Hey, now use Savages. This is the Saturday
side hustle, and I'm Dave Lorenzo.

I'm solo today. Nicki G will be back
with me tomorrow for the Sunday special.

This session that you're
about to hear is a

seminar that I conducted for the
Vistage Coaching Organization.

Vistage is the largest coaching
organization in the world.

This is the first few
minutes of that session.

My goal with this segment
of the session is to

get the CEOs who are in the room.

Everybody in the room is a
business owner and a C E O.

My goal is to get these folks to
think about who they want to sell

their business to,

and who they need to influence
to increase the value of their

business, to get the maximum
price for their business.

When they're ready to sell,

how can they get from where
they are now to creating a

business that is incredibly valuable
that will give them the most

options when they're ready to exit?
So I've asked these people to

think about a person who they can
connect with that can improve the

value of their business.

And I put up on the
screen a slide that has

the different drivers of value. So
if you listen to the show regularly,

you'll know there are
10 key value drivers.

Nicki g and I have discussed them
with you over the last few weeks.

I put that slide up and I say
to the folks in this room,

look at these 10 value drivers.

These are the 10 areas that
you must improve to be able to

sell your business for the maximum profit.

Who do you need to influence to
improve these drivers to have the

most options when you're ready to exit?

And I've asked them to think of a person.

Some of them have told me that that
person is already in their business.

It may be they're number two.

It may be the second in command of
the business that they're looking to

influence to get them to do a
management buyout of the business.

Some of them have told me, listen,
I need to improve these drivers,

but I want to sell my
business to a competitor,

and I need to know how I can
influence that competitor to buy my

business. One person said they wanted
to sell their business to a supplier.

Another person told me they
needed to influence a specific

person in their industry
to help them create a

strategic alliance so that they
could increase the value of their

business for exit strategy that
would provide them with maximum

value. So all of these
folks have a person in mind,

and now I'm taking them through
ways that they can influence

the folks who could buy their business.
I'm taking them through the core values.

We're talking about the experience they
need to create with that person so they

can get the most value
when they're ready to exit,

have the most options when
they're ready to exit. Now,

the recording quality
here is not fantastic.

I'm taking this from a recording that
the gentleman who leads the group

is giving me,

and this was recorded on
his computer from people

who are on Zoom. So he had, I think
we had about 15 people in the room,

and then he had another 30
people on Zoom watching.

This is the recording from Zoom,

and we weren't using any
sophisticated equipment at all.

We're basically shouting into a computer.

So you'll be able to understand
everything I say and all the

questions that I'm asked,

but the recording quality isn't as
high a level as we would like. It isn't

the same quality that this segment
of the show is recorded at,

but you'll be able to get a real feeling
for what these people are thinking

about and how the CEOs who we all work

with think, if you're a ceo,

put yourself in this boardroom
with me and with these folks,

and put yourself in a place where you
have to influence someone in order to

get maximum value for your business.

So come with me now inside
the boardroom with the c e o,

and we'll be back after
the show to discuss what

we uncovered in this session.
Here's the session. Enjoy it.

I want you to think for a
minute about how influence and

persuasion can help you with all the
different aspects of your business.

Those of you who have seen Vistage
speakers a lot know that this is the

Vistage Wheel of business or Wheel of
Life, or whatever they call it, right?

They've never seen this. I never
show this. You never show this, okay?

I'm the only speaker in Vistage that
does what they tell you to do. Anyhow,

all of these different areas,

Vistage makes us put this slide up
for everybody except for Harvey.

So what we're going to talk about today
will help you with hiring top talent,

negotiating agreements,
planning leadership succession,

getting things done with your
team, attracting new customers,

deepening share of wallet, and
increasing lifetime value. Now,

here's what I'm going to
put up. I do a lot of work.

My team and I do a lot of work in helping
companies prepare for the eventual

sale.
They exit, right?

We do this from 15 years in
advance all the way back.

This is our checklist of drivers
of enterprise value, alright?

You can also consider this if you're going
to sell your business a due diligence

checklist.

What I want you to do while we're looking
at this checklist is I want you to

pick one of the items on here
and have someone in mind that you

can persuade or influence
along this chart,

and we're going to use that avatar through
the rest of our presentation today.

So I'm asking you to pick one person in
mind along the lines of one of these key

drivers so that you can have somebody
in mind to use the system that I'm going

to share with you.

So I'm going to teach you a system
to persuade and influence people,

but pick one person that will help you
with one of these things. So for example,

increasing and improving
your revenue streams, right?

If you only have one type
of revenue in your business,

maybe you want to acquire another
business that can help you provide an

additional revenue stream,

that's the person that you'll want
to persuade or influence leadership

development or management retention.

Maybe there's somebody that you want to
persuade to stay with you for the long

term. Maybe it's your
successor operations,

standard operating procedures.

Maybe you need to persuade a
member of your team to create SOPs,

human resources, standard
operating procedures.

Maybe you need to implement a new policy
and you need to persuade everyone to

adopt that policy,
reducing legal exposure,

increasing brand reputation, sales
and marketing systems and support.

Maybe you need to improve
your sales in a specific area,

want to attract a new type
of client into your business,

and you need to influence a
group of people to do that.

Improving market industry
or supplier conditions,

financial conditions and reporting
and cybersecurity risk and information

technologies. Maybe you have a
cyber policy you need to implement,

and you need every user to adapt
that cyber policy and you need

to influence them to do that.

This is a checklist if you
want to improve the value,

the overall value of your business,

all of these things are areas
that are key drivers of value.

All of these things have
people involved in them.

So pick one person in one
of these areas to influence,

to connect with,

to help you improve the overall
value of your company. Okay?

Does that make sense? I don't want to
see that. You want to see it for longer?

Keep it up there. There you go.
Okay. While you're looking at this,

I want to highlight revenue streams
and diversity and quality. Harvey,

do you mind if I use that flip chart?
Can I use that book chart real quick? No.

Okay. Take it over you. No,
no. We'll bring it over.

Here's no camera on me
or anything, right? So

there's four types of revenue in
any business, right? First type,

I call it ad hoc, right?

Ad hoc revenue is you go out, you find a
client, you do the work for the client,

client goes away. You go
out and find another client.

We're all familiar with this, right?

This is what we all chase all
the time for and over again.

The second type of
revenue in your business

is revenue, right? Revenue. Revenue.

That's repeat revenue. I love
doing that. Nobody laughs with me.

Repeat revenue is,

yeah, took me a minute.

So repeat revenue is same
client, different work,

different product line. It
requires an investment of trust,

but not the same investment of trust
as acquiring the initial client in the

first place. Think about
that ad hoc revenue.

Got to invest a lot of trust or somebody
who has to invest a lot of trust before

they do business with you.
Repeat revenue. They trust you.

They've seen you do this one thing.

Now they got to trust you
to do the second right.

The third type of revenue

Is recurring revenue.
Same client, same work,

same thing over and over and over
again. Manufacture widgets. It's widget,

widget, widget, widget, widget. Not a
lot of trust required. Thank you, Harvey.

Not a lot of trust required
because they've seen you do it.

They know you can do it.
You're competent at it.

They believe in you and they believe
that you can. And the final is,

oops, passive,

Right? You go passive. You
go to a place and speak.

You tell people what you do,
you demonstrate your knowledge.

People call you. They drop a bag of
cash on your desk for your widgets.

I trust you. You seem like the
best widget manufacturer there is.

I would consider that passive revenue.

You have a strategic alliance partnership.

Now I'm going to drive you nuts and
I'm going to go back over there.

Is that okay? Explain. Say the difference
between repeat and recurring. Again,

repeat, same client, different
type of work, different revenue.

So repeat is widgets and crankshafts.
I've seen you do widgets.

Now I need crankshafts. You go, I do
crankshafts. And they're like, oh,

we've been with our crankshaft guy for
30 years now we've got to trust you to do

crankshafts. We'll give you
a one. You do a great job.

Now you're doing widgets and crankshafts
recurring is widget, widget, widget,

widget, widget. I've seen you do
widgets. I trust you. You can do widgets.

Could be for different, I would say
recurring revenue. For our purposes,

recurring revenue is same. I'm talking
about investment of trust, same client,

same product or service,

because the investment of trust is not
necessary because they already trust you.

They don't have to make an additional
investment of trust and then passive

revenue. Think about a
strategic alliance partnership.

You and I are strategic alliance partners,

and I say to you, okay,
I made the widgets.

Now you make the widget add-ons.
I'm going to send them over to you.

Customer may not even know
I'm sending them over to you.

That's passive revenue for you
because every widget I make,

I need you to do the widget add-on.

What we focus on most in
our world is this ad hoc,

and we don't spend a lot of time focused.
We don't spend a lot of

time focusing on these.

But what I'm going to talk about
today and what adds the most value

to your business from a revenue
stream standpoint are these three

things, repeat, recurring and passive.

And the reason that that's so
important is because in some

ways, in a lot of ways,
these three are predictable,

especially recurring
revenue or passive revenue.

If you have a strategic alliance
with somebody or you're the bolt-on

manufacturer for the thing
that bolts on the widgets,

that revenue is predictable. And when
somebody's going to buy your business,

when there's an exit,

everybody wants to know how much
they're going to make in the future.

I call these three types of revenue,
repeat, recurring and passive.

I call that relationship revenue
because those three types of revenue

can be acquired into your business through

relationships.

Repeat is the relationship with
the customer, with a client.

Recurring is a relationship with
the customer and the client,

and also making sure that
everybody in the industry knows.

So you have to have a relationship
with people who are influential in the

industry. And then passive is
strategic alliance relationships.

So you can engineer
these in your business.

So as you look at these
drivers of enterprise value,

and when you heard me talk about
these three as relationship revenue,

think about the relationships
in your business and who

maybe the correct word is whom you need
to influence and have that avatar in

your mind as we walk through
our time together today. Okay?

So while you're thinking of your avatar,

these are some ground rules for the
presentation. First and foremost,

I'm not telling you what to do and
it's important that I say that, right?

I'm just giving you what
I've experienced that works.

And my hope is that you take away
one thing from our time together.

So if you hear something that
doesn't fit with your business,

it doesn't fit with your personality
or that you disagree with,

I want you to treat it like a buffet.
Take what you like and leave the rest.

Okay?

So just get one thing that you can use
that can add more value to your business

or make your life a little bit easier.

This relationship operating system
is going to give you options.

Basically.

One of the things I like to
talk about with entrepreneurs,

and Pete and I got into it,
and it was Pete's doing,

it wasn't mine. Within the first five
minutes of our conversation is the first

question I usually ask
an entrepreneur is How

be the end of your business?

And my whole goal as a consultant these
days in working with entrepreneurs

and business owners, particularly
mid-market business owners,

is to make sure they have options when
they're ready to exit. Right? Harvey,

there's nothing worse than having to exit
without options because if you have to

exit without options, it
drives the valuation way down.

So this relationship operating system
hopefully will give you options for when

you have to exit or when you have to hire
somebody from your management team all

the way through that
list of value drivers.

This system is going to give you options
all along the way. And then finally,

the reason why you should consider
what we're talking about today and

implementing at least one thing is
because my whole philosophy is that we

put relationships first and putting
relationships first. It just feels good.

It feels like it's the right thing to
do because it is the right thing to do.

It's how we were all brought up.

So what do people miss about
relationships and particularly

influence? We only influence
people we care about.

Think about this. We can only
influence people we care about.

Now,

immediately your mind's probably went
to a situation where you thought to

yourself, well,

somebody who stole from me or
somebody who manipulated me in

some way, exercised
some influence over me,

and I know that person didn't care about
me because they took something from me,

or they did something that was unethical.
I want to point to number three here.

When you think about that, in my world,

influence is I'm helping you see
something that's good for you and

good for me. Manipulation is
when it's only good for me.

So I don't want you to think
of influence as a dirty word.

I want you to think of it as getting
people to eat their peas and carrots,

getting people to do what's good for them.

A strong relationship
makes everything easier.

From the context of an exit strategy,

a strong relationship with a person who's
going to potentially buy your business

someday, maybe it's a competitor, makes
it easier when you're ready to exit.

Strong relationship with the number
two in your business makes management

succession easier.

A strong relationship with a prospective
client makes doing business with them

easier down the road. So we're going to
talk about how to make your life easier.

And then finally, and
this is the key point.

This is receiver based. We
don't sell stuff to people.

We don't sell our ideas to people.
We don't sell widgets to people.

People buy stuff from us.
People buy into our ideas.

They buy into you as a leader.

Your people in your business
buy into you as a leader.

So influence is about helping
them see that you're a person of

goodwill, helping them see
that you want to help them,

helping them see that you want
what's best for their future,

helping them see that you have
a vision that they don't have,

and you're going to help them get there.

So here's your relationship
operating system.

This is what I'm going
to show you today, okay?

Harvey and I had a conversation
last night briefly about e o s,

the entrepreneurs operating system,

that dashboard with all the
key performance indicators
and drivers and stuff

like that. This is your
relationship operating system.

This is the counterpart to that. So

the best way for us to get what
we want is by giving people or

helping them get what they want.
Here's a little pie chart I put up.

Very unscientific for those
of you for engineering types,

if you want to help people,

you have to understand that when
we're going to influence them,

there's a portion of what
we try to accomplish by

helping them get what they
want by focusing on how they

get it, by how we help them get it.

And then there's the overall
relationship experience.

As a consultant,

and I was a consultant with the Gallup
organization for a number of years,

we're really focused on our
methodology all the time.

We fall in love with our
methodology. In fact,

we claim that our methodology
is a key differentiating factor.

We'd love to talk to our
clients about our methodology.

We love to talk to clients about the
results they're going to get and the

results that they're going to get are
important because we'd be out of business

if we didn't deliver the results.

But if you look at what
really matters to clients and

customers, what they're going to
get, what they think they want,

that's important. But as a
differentiating factor for all of us,

everybody, if they're in business
and they stay in business,

can deliver on the value proposition.

Everybody can deliver what people want.

If your competitors
couldn't get the results,

they wouldn't be in business anymore.
Methodology, as much as we love it,

we've got the best mouse trap,

very small share of mind with the people
you're trying to influence if they're

your customers.

But the relationship experience
is pretty much everything.

So the way people feel,

the way you make them feel when
you're trying to influence them,

it means everything. So you've
got your avatar in mind,

the person you want to
influence and persuade.

Maybe it's somebody you
want to buy your business.

Maybe it's a key management
team member, right?

Start thinking about
it using this context.

So that key management team member
person, who's going to be your successor,

what do they want? Well, they
want to be the successor, okay?

What's going to influence
them to be the successor?

Just making them the successor.
Is that going to be enough? Well,

over the next five years, if
you want to exit in five years,

no. The experience you provide
them and helping them get ready

is what's going to influence them as to
whether they want to take over or not.

The person who's going
to buy your company.

If you're targeting a
strategic acquisition so that
you have the most options,

the person who's going
to buy your company,

the competitor that's
going to buy your company,

or the supplier that's going to buy
your company so that they can vertically

integrate the experience they
have in working with you,

you should consider yourself
being evaluated the whole time.

And what is the experience
you're providing?

The person want to influence?

You want to introduce a new product.

The experience that they've had in
working with you over time is going to

influence how receptive they
are to adopting the new product.

I get that. So in sales, it does.
When it comes to your management team,

it absolutely does.
Sure.

But for acquiring brand new
clients who never bought food,

you say it applies the
same proportions here,

I would say you can use it
as a competitive advantage
to if you decided to,

you could use it as a competitive
advantage. And here's how,

and Vistage is a perfect example of this,

but I can give you other
examples from businesses.

So Harvey goes out and he
interviews prospective members,

and he thinks a prospective member is
going to be a really good fit for the

group.

What's the best way for him to put
that perspective member over the top,

to invite that person to
participate in a meeting,

to talk to all of you and see the
value that you've gotten from Vistage.

So for the brand new client,

to immerse them in the experience
is an accelerant to the sale

because it deepens the relationship.
Now, if your question is,

is it a hundred percent
necessary? I would say no.

It's not a hundred percent necessary.

But if you want to accelerate
the process with a new client,

I think you can use the experience
by immersing them in it.

There's an old school clothes
that people used to use

all the time. Some people still
use it called the puppy dog.

Are you guys familiar with this?
Have you ever heard of this?

So you probably know about this.

You go to the pet store or the Humane
Society and you want to adopt a dog,

but you're not sure.

You don't know if you can handle
the dog running around your house.

What do they do? They give you the dog
and they go take it home for the weekend.

So you take the dog home for the weekend,
right? Dog craps all over your house,

but you fall in love with it. And what
happens? You don't give the dog back.

You keep the dog. Even the
fostering foster program, right?

It's called the puppy dog clothes.

And smart car dealerships
will do this too.

You take a test drive and
you say, I love this car.

I really want this car,

but I'm just not sure that my
spouse is going to be into it.

So you want to use the experience to
accelerate the sale. What do you do?

Here's the keys. Bring it back on Monday.

So then you give the keys to your wife,

and she realizes you pull up in
this huge suburban, by the way,

actually happened to me.

You pull up in this huge suburban
and your wife comes out, she's like,

you bought this thing. I didn't even
test drive it. Look how huge this is,

is a tank. I can't believe
it. No, no, no, no,

no. We get to drive it for the weekend,
but it's going back on Monday, right?

Okay, you take it out, go take the kids
to the beach, go shopping, whatever.

Next thing takes the kids to the beach.
Wow, all this stuff fits in the car,

right? Goes food shopping. Wow, I don't
have to bend over in the backseat.

The deck is right here. I
can put the stuff in, right?

Takes the dogs to the park. The dogs
come back from the park all wet.

They shake off inside the car, doesn't
get the seats wet, right? Opens the back,

it's inside. She comes
in, does it come in blue?

That's it. Sold. Didn't want to
drive the tank. Now, by the way,

she maneuvers that thing like she's
a truck driver. She's fantastic.

She drives it better than I do,

but that's how the experience
can accelerate the sale. So

anytime you can engineer an experience,

a really good experience into the process,
you can use it for sales purposes,

for sure. Okay, so remember
the word of caution, right?

The differentiating factor is how
all these things will work together.

So here's how you influence the
experience. You first have to demonstrate,

and that's a key word,

demonstrate to the person
you're looking to influence,

that you are a person of
integrity. After that,

you have to show them
that you are competent.

So if you're looking to persuade or
convince a client to do business with you,

you have to show that you're competent
at performing the task you're

supposed to perform.

If you're looking to persuade a management
team member that they could be your

successor, you have to demonstrate
that you're competent to train them.

The next level in the
hierarchy is empathy.

And empathy is critical because
you have to understand what their

reasons are for wanting to
do what you want them to do,

for what their reasons would be if they
understood what you want them to do.

So empathy is the gateway to
sharing your vision with them.

So you're looking to influence somebody,

and you have a vision for their
future that they just don't see.

And you guys are CEOs,

so you probably have a pretty good
vision of the future for a lot of things.

If you want to accelerate
the relationship,

you can make them feel like they're
part of a community. Community,

could be their work group,
be your leadership team.

It could be an industry association,

but their feeling of belonging
because achieved the level of status,

and they're now part of a
community. It's critical.

And what this all leads to in
the end is professional intimacy.

And what that means simply is the
person you're looking to persuade.

They don't make a move
without checking with you,

or they don't make a move without using
your company's product or service,

or they feel so close and
so comfortable with you

that they consult with you before
they do things that are critical

or important to them. And again,
Vistage is a great analogy for this.

Think about how you rely on Harvey, right?

If you've got decisions in your business
that you're going to make Harvey's done

all of these things, these things,
probably without even knowing it,

he's built on this foundation to a
point where hopefully you guys are

willing to consult with him before you
make critical moves in your business.

Does that make sense? Okay. We're going
to look at each of these levels now,

and I'm going to show you ways
that you can demonstrate these

core values. Again,

you wouldn't be in this room
if you weren't people of
integrity and competence.

So I don't want you to think of
this as just having these qualities

you have to demonstrate to
the person you're looking to

influence. You have to demonstrate
these qualities to them,

or you're not going to be
able to influence them. Good
or good? Good. All right,

here we go. That was
my little Pacman graph.

Alright,

so here's how this breaks down,

and here's how we're
going to chunk these up.

The first two levels,
competence and integrity.

They demonstrate authority,
believability, and credibility.

Okay? So if you want to influence someone,

you have to show that you're
an authority in the area.

You have to demonstrate that they should
believe you and that you're someone who

could be trusted in this specific area.

Once you've overcome that hurdle,

once you've built on that foundation,

then they invest their confidence in you.

That's when they have
personal confidence that, Hey,

Peter has my best interests
at heart. He understands me.

He sees what my future should look like.

So once you've built on this foundation,

that's when they'll invest
their competence in you.

And at this point,

you can feel pretty good that you can
influence them and you can persuade them

if they buy into the vision you
have for their future. However,

to take the relationship
to the next level.

If you can make 'em feel like they're
part of something bigger than themselves

in a community,

or you can deepen that relationship
to the point where they have so much

trust,

so much confidence in you that they
call you before they make any move,

that's when you really
have relationship clarity.

And there are clients that we
have who exit their businesses

and the person they sell their business
to five years later still calling them

and saying, Hey, I'm going to do this.
Can I bounce an idea off of you? Hey,

can we go to lunch? I want
to bounce an idea off of you.

Think about that for a minute.

What a great potential relationship
that could be where they feel so good,

so comfortable that they'll
continue to call you. By the way,

you can get a consulting
fee for that. All right.

Thanks for joining me for Inside
The Boardroom with the c e O.

As you can see, or maybe as you can hear,

these folks were incredibly
engaged and they are

thinking about these things
for the very first time.

You have a great
opportunity because you are

meeting me here,

and because you spend time
with Nicola and me each day,

you're already thinking about your exit,

and now you've heard what other
people who are in your place,

the CEOs, the entrepreneurs are thinking.

So I want you to take a look at the slide

that accompanied this show.

You'll see in the show notes that
the slide with the hierarchy,

the core value hierarchy, is
the cover for this episode.

I want you to take that
slide, the pyramid,

and look at each of the core values
and think about who you need to

influence using those core values
in order to get the maximum

value for your business. If you're
not a c e o and you are not looking to

sell a business, you
can use this hierarchy,

this pyramid to influence anyone
in your business or in your life.

But think about how you're
going to demonstrate these
core values to the people

you're looking to persuade,
you're looking to influence,

and you can use it to help connect
with people who can eventually buy your

business and offer you the most
options when you're ready for an exit.

I'm Dave Lorenzo. This is
the Saturday side Hustle.

We'll see you back here again
tomorrow for the Sunday Special.

Take care.