E172: Jerome Myers Discusses the Founder's Exit Paradox and Planning for Business Exits

[00:00:00] Ronald Skelton: Hello and welcome to the how to exit podcast today. I'm here with Jerome Myers. Man, I am excited this conversation. We have some similar backgrounds. You play real estate in a bigger game. I play the residential side. You're helping people exit. I'm passionate about doing that right. And we're both in the kind of intrigued by human psychology and stuff. I think this is going to be a wonderful conversation. Thank you for being here today, man. 

[00:00:22] Jerome Myers: Ronald, it's so good to be with you, brother. Thanks for having me, man. This is exciting. How2Exit.

[00:00:28] Ronald Skelton: This is going to be fun, man. You have a wonderful background. I want people to kind of bond with you. Know who you are, where you come from, where your heart is.

So let's start with your origin story, man. I always joke around, say you were born and now you ended up on a show about mergers and acquisitions. How in the hell did you end up on my show? 

[00:00:44] Jerome Myers: Man, through good faith, evidently two people thought enough of me to recommend me to come hang out with you. And so for that, I'm really grateful.

I had a corporate career and, in our framework, there's eight exits of a founder and most of us start by exiting corporate America. And so my last job in corporate America, I built a $20 million division of a Fortune 550 company. I was employee number two on January 13th. By the end of September, we had 175 employees. Into the year, we did $20 million in revenue with 30 percent profit margins. 

And my reward for that was a phone call on December 24th at 4:55, and it went something like this. Hey, Jerome, you and I've been going back and forth about this for a few weeks. I made a decision. We're going to lay half the team off. No, no, we're not going to lay half the team off.

That's not the right idea. That's why we've been going back and forth. Hey, Jerome, I called to inform you of a decision. Not to have a debate or negotiation with you. Yeah, I hear you, but this isn't the right decision. Hey man, look, it's Christmas Eve. I'm going to go spend the rest of year with my family.

I'll talk to you in the new year. And then the three beeps that you hear, if you have an iPhone. And I was like, Oh. My. Or, what do I do? This is a 2009 came and went, I wasn't impacted. I saw some people impacted, but that was kind of my understanding and knowing of what laying people off was. And so here we are in the end of 2016 or the end of 2015, where I've gone from, a guy that had $0 in my business.

To one that had a, what most would consider a really big business. And I got to go through and pick the people who were going to, no longer be with us after they helped me create those results that we created. And so,I didn't sleep. I didn't eat. I struggled. It felt like it was a very traumatic experience for me.

And we get to the new year. We put Humpty Dumpty back together again after laying folks off. And we get to November, right before Thanksgiving, and I realized the same thing's about to happen again. And it was at that point I decided I was going to exit corporate. And so, I leave corporate and I'm like, what am I going to do?

Because I didn't really have a plan. I just knew that I wasn't going to do that anymore. And what I decided was, I'm going to go buy an apartment. Now, I thought that I just picked the apartment. I take the deal to the bank. I have my business plan. They would give me the money. And the first thing they asked me was, well, what experience do you have?

And I said, well, I'm an engineer and I've got my MBA and I'm a license, I just caught it running down all the credentials, Six Sigma black belt. And he said, yeah, that's great. But what have you done? We want to know that you've done a project of similar size. And similar budget. And I said, I got nothing for that.

I've been running engineering projects. And so fast forward, and we end up in a space where I learned after 10 banks, that nobody's going to lend me a million dollars to do my first deal. And so I was like, okay, what can I do? And what ended up happening was I ended up fixing and flipping because if they can do it on HDTV, everybody else can do it.

The stoop of one of my flicks and flips house it was a 1920s building. It was a $70, 000 rehab to put things in perspective. Biggest job I'd ever done. And a guy pulls up in a white Dodge Ram and he's like, Hey man, love what you're doing. I want to walk through because we're getting ready to do a house down the street.

And at this point, Ronald, I'm like, Oh man, somebody finally recognized the work that we're doing. This is a big deal. And we get there and he's walking through. He's like, Ooh, look at a gooseneck sink in the Island. And you did a period correct French store and you made a master suite in a bad bedroom that didn't have a master suite.

And he's getting ready to walk out and he stops in the threshold. He says, Hey, do you know anything about that apartment building behind the Chimbo Mart? I said, the Chimbo Mart? The 23 unit apartment building? He's like, yeah. I was like, yeah, man, I tried to buy that a few months ago. And the bank said, I need a partner.

He's like, Oh, well, that's interesting. I'm getting ready to make an offer on it. I said, what? You're the guy I've been looking for. Like the last banker I talked to told me I need to find a partner that had experience so that I could actually get a deal done. And they were like,what are you going to bring to the table?

And he asked me that three times. And I couldn't articulate what I was going to bring to the table. And so he left and I was like, Oh, well,this is a Wednesday. So he'll call me on Friday. We'll get the deal done. We're going to be partners. Ron, I didn't know his name. I didn't have his phone number.

I didn't know what house he was working on. And so the weekend came and went the next week came and went and no phone call. So I thought I blew my big shot. And what ended up happening was a buddy that I lent money to as a corporate professional who was doing rehabs got the call. He's like, Hey, I have the opportunity to be the contractor on the building that you mentioned.

I was like, Ooh, that's cool, man. He's like, but I told them I'm only willing to do it, if you're a part of the deal. And so I got back in man. And so that was my first M&A deal, right? We bought a business. It just happened to be attached to real estate. And so I happened to be the asset manager there.

And then, for we do more deals. And then I get the epiphany, I'm like, man, if I can do this in real estate, what if I just had a regular operating business, right? What if the operating business was one where I could do it all that I want to do in order to double the revenue, increase the valuation and be able to sell that?

And so I made a pivot, man. I started working with business owners and the whole goal was to help them double or triple their income. And that looked different for people depending on where they were in the spectrum. But, I wanted to help them create a double in the recurring revenue. And then I had the biggest epiphany of my life, man.

It was, I'm helping people grow. They're getting their new recurring revenue. I'm taking a fee and they're continuing on with a very valuable business. A much more valuable business than when we worked together. And they would say the things that I was seeking when I got back into it. Hey, Jerome, I don't know if I could have got here without you. Man, you really opened my eyes up to what was possible.

But I didn't really feel like I was their partner. And so we started working with people and from a partnership model where we helped them grow and we work with them on, from a partnership model, from the standpoint of getting compensated on the upside. And helping them figure out what's next when they actually get their business to a place where they're ready to exit.

[00:07:15] Ronald Skelton: Awesome. So,now you're at that stage where you're actually working with business owners who are early in the process and start thinking about it. Do you still help them scale and then exit or?

[00:07:27] Jerome Myers: Yeah. So the longer that we're engaged, the better off we feel like the founders are because, being exit ready, isn't something that most people are actually thinking about. 

They kind of get a wild hair and they're like, Ooh, I'm gonna sell it. Or they get fed up and they're like, I'm gonna get out of here as quick as I can. And none of those things position the business optimally for their exit, right? They're not going to get the biggest valuation. But what's a bigger issue from my perspective is their mental health is going to be negatively impacted in a way that they can't even imagine when they experienced what we call the founder's exit paradox.

[00:08:00] Ronald Skelton: We're going to get into that here today in a little bit. This circle back around the, the owner in these situations. A lot of times they, I get this call every once in a while or I get somebody email me. Hey, I've decided I want to sell my business. Can you point me to the right person? I was like, cool.

What's your timeline? ASAP. I was like, yeah, you understand this is a three to five year process, right? Now, if you've run everything perfectly, hopefully like, by chance, have you ever read, read the book, built to sell, or like, I list a lot of books off and like, have you done this?

Or you've done that? Do you already have your deal room ready? Have you cleaned your financials and had them clean for the last three years? No, no, no. I was like, okay, then it's a three to five year process. They ask, why? And if the answer is because that's what buyers want to see three to five years of your tax returns and your financials and like the company's growth and all this other stuff. And if you run it like most businesses are on it, you're living on the income, right?

You're trying to minimize taxes. You don't have your best foot forward. And so I get that, that the longer engagements are possible. I wish there was a miracle cure for that, but there isn't. The market demand is we want to see certain things when we acquire things, so it's a safe risk reduction, right?

A safe bet, which means that the owners have to plan this stuff ahead of time. 

[00:09:17] Jerome Myers: Yeah, they do. And the intentionality of having a true exit plan, is something that people get rewarded for. Even though a lot of people are squeamish about making the investment in the beginning. 

[00:09:28] Ronald Skelton:It's interesting one of the other side effects is of this is, and you might've dealt with this when you said you were helping people scale and everything.

There's this,I call it the, trade my car in kind of, uh, situation, right? You get ready to trade your car in, you take it down, you get it detailed, you get it clean and polished and waxed and you start driving it a lot. And like, man, this thing's not so bad, right? It runs good. It smells good.

It's nice. Why am I going to trade this thing in? I don't want another car payment. And then a lot of times you turn around, you never trade your car in. I've done it a couple of times, right? You just keep the, now that the car's looking awesome, shiny and new and feels good. You're like, I don't need another one.

I don't like car payments that are, I don't even want to, I don't want to empty out my bank account and write a big check for this car. That happens same thing as some of these businesses. So that's one of the reasons I'm concerned with like doing a contract for equity and that type of stuff.

Because, the equity side of it pays off when they exit. But if you build it, build it well, and they do it right, and you're really prepared to exit, the owner doesn't have to be there all the time anymore. Now he kind of sits on the board of directors and gives direction and vision, but technically he could go away for two or three months to come back and it should be running better than it was when he left.

[00:10:35] Jerome Myers: Yeah. We hear those stories from time to time. And, you know, for me, having the equity is just a symbol of us being true partners. At the end of the day, we, that's why we combine it. It's fee and equity. Because I mean, there is a significant investment of time and intellectual capital for people to get the outcomes that they want.

Now, with that said, it's really funny, right? Cause most M&A professionals, their focus is on consummating a transaction. And we want to get as far away from that as possible because we are very interested in making sure that what's best for the founder is the course of action that's taken. And I think that in and of itself makes us a little bit different from other folks.

[00:11:20] Ronald Skelton: Yeah, it is. Cause, you're nicer than I am. I have a tagging, I have what they call a tag, I nickname it the tag and drag clause. If I come in and work for equity on you, I can tell, like as a certain period, it's in the contract, it says it very clearly. 12 months, 18 months, whatever we think the project looks like.

I can tag you, which means I'm going to bring out somebody who can bring an outside person in, to come bring in a, do a valuation of the company. And I can drag you to a closing table, we can sell this business or you can buy me out at that current valuation. Whatever the fair market value we get.

So if I bring a competitor or somebody in and we've got a legitimate LOI on the table, you can pay me out my shares of that valuation and form and concrete offer. Or, you can sell the company. I call it, I don't know where I got that name tag and drag. But,we can tag, we can tag, you know, tag, you're it. We're selling this thing. I worked the last three years for you. Otherwise I don't want to spend the time.

[00:12:09] Jerome Myers: Well, I mean, you got to make sure that you get compensated, right? If you create a true value and I think some people misunderstand what that truly is, but if you're creating a true value for a owner like, for them to keep it tied up and prevent you from getting the rewards for your labor is just unfair. 

[00:12:28] Ronald Skelton: I'm probably a few years older than you too. So I'm like,I do this 'cause I enjoy it. I love it. It's not a game for me though anymore. Like I, it is a game and it's not.

I played a win. So if you want, you know, and I'm 51 and I don't have as many spare years left on the other side of this beautiful rainbow here. I look at this as like, okay, if you want three years of my life to change this, we'll do that. But I'm getting paid. We're doing this together where I'm going to create some value for you.

We're going to, we're going to change this thing around, but we're both getting paid out of this. And at the last second, he's like, I'm going to keep it and milk it for another 20 years. Man, that's I don't think so. 

[00:12:59] Jerome Myers: Unfair. That's not our deal. 

[00:13:01] Ronald Skelton: No. And it's cool. I mean, so far,I just haven't really put, put those offers out too much.

And a couple of times I put them out, we, we had an arrangement where, we got in, we did what we're supposed to do and they bought me out. At a current, I think I just tell them. It's a lot cheaper to buy me out today than it will, if you follow the point, cause all of them buy me out early.

It's like,it's a lot cheaper to buy me out today than it will be to buy me out you know, eight months from now, when you finish all the rest of the steps that we put together in this plan and we get to where we're going, right? Because the market valuation for a lot of these small brick and mortar companies is 2x, 3x, 4x, 5x. 

You're mediocre run now, 3x is fair. We get to the end of this plan. You got everything else. You're gonna be worth 4 or 5x. What do you want to do? And your revenue will be up. So we'll see. I don't actually go out there and actually seek that type of stuff. So right now I'm kind of, because I told you earlier before the show started, that we're this, we're doing this digital nomad thing where we move around. I look for things that can run remotely.

So most of my acquisitions are in the realms of newsletters, B2B blogs, content type of stuff that are profitable, service companies that service those type of things that are already fully remote. So I just, I had a deep look into a podcast guesting service. Didn't go for various reasons, but uh, yeah, that's, that's the kind of things I look for now. Is I can run it from anywhere.

I can be sitting here or, six months from now, we can decide to sell the tiny and go sit in Barcelona, Spain for a while. That's the life we want to live. So let's go into this paradox thing. What did you call it again? 

[00:14:33] Jerome Myers: The Founders Exit Paradox. 

[00:14:34] Ronald Skelton: So what is the Founders Exit Paradox? 

[00:14:37] Jerome Myers: Yeah. So the way we think about the Founders Exit Paradox is, it encompasses the, all the mental health and wellbeing issues that people go through when they make the transition of letting go this thing that they've put so much time into.

For some people, they do it for 20 years. So think about sending your kid to college, but you know that they're never going to come back again. Or think about, having an animal that's been a part of your life for a long time, and now they finally passed away. The difference though, is you have all of those, icky, yucky feelings, but it's brought on by something positive. 

You just got the biggest check of your life, right? Or wire. You've got more money than you've ever received, but yeah, everything's not okay. And that's why it's a paradox. Most people will look at you like you're the luckiest person alive.

But at the end of the day, you've got all these feelings of like, you might be questioning, do you even deserve it? And so we identify six centers of doubt that people go through on the backside. And, the whole goal here is just to make people aware of what is going to happen on the backside of the exit.

And there's different degrees of intensity. But everybody's impacted in some similar way. 

[00:15:52] Ronald Skelton: A lot of these founders, they sell their business and they run out and either create another one and like, they don't realize they still, the numbers are still the same, right? It's still got a 95 percent failure rate in the first X number of years.

So they either found another, or they go buy something that was smaller and less, revenue generating than the one they just sold. And I get it. I mean, I've done it, I guess. But a lot of, a lot of times they're doing that because they don't know what to do next. They're like, okay, when they wake up and go, what the hell did I do now?

So I have, I have two different things in that realm, right? Like, I get a lot of guys that come to our network and hang out and say, Hey, I just bought this company. We're trying to run it. And I was like, ah, so you're in that cool phase. I like, and what's that phase is that? And I was like, I bought it, you bought it now what?

You're like, I finally closed this deal. Now what do I do? Right. Cause they spent all this time and energy and gathering knowledge on how to get a deal done and they got it. And if they hadn't been an operator before, now you're just in, you're wearing a new hat and it's a different game.

Same thing goes as like when they sell it, right? You've got this routine. You wake up every day, you check your, the news you put on your socks and shoes, you shave, you shower, whatever you do, and you go and sit in your office. You have that cup of coffee. You say hi to Nancy at the front desk, all the different things you do.

And it's all gone. All of it. It's all gone, right? That new owner doesn't want you coming in and hanging out with Nancy at the front desk no more. That coffee that you guys, get typically you get it in from some local distributor that distributes the businesses only. You can't go to Walmart and buy it.

So now you got to turn into a coffee, right? Everything changes in their life and they don't realize it until that day after. Like, Oh, you know what the hell? 

[00:17:27] Jerome Myers: Well, and I mean, let's not start talking about their friends. Right. So part of this is the identity, but the people that they spend the most time with.

Those folks are gone. We've talked about the work, right? The thing that they're doing on a day to day basis, they sold that. But there's some other things that I think come up around like health, right? Did I give up my health in order to build a business? That I spent too many years of my life working a whole lot of hours, can I make adjustments that I need in order to have fewer health risks on the front side?

Prosperity, like they have the money now. A lot of times people aren't able to take a whole lot of money out of their business, and then they get the big check and they're like, Ooh, I can afford it now. But I got second thoughts. I've lived frugal for so long. Or I don't want people to know I have any money, so let me just hide that.

And as a resource allocator now, since you have the money to actually allocate, who do you go to for advice on allocating such large percentages of money? And then this is the one that I think gets most people and it's what we call, significance. If I die today, who would carry my casket? 

It's my favorite question to ask people. Who carry your casket? And they say something generic like my family. Yeah, but who in your family? And then I turn in and say, what if you took this event and use it to create a life and a legacy so profound that people fought to fight to carry your casket?

What if you created a life and a legacy so profound that people fought to carry your casket? What would that feel like? What would that look like? And most people have never considered anything like that, but if we're able to get them there, then I think a whole new world opens up because now they're not chasing that next buck.

They're not buying that new business because they see that it makes money. They're looking to solve a true impact on the human condition. And I think that's what the most talented people are best equipped to do. 

[00:19:32] Ronald Skelton: I get that. So inside of that, inside of the concept of, what happens if something happens to you and stuff? There's a risk that a lot of these business owners own, because they don't know what they're doing next, right?

They're sitting in that chair. They don't know what they're going to do next. I've talk to more than one business and more than probably 10 or 15 business owners, that was referred to me by somebody like maybe the wife wants them to sell. Or you know their buddies are brokers and hey, you got to talk to this guy. He really needs to sell. His wife wants him out of the business. You get him on the phone, they're like, I don't want to sell. All my buddies died within three or four weeks of selling their business.

But, the other thing is, is I, I, so it made me realize, I did a survey of my own life. I was like, okay, who are all my friends? Where did I meet them? What do I know them? So most of my friends that I still know now, I know about three or four guys I went to high school with.

And they're not people I hang out with all the time because they're just not in my, that's not, that's just not what they do. They drink, do things I don't do anymore. But they're good people. I'll go fishing with them or something when I'm in town. And then there's a group of people I was in the military with, because I was military.

And we talk on the phone, we rarely see each other, about ten years, every ten years or so we'll be in the same space. I just move with them about, probably about two hour, three hour drive with one of my best friends from the military. And I haven't seen him. We've been here for a year and I haven't seen him yet.

So we'll eventually get up there. He's I'm in, about three or four hours away from here. Then there's everyone all the rest of the friends either work for me or I work for them at some point in my life. They're all from work. 

[00:20:57] Jerome Myers: Yeah. Deal friends is what I call them, right? There's deal friends and there's real friends.

And so you talked about the real friends kind of the people from past lives. And they aren't gonna actually improve your life in any real or meaningful way. So it's just kind of like what's the rush to spend time with those folks. And then the deal friends are the people who are usually just in proximity to you.

And you work in the same place, you do a deal together, et cetera, et cetera. At the end of the day, though, there's five people that you spend the most time with. And those five people that you spend the most time with have the biggest impact on your life. And it's not so much the people that you spend the time with, but it's the expectations of those people that you spend the time with.

And so, if all of your friends are holding onto their businesses until, they die, then you're probably going to do the same thing. If you think that you're going to die as a result of selling your business, you probably are spending time with people who feel that way. At the end of the day though, that doesn't have to be the end. 

You don't have to continue to work that company that you put so much time and energy and effort into. You can actually be rewarded for it. Here's the thing that I don't think most people get. Your wealth, so much of your wealth is tied up in that business. And if you don't harvest that wealth in some way, shape or form, then it's just going to die in the business because eventually the business is going to go to zero if you don't have an exit plan.

[00:22:22] Ronald Skelton: Yeah. I did a research thing once and there's only like three businesses that made it more than a thousand years. Ever. One of them was a pub. It's still around the day, but it's in, in family hands. And the other one made it until I think the eighties or nineties, it made it 15 or 1600 years.

It was a, I want to say hospitality, like a bed and what we would call a bed and breath. Just, I think it was in Japan or something, but it made it through generation after generation. Family, turn it over to the kids, family, turn it over to the kids until, no, I think it was, sorry, it was a, uh, they did, it was a construction. They built temples.

And it was handed family, over family, over family until I think the eighties or nineties and they got financial trouble and had to sell finally. But there's an exit like there's only, in the history of mankind, only, I can only find maybe two or three businesses that made it more than a, than a couple of hundred years.

If you look at, if you like, what's the oldest businesses around? So it's going to sell, right? There's an exit plan. You may be in it or not in it, but there's an exit plan. 

[00:23:24] Jerome Myers: Yeah. I mean, the fact of the matter is it's very much like death. That is the end of the road, right? The business is going to exit.

There's going to be some form of exit from the business. And so if you choose not to plan for that, I think you're being a little immature. Right. I don't think you're being very responsible because this is a thing and you can stick your head in the sand like a, or stick your head in the sand like ostriches do, but I don't think that that actually changes anything.

In fact, it's probably a disservice to the people that you say you love and care about because they're going to have to deal with the mess. And so I think it's, it's imperative that even if you don't want to sell, that you get your business sell ready so that if you need to sell it, you can and you can sell it for something meaningful.

Imagine putting all of that energy and effort into the business and then because you don't want to sell it, you set it up for a place where you took all of this time, you made people separate or, sacrifice so that you could invest, to continue to grow the business. Only for them not to get anything on the backside of all of those sacrifices.

[00:24:34] Ronald Skelton: I think each of us have our own life experiences. It doesn't make sense to me not to plan for something like that. My mom lived to be 55. She had a massive heart attack and didn't make it off of a surgery table. I was here in California at the time. This I lived here once before. And I flew back to try to, spend time with her and she passed within hours of me getting there.

And then less than 18 months later, my dad got diagnosed with terminal cancer, checked himself out of the hospital and refused to do treatment. I quit a six figure job, moved to Oklahoma. Again, that's how I ended up in Oklahoma. To try to help, spend as much time with him as possible. Maybe get him to do treatment.

And he didn't make it out of the first chemo treatment. He actually got a bad infection. The fingerprint thing, they check your blood for potassium stuff. He had a, got an infection from being poked in the finger by a diabetes like test. 

So it can be sudden. Like a lot of people don't understand you get hit by a bus, right? Just because you're 50 doesn't mean you got 20 more years, right? You could be 20 and have 20 days. So I think everybody ought to have a contingency plan. A key man, policies, insurance, stuff in place, the things that happen to.

Secondaries, able to log in. Like my, my family, my wife has nothing to do with any of my businesses, but she can log into every one of my bank accounts, right? She's on a signature. She's on the signature authority. She can write, she can sign any of the checks for me to those bank accounts. And it's just a backup mechanism. 

[00:25:55] Jerome Myers: I think redundancy is core, right? It's core because we're not invincible. And I mean, what if you get sick? What if you get hurt? Like there's so many different options. And people, I never forget this, man. Somebody said the more valuable you are to your business, the less viable your business is.

[00:26:14] Ronald Skelton: I've seen that before. It's beautifully stated. It is that is beautifully stated. The more valuable you are to your business, the less valuable your business is. The more you do every day, at your business, the less valuable your business is. It needs to run without you. That's what we're looking for as buyers.

From as a buyer in this space, I'm looking for something that I can put a, any operator in that the standard operating procedures are documented. Everybody there is well run, well managed. They know what they're supposed to do. They have great ideas on how to expand. They know their job. They know what needs to be done.

And be honest, most of the cases, the owner's the one holding them back. A lot of these business, you can get your hands on and you sit down with these people, you have even wanting to do X, Y, and Z for a couple of years. Here's all the research we've done on it. You know, can we try it? And, you can see businesses really grow and flourish after the owners, who may have been tired.

And just one thing, I know the cookies taste good if they're cooked this way, right? And they've been that way for 30 years. Why would we ever change them? Because the market's kind of a little weary about sugar these days. We probably should have a sugar free option or whatever. I honestly see There's so much there, right?

You got to respect these business owners. One of the things that bugs me about the buyers, people in my space, as we go in and we go, we're going to X, Y, and Z, and we're going to change it. We're going to grow it by 50 percent every year over here. I'm like, really, dude? That guy's been running that business for 30 years.

He knows everybody in the industry. He knows everybody in town. He takes them fishing and on golf trips. This one guy took, you know, took his top customers every year to an Alaskan fishing trip. You think you're going to come in and do more business with those people than that guy did? 

[00:27:55] Jerome Myers: Yeah. More than he knows 

[00:27:58] Ronald Skelton: Because you got your MBA and he doesn't.

No, dude. no. So I get it. And you need to have that, what's the word I want to use? Eternal optimism. Entrepreneurs have eternal optimism. We're optimistic no matter what, right? Come hell or high water, we think we can solve it. And we have to have that to be in this space, but it can get in your way. What's the process that people need to go through to kind of get over this, what do you call it? Seller's paradox or the owner, 

[00:28:23] Jerome Myers: Founder's exit paradox. 

So here's the thing, right? You're going to go through six levels. And this sequence is, it's actually sequential, you don't run them parallel paths, but you got to work through your self image. So do you have an identity outside of your business?

If you don't, then you're in trouble, right? Then there's relationships. You're going to start evaluating and questioning, why are these people in my life? And what value are they adding? It's just a fact of the matter. So we need to take inventory of that beforehand and make sure we understand who's going to go with us on the other side.

Once we cross through the proverbial golden pass. Then, it's like, well, what are you going to do on the backside to keep yourself stimulated? And I call it inspired work. Most people want to do something. They want to contribute in some way. And that is through the things that they do at work. And so how do we redefine and reposition that? The next level is health.

There may need to be a pause so that you can really focus on your health. If you're a stress eater like me and you gorge on sugar when things aren't going well, you probably end up with a little extra body fat. You probably end up with some aches in the joints and there's some things that you can do to keep your stress low, in order to make sure that you'd stop doing those self destructive habits that are negatively impacting your health. Cause the goal here is to really enjoy the journey that you're on. The goal isn't for you to just get the money and then die, right? You want to have, you want to age well, you want to live well.

The next level is prosperity. So you have the money, but what do you do with it? Do you even have a healthy relationship with it? I see a lot of people who may have 10 figure, I'll say eight figure net worth and they're worried about if they're going to end up back under a bridge. Not that they were ever under a bridge.

They're just worried that they're not going to have the money anymore. And so they're scared to enjoy any of the money. They're scared to invest it. They're scared, they just want to hold on to it. And the fastest way to, eliminate your wealth is to be scared that it's going to go away. You, I think you make a whole lot of mistakes and putting money under mattress and a high inflation environment is probably a terrible idea.

And then the last one is a significance play. And so what are you going to do to make a positive impact on the world? We've all been placed here to do that more than likely the business that you built is not, the business that you are going to be in. Or it didn't solve a problem, right? You did it because it made money.

And so now that you don't have to solve the money problem anymore, you've actually achieved the American dream of financial freedom. Then what is it that you're going to do? And so what we encourage people to do is look for a problem that they want to eradicate. Some people, you mentioned some two, two really touching stories, right?

Maybe there's a indicator for so that people don't ever have massive heart attacks. Maybe they know that they're at risk. That tests are the finger prick test. Maybe you want to eliminate or eradicate that. And it could be so many different things. I know people who are building schools and, parts of Africa.

I know people who are setting up education programs because they feel like education is the only thing that keeps people from being able to transcend whatever class that they're in today. To me, it doesn't matter. What matters is, the fact that they want that problem to be gone. And if they look back over the course of their experience, they will find that they've been uniquely positioned to be the person to design the organization that actually gets that problem solved.

And if done well, you hit level eight or exit eight, where you can have a fully endowed foundation, so that the people who are running the organization don't have to run around and raise money because you left enough in order for it to continue its mission. 

[00:32:18] Ronald Skelton: Interesting. I like that. The thing that comes to mind is,when my mother in law, she just passed away this last year, when she passed, she had created, like really built out this, the professional organizers associations and stuff. She's one of the first ones out there and she helped people with,she had a business called Exit Stage Right. And one of the things she did is she helped people with intellect transitions. Like all the stuff that has to happen. How to prepare it? Life insurance, all that.

She had this big, long workbook. Well, one of the things she did is she created a small endowment that kept her website up and all her downloads and it's there. So from now on, the courses that people used to have to buy when she was around and she would go speak and teach. It's there, people can download it and use it.

And, it's just, it just, it's going to stay running for as long as any of us can, long as there's servers up and running. That thing is paid for to, to be there. There's money there to take care of it and keep it running for people. It's just her gift to, to the people.

And that would be a cool thing to do. And she, there's other things that she did really into this. One of the cat, cat charities here. She took care of them, make sure they were taken care of, right. 

[00:33:22] Jerome Myers: I think the only thing that actually gives our life real meaning and allows us to create real happiness is service to others.

You can do the hedonistic things. You can buy the cars, the watches, the houses, go on the trips and drink the finest alcohols and eat the finest meats. But, at the end of the day, that stuff is going to wear off in relatively short order following your indulgence in them. And so if you skip over happiness level two and you go to happiness level three, it's all about service and doing good for mankind.

[00:33:55] Ronald Skelton: And a lot of people get that sense of that from their business. They feel their business is fulfilling a need. Even if it's not a charitable one or whatever. They feel they're creating something in the world. That's making a difference. They're helping they're creating a widget that turns, that helps farmers farm and the farmers feed people. 

They have a logic built in their head as how they're, what they do impacts the world for being better. And then now it's gone. So there's still, that's one of the things I ask is like, do you feel fulfilled now in what you do? A lot of business owners at this point in their life, they just no longer feel fulfilled by what they're doing.

Like, cool. I get that. I can understand what's going to fulfill you in the future. Like there's the Japanese model I like, it's like what it called Ikigai or whatever. It's basically what are you good at? What does the world need? It does have the, what will they pay for and that type of stuff in there.

But I still think you can find a strategic balance inside of that Ikigai model for even a charitable organization. Just because something charitable doesn't mean that it's not earning income. A great charitable organization earns enough money to fund its own mission and get stuff done. 

[00:35:01] Jerome Myers: Yeah. And I mean, we totally believe in that concept. The, we've tweaked the ikigai model quite a bit because we, we want them to have a scalable community. The goal is for this thing to be able to grow as big as they want to grow it. Versus, just, Hey, there's this little thing and that allows this problem to continue to be something that they can work on. Like, I think Bill Gates is working on eradicating polio or something like that, right?

It's just such a big, hairy, audacious goal that gives you something to work on. And, at the end of the day, as long as you can see that you're making progress, you have the chance to get closer to happiness. 

[00:35:44] Ronald Skelton: Rotary International started that process many years ago. Bill and Lenny Gates funded, started giving Rotary to the cause and then call it theirs, right?

Sorry, I was a Rotarian for a little while. Rotary's been doing the eradication of polio for pretty much the whole time that they've been in existence. Buying, raising money, buying vaccines, all the members pitch every year to buy the vaccines. And then Bill and Melinda Gates came in and said, okay, we're going to chunk this huge chunk of cash to it.

So I think in most cases, even still to this day, the money they pump into it, Rotary International distributes to the hotspots. There's the ones that fly the doctors out and get the vaccines. Which is both good and scary. That vaccine is very dangerous. People end up crippled and stuff because that vaccine, it's got a, it's a dangerous vaccine.

But if you're in an area where you got your patient polio, you basically, take a chance. It's going to cripple me or I take a chance. I'm going to get really sick and pass and need, an iron lung all my life. So it's a bad situation. 

[00:36:42] Jerome Myers: But how cool is it for the progress that they've made? Just the thought of taking on something that big is, I think phenomenal. But I mean, when you have big resources, you can tackle big problems, right? If I got a backhoe, I can do a whole lot more than if I got a shovel. And if I got one of those big old boys, you can do a whole lot of movement of, soil if you, if you want to.

[00:37:06] Ronald Skelton: So let's talk about like, how do people work with you? What, I mean, what is it that I know you're doing, you have the real estate business. Now you still have that going to, or is it just exits? You got both the real estate business and this exit advisory. Saying how do people reach out to you if they're thinking about selling their business?

What does that look like? Kind of, what's the process to work with you and your people? 

[00:37:28] Jerome Myers: Yeah. So they would go to the exit paradox. com and we've got this free white paper that they can get that really explains what they should expect to experience. And whether they work with us or not, our goal is awareness of the problem.

We see too many people experiencing this and getting blindsided by it. And then making permanent choices for something that's a very temporary, circumstance. And so,what the process looks like is, well, first we figure out if we can help because we can't help everybody. And we look for specific problems and specific indications that one, we're going to compliment and make each other's lives better. Because if that isn't what can happen, then we'll refer you to some other folks.

And then the next thing is just going through and seeing what we need to do if you're on the front side of the exit to get exit ready. And then. Actually helping you navigate that process of exiting. And I mean, for us, this is a long term engagement. We want to create so much value that you never actually want us to leave.

And so then we get to the exit and all of the ups and downs. If you've been through this, this is a big deal. The ups and downs of that journey can drive you crazy and lead you to deal fatigue. And if you don't have anybody to talk to, other than the person that's pushing you to get it closed, I think you can up in a space where you get really uncomfortable and then you do something like sabotage the deal after you put all this time in. And then sabotaging the deal, you might be cutting your nose off despite your face.

And, some people don't want to hear that and they get into ego talk and so on and so forth. We'll move out of that. But then assuming that we get to the backside of the deal you consummate it, you get the wire, you get the check and you're looking and you're sitting and you're starting to experience the six centers of doubt. Self image, relationship, work, health, prosperity, significance.

We help you work through that. And the whole goal here is to make sure that you don't go too deep in the hole, right? We want to kind of level it out so that you come to the other side and we've already got the thing identified that answers the question, what's next or what now? We've already talked about, is it really worth it? 

And what was it all for? And so now we can just really double down on what we're going to do to make it so that people fight to carry your casket. And we just help people work through that process. And, in the end, if we do this right, it's a very smooth transition into post exit life or what we call NEOs, Newly Exited Operators.

And those NEOs are out there operating in the world, in the way that they imagined when they first put the thing together. Or at a higher level than what they imagined when they first put the thing together. I don't think anybody gets into business because they want to work a five to nine schedule when the chief everything officer. I don't think anybody wants to get in business and not be able to drive the vehicle they want to drive or go on the vacation they want to go on or live in the house that they want to go in. 

And now that we've actually gotten to that place, we don't want you to be scared to actually do those things. And then there's this other thing that people get really uncomfortable with, which is resource allocation. And so the ability to evaluate alternative investments in case they don't want to put their money in a stock market. Talking about ways that you allocate to places like philanthropic interests, and just really helping people get clear about those priorities, because that amount of money for a lot of people can be scary. 

And you know, we want you to make great decisions so that you're not just trying to hold onto that nest egg, but you got some cashflow coming in. Even if you don't have to show up in order to generate that cashflow. 

[00:41:04] Ronald Skelton: I talked to a gentleman earlier today that, he's had two exits that were fairly significant. And on the call, he mentioned, he kind of did something in passing. 

He was like, Hey, if we do something together, it'll have to be, some type of equity or whatever arrangement. And he goes, I'm broke. And I was like, well, I thought you said you had two exits and stuff? Like, yeah. Live through COVID, did this travel, live in France. Did you know, you just like learn to listen to all this stuff.

And now I'm trying to figure out what to do next. And I was like, Yeah, I was like, I'm thinking, I'm wondering how many of these business owners have what I call the lottery effect, right? They're young, they have an exit, they've always wanted certain things and they just go get that and the next thing you know, it's gone, right?

And maybe they won on their first or second attempt at business and they think they're just going to go start a new one. And they don't realize that that was a nominally, right? There's still a 95 percent fail rate. He's going to have, you know, somebody said, why don't you start another business? You've had some successful ones.

I was like, cause you don't, I don't tell you about all the bad ones I had to get to those successful ones. Right. I don't tell you how many businesses I started within six months going, Hey, I'm not, I'm probably, nobody wants this thing. I don't want product market fit. I don't tell you about the online dating site that I spent nearly a million bucks getting up and running of my own 401k and every dollar I can get and investors, only to find out nobody wants to be kept honest in your profile. 

So for somebody to think, oh, that's fine. It's just, if I use up all the money, I'll start another one. I think they're sadly mistaken in that it may not be that easy. There are some people that just, they have a golden touch. They just, they can do one for you 

[00:42:34] Jerome Myers: They're few and far between, rIght? Market conditions have to line up. Like, I mean, there are so many things that have to happen for you to get in flow. For you to build that seven, eight, nine figure monster that people are actually out here hunting.

[00:42:48] Ronald Skelton: So people ask me, why are you looking at buying businesses? Like, cause it's, I think it's a lot easier than building them. Right. You already has product market fit. Already has the customers, already has great employees. It's not yours to figure out, it's yours to mess up. And to grow. So you have a choice.

You just, you either going to mess it up or you going to grow it? But it's already there. It's already a machine. It's already churning. So how do people reach out to you, man? What's the way to contact you? What, your LinkedIn profile? You want to give them that? Or if 

[00:43:13] Jerome Myers: So on LinkedIn, I'm Jerome Myers and we've got almost 19, 000 people hanging out with us on LinkedIn. And the other place to go again, if they want that, free, white paper we put together, the exit paradox. com. 

[00:43:26] Ronald Skelton: Cool. Oh, one last thing. If somebody can remember only one thing for the show and they walk away from this hour, we've been chatting, and they can only think of one thing. What would you want them to remember of our conversation? 

[00:43:38] Jerome Myers: On the backside of your exit, you're going to have a bunch of feelings that don't feel good.

It's completely normal. It's called the founder's exit paradox. And our goal for you is to make sure that you don't get blindsided by that. So that you will actually enjoy. And so if you can get with some professionals and get some coping skills to help you navigate that event, you can have a very exciting post exit life.

[00:44:09] Ronald Skelton: Awesome. Well, thank you, Jerome, for being here today. Truly an enlightening conversation and I appreciate your time. 

[00:44:15] Jerome Myers: Thank you, my brother. Grateful to be here. 

[00:44:16] Ronald Skelton: Cool. We'll call that a show.