I'm Dave Lorenzo, the Godfather of Growth, and this is the Inside BS Show. Hey now, Inside Business Secrets seekers! I'm Dave Lorenzo, the Godfather of Growth, and today we're taking you into the debut of our Lead Generation talk. It's a cold winter evening, and 50 business owners have gathered in a Mexican restaurant in the suburbs of Chicago, and we are going to emphasize that without growth, there is no opportunity to build a business that will act like an investment.

Sit back and relax and join us inside the Mexican restaurant just outside Chicago, Illinois, as we share with you the insider secrets to building a business that acts like an investment. It is my pleasure to introduce Dave Lorenzo, a renowned business strategist, sales expert, two-time author, and national speaker. As the founder of the Exit Success Lab, he has spent over 25 years helping businesses unlock their full potential.

His expertise has been sought after by Fortune 500 companies throughout the country like Pfizer, Marriott, Texan, IBM, and today we, all of us, have the privilege of learning from him firsthand. Known as the Godfather of Growth, Dave challenges business leaders to rethink their strategies, uncover hidden opportunities, and take decisive action. Get ready for an insightful impactful session.

Please join me in welcoming my friend who came here from Miami in February. Dave Lorenzo. Thank you, buddy.

You're the best. All right, well, good evening and thank you all for having me back. I really appreciate it.

Before I get started, if you don't mind, please raise your hand if you were here the last time I was here, if I look vaguely familiar. Okay, wonderful. So, like two-thirds of the room.

I will tell you that Steve's introduction from the last time to now is 100% better. So, thank you for that, Steve. I know, I'm sure it will be better later.

I will tell you that as far as introductions go, I want to just share a quick story with you. I've spoken, two years ago, I did 70 speaking engagements over the course of that one year. So, I've probably spoken six or seven hundred times over the last 30 years.

By far, the worst introduction I've ever had was 2004, and I can remember every single detail, 2004 in Overland Park, Kansas. At that time, I was managing partner of the Gallup organization, you know, the Gallup poll. They have a consulting group as well and I was leading the consulting group.

I was booked to do a talk to a company called Sutherland Lumber. And Sutherland Lumber is like the Home Depot in, you know them? Okay, like the Home Depot in Kansas, all right? So, there's this really ornate theater and everybody from the company's there. The company's basically closed down.

It's all of their floor associates and their inside and outside salespeople, and I'm the keynote speaker. So, I'm in the back of this ornate theater and I'm waiting to go on and the guy who's the director of human resources supposed to introduce me is nowhere to be found. So, I'm standing there in the back and it's pretty much just me and the guy who's gonna like pull the curtain and all of a sudden the side door opens and you know the sunlight comes in and this guy gets out of the out of a car and comes walking in and it's the HR guy.

I put my hand out, walks right by me, doesn't say a word, and he goes right out onto the stage. You open the curtain, goes right out onto the stage and there's like the stand-up comedy mic is out there and he grabs the mic and he's like, ladies and gentlemen, if I can have your attention. Everybody's talking and they stop and he says, some of you probably haven't heard but unfortunately, and I forget the gentleman's name, let's just say it's Brian.

Brian Sutherland was found dead in his home last night. It's the patriarch and he's like, we're going to cancel the rest of the program today but since he came all the way in from New York, ladies and gentlemen, Dave Lorenzo. So, I'm really grateful to Steve for taking the time to write down the introduction and read it for you today.

What we're going to talk about tonight, we're going to talk about a couple of things and I have some free stuff to give you. I have three free gifts for you. How many free gifts? All right, good.

So, at least four or five people are still paying attention. I have three free gifts. Thank you.

Very good. Three free gifts for you tonight. We're going to talk about why you should start to think about how you're going to exit your company, why that's important.

We're going to talk about what you need to do if you want to increase the value of your company, whether you want to exit or just pass it on to your idiot son Fredo who's weak and stupid. Or we're going to talk about, if this is appealing to you, how to achieve your goals for the rest of the year by attacking your goals in 90-day increments. And I'll tie all three of those together.

But I have one request of you and this is the only thing that I'm going to ask of you. I want you to treat the next 25 minutes, and I'll start my timer now, the next 25 minutes like a buffet. Okay? What do you do when you go to a buffet? You pick what you like and you leave the things you don't.

Okay? So, I may say some things here tonight that don't resonate with you at all. And I want you just to leave those aside. And I want you to take the one or two things that really connect with you and I want you to bring them back to your businesses and implement them.

Because one or two things that you discover tonight could make all the difference in the world to you, could make your life a little bit easier, could give you a little bit more joy where you work, or might just make you a couple of extra bucks. If we can do that, can we all together on the count of three say yes? One, two, three. Yes.

All right. You guys are great. Let's take a look at some real quick statistics.

Okay? And I promise Steve there would be no math. 68% of CEOs in mid-market businesses do not have an exit strategy. Okay? 68%.

Now, mid-market, you might get three or four different definitions of mid-market. For us in Exit Success Lab, we define mid-market as 10 million to say 150, 200 million. Depending on who you talk to, there may be a couple of different definitions.

But think about that for a minute. 68% of people who have those size businesses don't have a plan for their exit. 19% of businesses, 19% of privately held companies, 19% sell.

How many don't sell? Where's the accountant? 81%. 81% of businesses don't sell. Think about that for a minute.

Okay? This is where you're spending all of your time. And then the final thing I put up there, 34% of businesses, only one-third of businesses make it to the 10-year mark. Now, I think about these numbers a lot because I get in front of arguably in a slow year 350, 400 people just like you, business owners, right? In a busy year, I probably get in front of 1,100 or 1,200 business owners.

So I think to myself, all of these people are working so hard. And if I get in front of 1,000 business owners, maybe 350 of them will eventually make it to the 10-year mark, right? Only 200 of them are going to be able to sell their businesses. Now, listen, if you don't want to sell your business, that's fine.

It's not a problem. And for me, when I started my business, when I began my entrepreneurial journey, I thought to myself, hey, I'm not in this to sell it. I'm in this to build what I would call at the time a lifestyle business.

You see, I had a career where I worked in the corporate world for 22 years. I came up through the ranks of Marriott, started my career as a dishwasher, ended up becoming a bellman and then working pretty much every job you can in the hotel industry. And then eventually became a general manager and then ran a brand for Marriott, took a new business unit from startup to $50 million in three years.

Then I was recruited to join Gallup and I took that business from startup to $250 million in six years. Using other people's money, recruiting people to work with me and building teams enabled me to do that. I led a consulting engagement for a large pharmaceutical company.

Steve mentioned them in the intro. And that consulting engagement is what encouraged me to go into entrepreneurship in kind of a roundabout way. And for those of you who've heard me speak before, you probably have heard this story.

But I'm going to briefly tell it again so that you understand what we may have in common, you and I. I began my entrepreneurial journey because I was leading this consulting engagement for the large pharmaceutical company. And the CEO of that company called me and demanded that I show up in his office to deliver results at a time and on a day in time when I wasn't prepared. Our study had just come out of the field, we didn't have any data, but he insisted that I go to see him.

His office was only four blocks away from mine and I had had plans to meet my then fiancee who had become my wife for lunch. So what did I do? I canceled the plans with my fiancee and I went because this guy was my best client. He was worth about $20 million to our firm and our, you know, my book was $250 million, this guy was like 10% of my book.

So I dropped what I was doing and I went over to deliver a presentation I wasn't ready to deliver yet. I walked out into the street and got to the corner of 6th Avenue and 43rd Street. There were no cell phones at the time so I wasn't on my phone.

There were 30 people in the crosswalk, 29 of them were successfully able to avoid the taxi that struck me. Now, I don't remember very much from the minutes that followed. The police report said I flew 23 feet 9 inches.

The next thing I remember is being strapped to a backboard, being wheeled down the hall of St. Vincent's Hospital on a gurney with no feeling from my armpits down. And I did in that moment what pretty much everybody does. I made a deal with God.

I'm not particularly religious but in that moment you find religion. And I said, look, if you get me out of this, I'll make some changes. And one of the changes I'm going to make is instead of focusing on working to live, I'm going to really redo everything so that my business supports my lifestyle.

So I started a business. And by the way, that was a long time ago. That was 19 years ago.

And as you can see, I'm fine. It worked out great for me and it was probably the best thing that ever happened because I don't know where I would be today if that moment hadn't occurred. But my focus at that point was on, instead of building something big, was on building something, building a business that would enable my lifestyle.

And I think, I'm not going to speak for all of you, but I think for a lot of us, that's why we go into business for ourselves in the first place. That's why we become entrepreneurs. And then something happens at some point and about a third of us decide that we want something more than just a lifestyle business.

And then another third of us decide or we're foisted into a position where we can build something even bigger than that. So there are three different types of businesses that I'm going to talk to you about today that I'm going to share with you. And I want you just in your mind to put yourself and your business in each one of those categories.

The thing about your exit strategy and how your business ends for you, whether you have a lifestyle business or an entrepreneurial business or you're the CEO of an enterprise, is your exit strategy serves as your roadmap. Now most of you in this room look like you're familiar with what a roadmap is or was, right? Now we don't use a roadmap. Now we got a phone or you have a GPS in your car, but in the old days when you were lost, this is what you looked like.

For your business, if you want to know where you're going to be in the next three years or six years or 10, 15 years from now, you probably should have some sort of a plan, a map or a guide to help you get there. And if you haven't thought about how your business is going to end for you, you don't have that map. So when I sit down with a business owner for the first time, my partner, Nicola Gelarmino is here.

And when we sit down with a business owner for the first time, we ask them these three questions. What is your business worth today? What will it be worth three years from now? And how will you get there? And the reason we ask those three questions is because we want you to have a target that is attainable, that you can see, and we want you to be able to strive to reach it. If you don't have the map, you don't know where you're going.

So even if you don't have an exit plan, you should have an idea for what your business is worth and have an idea for how you can increase the value of your business. I can help you with one of those two parts tonight, right now here in the next 10 minutes, okay? I can't tell you what your business is worth right now. There are probably some professionals here in the local area, either M&A experts, business brokers, valuation experts, that you can rely on, that can tell you what your business is worth.

But what I can do is I can give you a guide to increasing the value of your business. And we like to use the term enterprise value for the value of a business. And the reason we use the term enterprise value is because it encompasses the different terms that are used for different sized businesses.

In smaller businesses, the value of your business is based upon seller's discretionary earnings, right? Any of you familiar with this term, seller's discretionary earnings? Okay. What that means is all the money that you as the owner take out of the business, which includes all those supermarket receipts you're running through your business, right? We know you're doing that, okay? And by the way, we can fix that when you go to sell, but it includes those. It includes, there's a bunch of people laughing back there.

Yeah, I do it too. It's okay. Not our business, not our business.

So, yeah. So it includes all the stuff you run through your business. It includes a salary you may take and it includes distributions, okay? In a bigger business, it's about EBITDA, right? It's about earnings before interest, tax, appreciation, and amortization.

But we use the term enterprise value to encompass all that so that when we're talking to people, we're all speaking the same language. So you're going to hear that term in the next few minutes. I want you to know what we're talking about there.

So the three types of businesses I mentioned for our purposes today, the first is main street businesses. And I say main street, when I say main street businesses, I mean businesses that are doing less than $5 million a year, right? And those are extremely respectable businesses. Some of them may be even doing less than a million dollars a year, but they're enabling the lifestyle of the owner and that may be what the owner is looking for.

So main street businesses are valuable and they're important. The second are entrepreneurial businesses. And entrepreneurial businesses, I would put those in the category of $5 million to say $10 million a year in annual revenue, okay? And those folks are focused on working on the business instead of in the business.

Anybody read the E-myth by Michael Gerber? Oh, it's a huge thing, right? I'm going to work on the business instead of in the business, which means that you're not going to be there, you know, like in McDonald's making the hamburgers, you're going to develop the systems and the processes so you can hire people to make the hamburgers, okay? And then the third type is the enterprise. And the CEO of the enterprise thinks to themselves, how do I increase the value of this investment? All of a sudden, your business goes from at the top, something that enables my lifestyle to as an entrepreneur, oh, this is something that could be more valuable than just enabling my lifestyle to all of a sudden, shit, I got an investment. What happens with investments? Well, I buy mutual funds and I don't pick the individual stocks that go in the mutual funds.

In fact, if you have an investment portfolio, you have someone who manages the investment portfolio. So the minute your business in your mind goes from something that enables your lifestyle to something that could have some value that you could sell to something that is a valuable investment that could produce generational wealth, it makes that transformation in your mind first. That's the time you need to focus on your exit strategy.

So whether you're doing 1 million, 10 million, or 50, 100 million dollars in annual revenue, your exit strategy is going to be your guide that takes you all the way through how to work on your business so that it will be a valuable investment that you can sell to create generational wealth. There are people who are in your community right now, millionaires next door, who sold their businesses for tens, if not hundreds of millions of dollars. I worked with a gentleman who literally could be your neighbor.

He was in a neighborhood much like the neighborhoods around here who owned a medical records company. He sold one-third of his business. He was doing he was doing 475 million plus or minus in annual revenue, taking a significant amount to the bottom line, sold one-third of his business for 100 million dollars to a private equity fund.

Stayed on, his business became what they call a platform, and they built other businesses on top of that. They sold that a second time. He participated in that second sale.

That second sale got him 280 million dollars. This is a guy who was cutting his grass in the neighborhood on Saturday afternoons. The transition he made was deciding to take his medical records business from over literally in a shopping center strip mall over the top of a bunch of stores and build it into an enterprise, build it into something bigger.

So I promised you that I was going to share with you how you can increase the value of your business, and there are 10 things that you can look at, and if you systematize these 10 things and get them running like a well-oiled machine, you will increase the value of your business. I'm going to put them up here, and I'm going to highlight the ones that I would focus on first if I were you. The first is financial condition and reporting.

If your financial reporting is terrible, you're going to have a really hard time with your business. The second is your revenue streams, diversity of revenue. How many different clients produce your revenue? What industries are they in? What geographies are they in? The third is sales and marketing systems and support.

Do you have a process for acquiring leads, converting those leads into prospects, converting those prospects into clients? Can someone else run that process for you? The fourth is leadership development and management team retention. This is succession planning. You will often hear exit planning confused with succession planning.

Succession planning is about your people. Can the business run without you? Can you take a vacation for a month? Could you go care for a sick loved one? If you could, then you probably have a good leadership team in place. When people buy your business, they're buying future income, and that future income has to be able to be produced without you.

So your leadership development and your management team retention program is critical. Standard operating procedures for all of your operations and for your human resources practices. If you have minefields in your human resources practices, you will not be able to sell your business.

If you're putting up with the employee who's harassing people because he's your top producing salesperson, you need to fix that, and you need to create systems so that does not happen. Legal exposure. If you're being sued, if you're vulnerable to lawsuits, it's going to be a problem.

You got to fix that. Brand reputation. Your supply chain.

We figured this out during COVID, didn't we? Right? If you're getting stuff from China and China's closed, you got a problem, right? It's a big problem. So you have to have diversity in your supply chain. And then finally, the thing that should be keeping all of us awake at night, cybersecurity information technology systems.

These are the 10 drivers of enterprise value. So in our consulting company, when we help people three to five years ahead of an exit, we look at these 10 things and we go through a process that would be more rigorous than a due diligence process for someone who is going to buy you. And we put a plan in place with you to help you improve the value of your business.

What can you take from this tonight so you can improve your business right now? I would look at these three things. I would look at your financial condition and your reporting. I would look at your diversity of revenue streams.

And I would look at your sales and marketing systems and support. And candidly, hire an accountant or get a fractional CFO to fix your financial reporting and accountability. Don't do that yourself.

Get a fresh set of eyes to look at your financial reporting so that you know it's good because an outside person has said it's good. It's the best money you'll ever spend. But the other two, you can focus on yourself.

And what I'm going to do for you now is I'm going to give you the first of my gifts. And what I'm sharing with you is our profit accelerator. So take one and pass the rest out.

So this profit accelerator, this is 15 ways to increase profit. These are the only ways that you can ever increase the profit in your business. This is our checklist to help you increase business profit.

When we go into a business and we look at these, we go through this 15 step checklist. And we start with number one and we look all the way through. So for example, number one is the pricing strategy.

Is there a way for you to increase your prices without significantly reducing demand? You'll be amazed at how many businesses don't know that they can increase their prices without potentially reducing demand. I'm not going to go through all 15 of these. But I want you to take these back and use them in your business in order to increase the value of your business.

Anybody know who Napoleon Hill was? Laura, you want to tell us who Napoleon Hill was? Go ahead. Right. Okay.

So Napoleon, you're right. Napoleon Hill was a speaker and an author. Andrew Carnegie tasked Napoleon Hill with going around and interviewing the 100 most successful CEOs in the 1920s.

And in 1937, he published a book called Think and Grow Rich. Anybody ever heard of Think and Grow Rich? Okay. In that book, Napoleon Hill identified 21 qualities of the most successful business owners of his day.

And this book has stood the test of time as the seminal work in business ownership and entrepreneurship. There are five qualities that today we've found in working with our business owners are really resonant. Those five qualities are successful business owners have a burning desire to drive value in their business.

The second quality is that successful business owners are goal oriented. Okay. The third is that they're decisive.

They'd rather make decisions quickly and be wrong than vacillate and be right but late. The fourth is that they have specialized knowledge. And the fifth is that they're part of a supportive community.

What I'm going to share with you now may make a difference in what you're to do as far as the value of your business and your approach. If you want to increase the value of your business and you want it badly enough, if it has personal importance to you, you will seek out the knowledge, the skills required in order to do that. I know many of you from talking to you participate in coaching and consulting programs.

I know you have a member here who's a Vistage chair, which is a fantastic program. And that's a great place to start. The specialized knowledge that you need to acquire is some of it is contained right on the sheet here.

If you want to grow the profit of your business, if you want to learn how to implement some of those things, you can seek out that specialized knowledge. Now your goal orientation is part of that second sheet that I handed out to you. And here's the offer I'm going to make to you.

If you want to fill that sheet out and answer those few questions on that sheet, the first three people that turn it back to me are going to get these three copies of the book that I brought with me. Everyone else who turns it back in will get a copy of the book that I will send to you. I wasn't going to bring 50 copies of the book.

It's just too heavy to carry on the plane. Okay. But I brought three.

So the first three that fill that out completely, if the form is not completely filled out, you're not getting the book, fill it out completely and give it back to me and I'll give you a copy of the book. But you'll also get the third gift. And the third gift is you'll have a one-on-one consultation with me.

I will talk you through the profit activator that is on this sheet that you think will resonate with you the most. It's free consulting. The call alone is something that we charge $850 for.

The consulting could be priceless if you implement the profit activator and it's worth tens of thousands, hundreds of thousands or millions of dollars to you. So that's my offer to you. And I wanted to say thank you to you all for having me back here.

And I especially wanted to, I love this picture. I especially wanted to thank this guy. So I will tell you that one of the great joys of being a business owner, I mean, it's a roller coaster, right? You're all, you're all on that ride too.

But one of the great joys of being a business owner is that we do things that take us out of our comfort zone from time to time. And one of those things that many of us have to do is network at things like this. But because I was taken out of my comfort zone and I joined a networking group, I got to meet some of the people who are now literally my best friends in life, the best friends that I've made as an adult.

And I'm particularly grateful. And I, you know, my friends know that I don't have any problems saying how I feel because I could get hit by a cab tomorrow and be dead. So I just wanted to say thank you, Steve, for your friendship and for inviting me here not once, but twice.

So thank you to all of you. I got the books up here. If you want to hand me the sheets or you can hand a sheet to Nicola or you can give it to Steve.

If your information is on there, we'll contact you and send you the book if you don't get one while you're here. I'm not letting you off that easy. First and foremost, can we get a round of applause for David? How many times As the talk ended, I took a few questions from the audience.

And while people were asking their questions, folks from the crowd were walking up to the front of the room to hand me the forms that they had completed. These were lead generation forms that I had given out. And you heard me ask Steve to help give out during the talk.

Those forms were the entire reason for getting on a plane, going to Chicago, and delivering this presentation. Those forms converted the people who were in the room from suspects into prospects. It converted them from business owners who came to a Mexican restaurant on a Wednesday night into leads for exit success lab.

That was the point of the presentation. If you'd like to go in depth with me as I describe some of the results of the presentation and how we designed the presentation to work and what we would do better, if you want to join us for that, you've got to come back tomorrow for the next edition of the Inside BS Show. This show exists to take you behind the scenes, to give you the insider business secrets.

We're going to share with you how the magician does the trick in tomorrow's show. If you're a business owner and you like leads, you want to join us for tomorrow's show. I'm Dave Lorenzo.

I'm the Godfather of Growth. This is the Inside BS Show. We're back here with you and for you every single day with a brand new show at 6 a.m. Until tomorrow, here's hoping you make a great living and live a great life.