we were in

these sort of hyper startup

um phases all the time and building from

scratch. I think when you've got money,

when you've got investment, when you

have like that path already drawn out

for you,

yeah, I think there's a great

opportunity there to if you've got a

very innovative

idea, something that's new, that's

appropriate and it can be really fun,

but it's a hard slog. I was an

entrepreneur mentor at at the university

here and working with people who are

coming out of academia and had these

very you know green field ideas and you

don't you that's all you could do right

then is develop it right so in that

respect yes startup is I did a lot of

work in the startup world and it's hard

right it's hard but if you got if you

have the backing of the university's

investment fund and you've got some

money behind you like go for it, right?

You're you're testing your ideas. But if

you just want to become an entrepreneur,

go buy something like go buy something

that already exists because you've got a

whole bunch of information about it

already and and even if it's not doing

so well, you at least know what needs to

be done, right? And you can and you

don't have to go through all the growing

pains of building a brand and yada yada

yada, right? So yeah, if if your goal is

to just own a business, go buy

something.

Because even if it's not doing so well,

it's probably going to at least be a

year, maybe two years head start on

going out on your own and starting that

same thing from scratch.

You be a lot more focused in the work

that you do to to get it there, right?

And especially if you can find a

business in an area that you know a lot

about or what have you, like there's

lots of options.

Yeah. I mean just to share some of my

personal story, I went out and started

my own accounting firm in 2012 and I ran

that for five and a half years and

realized I was not I did not enjoy all

the aspects of building that company

from scratch that I thought I was going

to enjoy. And so in 2017 reached out to

a mentor of mine and ended up closing

that company and joining up with her.

And over here, I'm able to focus on the

areas that I like because there's

already systems and there's already

employees and there's strengths to build

all that other stuff. And so for me,

that's what really hit me with uh with

buy then build was I don't have to solve

a 100% of the problems from day one. I

can focus on the ones that I really

enjoy and these are operating over here

fine. And once I can shift my focus over

there and fix those then but it's not

like from day one I have to all have all

this figured out. So that's

that that really resonated with me. Um

I I wanted to shift now to succession

planning. So we're talking here maybe

familial relationship. We're talking

mentor and a mentee or somebody that

taught me everything I know about this

profession.

What benefit is there to this approach

that you take with businesses when the

idea of increasing evaluation can often

be contentious where it's like the

parent generation is going to get their

buyout and then screw over the next

generation coming in. So what would you

advise for that?

Yeah. Well, I can't I can't pretend to

have enough experience with uh familial

buyouts to and to know how often that

occurs that there is uh contention, but

you know, at the end of the day, it's in

the best interest of both parties to be

able to build the valuation of the

business. And so, you know, if I want to

put my polyiana hat on and be, you know,

expect the best from everybody, you

know, I would say that if you're if you

are the one leaving, you know, looking

for your your long-term exit, there's a

lot of benefit in you building out the

value of the business now in

anticipation of that exit because you

get a a bigger chunk of the puzzle or

the pie, right? Whereas, if you are the

person who is leading in, who is the

successy, I guess, is that the right

word? successor

successor.

Um, then building, you know, what I'm

assuming you're part of the business

right now. Why would you not be doing

everything you can to increase the value

of that business so that by the time you

take it over, you've got a bigger share

of the pie as well. So, you know, I I

guess I guess it happens where, you

know, folks are have different reasons

and different agendas, but in from my

perspective, I think at the end of the

day, it makes sense for both parties to

be trying to drive up the value of the

business.

Yeah. And when that's when that buyout

is based on an actual valuation, there's

proof that that's proof, right? or it's

been proven that this is because this

system is in place and we and we'll pay

for it in the long term. So, I think

that's a going to be a lot more

understandable from the buyer's

perspective than just mom and dad said

this is the price. I don't know where

that price came from, but I guess that's

what I got to live with. And so, in that

case, it would be like no, I don't want

to increase that price.

I guess so. And I guess that's the stuff

of TV shows or maybe it's reality, but

you know, I would love to be taking on a

business that was doing well, right?

Yep.

Yeah.

I mean, then that's the that's the idea

behind the nine assets within a business

is these assets are generating revenue.

Yeah.

And so you're buying these assets.

You're not just buying a figure because

the predecessor, mom and dad, said this

is what it is. You're buying an asset

that's going to provide for your family.

And that's going to be an asset still

that you're going to improve upon to

sell to somebody else in the future,

too. You're not just going to get stuck

holding the bag on this thing.

Yeah. I think it's the short-term

thinking versus the longer term thinking

that while you have somebody available

to you who you know has been maybe

started up this business many many years

ago or has been in this business for a

really long time that's an asset for you

to you know eventually improve that

business over time so that it's better

for you to take over in the long run. So

use those people while they're there for

the growth as opposed to, you know,

letting it stagnate until it's your

turn.

Mhm. Okay. Um, going back to the house

analogy, you fix up your house, you were

going to put it on the market, you

decide to stay there now.

Um,

make a case for selling the house. So,

you've gone in, you've improved the

business, you don't have anything urgent

telling you to get out. What do you talk

clients through to help weigh the the

pros and cons of is now the time to sell

the company or should you stick it out

for another three more years and

increase the value even more?

One of the things that I do with my

clients is post exit planning, right?

So, what is it that you want and what is

it that you want from the business? So,

you know, great example, this lady that

um I just met with recently, she's

actually a client of my partners, and

she has, you know, gotten to this I just

need to sell it and get rid of it stage.

And as I sat and I listened to her, I

realized she doesn't want to sell and

get rid of it. Like, she thinks she

does, but she doesn't. What she really

wants is a different role inside of her

her business. And until we have defined

that role for her and defined her

pathway, the pathway she wants to be on

would actually be would would benefit

the business she has right now. And the

business she has right now could drive

that pathway that she wants to be on. So

rather than get rid of this part of the

business that she's she just doesn't

want to do anymore, let's get you moving

into that new role and let this business

support that and drive that and you've

got a team in place who can operate this

business. So you just need to stop being

part of it. Like you just need to stop

meddling because you have nothing else

to do, right? So, you know, it was very

clear to me that she really didn't want

to be exiting. What she wanted to do was

build something new that was related.

That was sort of the next evolution for

her and she could continue to benefit

from this piece and, you know, every now

and then be the sort of figurehead that

comes in and does something and that's

very satisfying for her. but she was

getting back into the nitty-gritty

operations because she wanted to feel

like she was valuable inside the

business, but all it did was sort of

throw off her team.

So, for her, the advice was don't sell,

but know what you want, what you're

moving towards, and maybe 10 years down

the road, sell, but let's do all this

work on the business first because

there's so much potential still in

there. And why don't you benefit from

that? Well, building this thing that's

actually going to keep you really

excited.

So, it's so much more. It's so much

about understanding the person,

understanding the owner, understanding

their goals, who they are as an

individual, and where they're going to

put their energy. Cuz I could give you a

strategy that makes sense on paper, but

if you hate it, and it's not aligned

with who you are as an individual, as a

business owner, you're not going to put

any any energy into it. you're not going

to it's not going to be successful,

right? So, it's it's part of the value

that we bring is being able to see these

things in these people because we're

still people. We're still human beings.

We're still individuals that own

businesses and that these matter to us,

right? The only time I've seen that sort

of not play out is in the whole like

Silicon Valley techro like pump and dump

sort of build a little build a VC funded

you know mass exit kind of deal and then

there's a little less of the emotion

inside of there but for the most part

all these business owners are human

beings and they all have desires and we

it be we wouldn't be doing our jobs if

all we did was play from a playbook that

said, "Oh, in this circumstance, always

sell your business." It's not true.

And I I'd imagine that postexit planning

also then helps it makes it easier for

that seller to separate themselves from

their business too because you've

achieved XYZ. You said you wanted to go

on and do this. Yeah.

Is this still

where you are mentally? It's a massive

problem when people when business owners

get out of their business those first

sort of 6 months and they just like they

feel like they've lost all of their

contribution. They feel like they don't

they're not doing anything valuable.

They have all this regret and remorse.

But if we do the work to figure out what

what's next for them, again, all

different people. So for some people,

they're they want to be like, "No, I'm

piecing out. I'm just going to sit on a

beach and wherever and don't talk to me.

Like I don't want to hear anything about

it. I'm done. Whereas some other people

are like, I need to be busy and

contributing. So maybe they have a more

transitional role out and they, you

know, do a period of time where they're

really just an advisor or they no longer

own the business, but they can still be

on the board or like, you know, who who

knows? And for some people, they want to

dive right into another project and that

keeps them on another path where they

feel valuable and like they're

contributing. So whatever that is for

that particular person, it's such an

important conversation to have before

you sell because then you get really

focused on I've seen people sabotage a

sale because they couldn't get their

head around losing their baby, right?

Like they it made them it gave them such

a sense of purpose, right? So we have to

do that work with a lot of the business

owners because otherwise it can be a

very emotional and difficult exercise

and it can really affect the transaction

at the end of the day.

Yeah, that's good stuff. Um Stephanie,

was there anything that I haven't

touched on or that you wanted to share

that um we haven't a direction we

haven't headed yet?

I don't know. We've talked about a lot

of stuff. Um, I think, you know, there's

always more to talk about,

but I would just say like this is a

whole new, you know, way of thinking for

a lot of business owners and, you know,

thinking about your business as having

longevity and having value is is

something new for them. But it really,

really shifts your whole perspective and

your energy around your business. And I

would say it's really worth having the

conversation.

Yeah. Is it ever too late

to to

find purpose and to increase the value

of your business.

No,

I mean, we we joke that, you know, six

months, it's kind of like uh there's not

much you're going to be able to do

there, but I was just Oh, I see what

you're saying.

Yeah. Go ahead.

Yeah. If like if your timeline is like

I'm going to sell in three months, well,

you're just going to get what you get,

right? Like there's it would be it would

be very hard to make a substantial

change in what you would be valued at,

right, at that point in time. So, in

that sense, it it can be too late to

change the valuation of what you're

selling for. But is it ever too late to

start thinking about this stuff? No. No,

I don't think so. I think there's

possibility like I don't I look at a a

business as a like a canvas, right? As

an art canvas. And there are lots and

lots of things you can do with a

business. It just, you know, all comes

down to who's running it, goals, um,

what they want, what they're willing to

do, like all that kind of stuff. So, um,

yeah, I don't I don't think it's ever

too late to start thinking this way.

Okay. All right. Great.

All right. Are you ready for a lightning

round as we wrap up our

Okay, let's go.

All right. Uh, coffee or tea. And how do

you like it?

Uh, now it's tea. It used to be coffee.

Coffee. coffee, but I have um become

very sensitive to caffeine. So, there's

still caffeine and tea, but uh I like

tea with honey and cream.

Okay. Right. Um pie or cake? And do you

have a specific kind you like?

Pie. I like pie. I love pastry.

Anything. Anything pastry?

Flaky.

Flaky. Yeah, I guess that's me. Flaky,

right? Anything with pastry. And if it's

a type of pie, I would say probably like

a peach pie or maybe like a berry pie.

Okay. All right. Um, what is a common

belief among entrepreneurs that you

would want to challenge?

Um, that you are going to arrive at a

destination. So, a lot of people are

always waiting to get to a a place and

then they're always like perpetually

disappointed in themselves cuz they

haven't gotten to that place, but if

they really look back, they probably

surpassed it, right? Like they they feel

like they're going to get somewhere and

it's just going to be stable and they're

going to like nothing's going to change.

And I think if you've gotten to that

place, you've actually failed. So that

as soon as people start to just accept

that entrepreneurship is a is a

continuum and it's like an a constant

evolution, then you become a lot more

comfortable and you can see the

creativity in that.

Yeah. I like to joke that

entrepreneurship is a search for better

problems

be because we're never going to make the

problems go away. We're just going to

move on from the problems that we had in

year one. you know, year seven problems

are going to look different than year

than year five problems were. They're

sometimes going to even be harder to

deal with. But

problems aren't really a problem, right?

Like they're they're shining a light and

an opportunity.

It's it's an opportunity. It's a chance

for us to be creative to do, you know,

solving problems is what actually keeps

us engaged and alive in the in the

business, too. So, keep looking for

better problems,

otherwise you'll be bored. So, um, what

is your favorite holiday and why?

Oh, my favorite holiday, um,

is it really

cheesy to say Christmas?

Half my guests say either Christmas or

Thanksgiving. So, no, I'm going to say

you're fine.

No, it's it's just the feeling around

Christmas. I'm not a a religious person

and so I don't come at it from that

perspective. But for me it's around the

rest and the just the family like just

being able to be around my family a lot

and just how joyful everyone is.

Okay. Awesome. Um are you a morning or a

night person and do you have a favorite

routine?

I used to be a night person and

everything's changing as I enter

menopause. So now I'm I wake up at 3:00

every morning

whether you want to or not.

Whether I want to or not. So I've become

a morning person. And actually, I really

enjoy it. I often start my day at 7:00

in the morning and and I I have that

buffer time beforehand and I find that

that's my really my most creative and my

most productive time is sort of like

between 7 and 10. So, I've become a

morning person. It's really weird.

Great. Um, what is one thing that you

would want your successor to remember

you for?

um like truly and genuinely impacting

people's lives, like really making

change for them. And every time I hear

that from one of my clients, it really

like fills my heart. I don't want to be

known as the best strategist. I don't

want to be known as the best

implementer. What I want to be known as

is that I saw people for who they are

and I understood people for who they

are. And that way the decisions we made

and the impact that we made was really

real, you know.

Awesome. That's great. Um, where are you

finding creativity right now?

In rest and in travel. So, I just came

back from San Francisco for just like

the weekend. And holy smokes, what came

out of me while I was traveling was like

getting out of your environment and

getting out of your um your daytoday

just opens up, you know, things that

I've been putting off for 20 million

weeks and then, you know, I sat down and

did them in half an hour and it wasn't

even productivity. It was like

everything was clear. So, just getting

out of my existing environment is really

important.

Great.

um what do you have coming up in the

next year or so that's got you really

excited?

This is a year of partnership. It's a

year of growth. It's a year of like new

opportunities. And so this partnership

that I'm developing with my my partner

is uh really exciting because it's

putting a whole new level and a whole

new layer on what I was planning to do

already. And then I am also starting up

a new venture with another partner

that's in a totally new space and it's

all around self-managing organizations

and you know self-managing teams and

just some like a totally new area of

thinking that I'm pretty excited about.

Okay, great. Uh Stephanie, where can

people go to find out more about you?

Best place to find me is on my website,

Stephaniehazay.biz or I'm pretty active

on LinkedIn.

Okay, great. I will uh link that down in

the show notes. So, I just want to thank

you for the time that you've shared on

the episode today and uh this has been a

great conversation and hopefully we can

do it again sometime.

Thanks so much for having me.

You've been listening to the Art of

Succession podcast with your host

Barrett Young. Twice a month we'll bring

you interviews sharing the successes and

challenges from business owners with

their own succession stories. The Art of

Succession is sponsored by GWCPA and is

provided forformational purposes only.

Before engaging in any transaction, you

should consult your own adviser. If

you've enjoyed this episode, please

share it with others.