Wayne is a husband, father of 4, founder, CEO, entrepreneur and author. He's a generous soul, a risk taker and an out-of-the-box, against-the-grain thinker & leader. Over the past 20 years, Wayne Mullins has scaled multiple companies and helped...
Wayne is a husband, father of 4, founder, CEO, entrepreneur and author. He's a generous soul, a risk taker and an out-of-the-box, against-the-grain thinker & leader. Over the past 20 years, Wayne Mullins has scaled multiple companies and helped hundreds of entrepreneurs do the same with their companies. Wayne influences more than 250,000 entrepreneurs annually through his blog, books and training programs, and has personally worked with clients in over 100 industries - from every corner of the globe. Ugly Mug Marketing has won the praises of some of the leading influencers in the business world such as Neil Patel (Founder of QuickSprout + Kissmetrics) and Ari Weinzweig (Co-founder of Zingerman's).
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Ronald Skelton 0:06
Hello, and welcome to the how to exit podcast where we introduce you to a world of small to medium business acquisitions and mergers. We interview business owners, industry leaders, authors, mentors and other influencers with the sole intent to share with you what it looks like to buy or sell a business. Let's get rolling. Hello, and welcome to the How2Exit podcast. I'm Ron Skelton, your host, and today I'm here with Wayne Mullins. Wayne is the CEO of UglyMug Marketing. And we're going to talk about the differences in marketing when you're trying to scale or trying to sell the company or succession and all the different aspects of marketing. So welcome to the show Wayne.
Wayne Mullins 0:53
Thank you so much, Ron, I'm excited for our chat today.
Ronald Skelton 0:55
Awesome. So let's just start with the origin story. Kind of how did you get into this space? How did you end up, you know, the CEO of UglyMug Marketing?
Wayne Mullins 1:03
Okay. Yeah, so it started for me with Zig Ziglar. So my parents gave me some CDs by Zig Ziglar, back one year for Christmas. And Zig have started me down towards sales. Before that point, I never considered sales to be a thing I wanted, but Zig Ziglar or sold me on the profession of selling. And so that point forward that was a pivotal moment in my life. When I graduated from school, the first I got was in sales. And when I started on, I was absolutely terrible. But fortunately, or unfortunately, I'm not sure which I was very stubborn. And so I stuck with it. I kept, kept practicing, kept cold calling, knocking on doors, facing all those things, all the fears, I guess that come with selling, and over time actually got good at this thing called selling. And it was as a result of getting good at that thing called selling that I noticed this very interesting thing happened. My, my paycheck amount was here. But the amount of money I was renewing for the company kept growing and kept getting bigger and bigger and bigger. And the gap between those two numbers kept getting further and further apart. And it was because of that gap growing, that I had this dangerous thought in my head. What if I went and did something for myself? What if I actually went and sold something for myself. And so as luck or fate or you know, as the cards would unfold, so to speak, I decided to leave a really great sales job. It was a corporate sales job, and decided to start a lawn and landscape company. It was the only other skill other than selling that I had. So I'd done that through college and some through high school as well. And so left, the corporate job started from zero. And over the course of a three year period grew that lawn and landscape company into a very sizable company. We came in from out of nowhere. And by the time I exited that company three years later, we had pretty much every major commercial account in our area. And so it was as a result of that growth as a result of that expansion. so quickly that people started coming to me and asking me, how are you growing? What are you doing to scale? And it was from those conversations, that eventually UglyMug Marketing would be born?
Ronald Skelton 3:30
Awesome. So let's talk about how that relates to the acquisition, acquisition entrepreneurial world, you know, in this face, we're buying, scaling, and selling companies or buying them grown them and sell them at some point. And a lot of people, you know, might there's, there's people that might ask, why is a marketing guy on on a podcast about buying and selling businesses? And there's a critical part of the whole process integrated into every step? Right? So let's just, just talk, I guess we'll just start from, you know, a your acquisition entrepreneur, you're out there looking for businesses and stuff. What can a, what can an individual do, or small team do to position themselves in the market space as somebody that should be considered some a as a safe pair of hands? Where a company to land in?
Wayne Mullins 4:25
Yeah, I think number one is the understanding that positioning does matter. another words, whichever side of that equation you're on, whether you're on the acquisition side, you're doing the acquisition, or you're on the selling side, positioning matters greatly. And one of the best examples of this that I can recall, was in the biography about Elon Musk, and I can't remember the exact title of the book. But the author goes into a lot of detail about how when Elon Musk had his company that was x.com and they had PayPal.com had merged together. And they were trying to attract investors to put money into the company. And we're talking, you know, this was way back then. But we're still talking 10s of millions of dollars is what they're trying to get from investors, and the author of the book details, how every single thing that they did was calculated, to impress potential investors into show them the potential upside in putting the money into the company. There was nothing left unturned. In other words, every single detail was carefully calculated in terms of making sure that it was impressive to the prospective investor. So number one, is just the mindset of, if you're on the selling side, what are the things that need to happen to ensure that your business evokes confidence that their sustainability that there's growth that the culture is right, that the systems and the processes, right, how can you quickly communicate those things, and it's often the communication that takes place is ancillary. And what I mean by that is this that this is your of all marketing, but people would rather trust strangers they've never met, then to trust you, or I, as the person pitching or the person trying to sell our thing. And so what we need to make sure we have in place, if we're, if we're looking to sell is all those ancillary pieces, all the places that a potential buyer is going to go look for evidence of our story, right? So we communicate the story of, of the business and of the value of the business through our financials and through all the other methods. But they're then going to take that information, and they're going to do due diligence, right. And so we have to begin looking at the peripheral areas, what are those areas? And how do we ensure that the message is being communicated through those other areas is relevant. And in line with the story we're communicating?
Ronald Skelton 7:01
So interesting is, I don't know if all the acquisition entrepreneurs do this, I'm, I'm assuming they do. But when I'm looking at a company, or somebody gave me a company, you know, standard, you know, you are who Google, Google says you are, you know, of course, I Googled him, I looked at their website and stuff. But I also start looking at their Google reviews. And I started digging down to three, four pages inside of Google, not just the front page, and see what else pops up. Are there any Reddit streams talking about them, there are any, you know, complaints out there? You know, even I forget what they're called. But the sites that where you go bashing a company or whatever, you know, the bad company.com type of sites, I look at those. And it's because the company image matters, even though some of those disgruntled people probably are over, you know, overzealous or whatever, or maybe a little bit too much. But, you know, there's, there's truth in all, statement, there's, there's an underlying problem if you see a bunch of a right, so I can see that you what you're saying is, it's not just, you know, the main web page or whatever, it's not making sure no stone stone is Unturned, what you said. I can see where that would have be a critical part. Let's talk a little bit about the process, right? Guy has been running his business, a lot of the time his business come for sale, ones that we're looking at, they've been in business for 10,15, 20,30. I talked to one (inaudible) about a year and a half ago, they've been in business for 63 years, right? They're third generation. And, you know, had a horrible website had no, they decided one day, they wanted to sell and ended up talking to me. They didn't prepare for the process. Let's talk about that preparation, what you know, what are some of the things that a company that's been around for a while doing what they do, do that the way they do it? And he was expressed successful in their own right, or, you know, what are the things they need to start shifting and changing? If they're thinking about, you know, handing, handing over the reins to somebody else, either through a sale or even succession? Right.
Wayne Mullins 9:06
Yeah. So I would say that there's a difference in approach between the sale and the succession. And the reason is, you're going to communicate to different audiences. And so the most effective marketing is the marketing that speaks directly to the desires, to the frustrations, to the pain points to all of those things to the specific audience that we're trying to convince, you know, whether to buy or to take the reins of the company if we're doing succession planning. And so step one is making sure that we understand what we're after. Because the way you communicate is going to vary based on succession, or sale. So let's start with succession real quick. So one of the things that I think is so important in succession, is that, you know, if, as an entrepreneur if you know that you're building a legacy piece that you want to stay in the family or you want to You know, turnover to employees as an ESOP or something, we need to have a much longer runway to ensure the longevity of that company, because ideally, we're probably going to be promoting or transferring ownership within some way. Right. So it's succession within. And so for us as entrepreneurs, that becomes a longer process, a longer runway of training, of ensuring the values or the values, and they represent the team, they represent the leadership. And we often see it, you know, in, even in big corporate world, where when a leader passes the baton down to the next person, things fall apart, you know, the best example I can think of is GE with Jack Welch. So, Jack, was there a very strong leader, very well respected leader in the business world, you know, and most people don't have a clue who replaced Jack Welch after Jack Welch was there, the leadership was completely different. And so the question for Jack and his legacy is, was Jack as great as we all believe he was, because he did not properly set up the company to succeed without him without his direct leadership. And so for us, I think it's a mindset shift, that, if I'm going to look to pass my company down, you know, handed over that, I have to be responsible for bringing up that next level of leader and ensuring that we don't just leave them in the same state. But I believe a true definition of great leadership is that the next person who comes in is able to actually take it to a place we couldn't take it to ourselves. So that's kind of my, my long spill into, you know, the succession side of that.
Ronald Skelton 11:50
You're right. You know, the I was, when I'm looking at a company, one of the things I'm looking at is, I don't want to be the general operator, so I kind of want to be the chairman of the board type of thing. So my name is not going to be on the org chart, kind of, and I'm not going to be the CEO, right? When I'm looking at a lot of the a lot of the people I work with, on the acquisition entrepreneur side, they're the same, we're not buying something to be the day to day operator. So when we select somebody, there's, there's got to be a communication process to instill confidence in that not even just the market, right? It's also it's also the suppliers and the customers. And there's, there's the employees and everything else as to who this new individual is that's going to run the day to day operations and why people should work with them. And what's important, I think, I think that's, that's missed, like what you're talking about, like Jack Welch and, and the handover. I think a lot of us in the acquisition entrepreneur space, if we're not careful could miss that. Like, you know, when we acquire something or, you know, sometimes, you know, one of the things I like to do is look for somebody at the company that's maybe been a GM or whatever, or, you know, has that has that ability, right? So what's, what's there that people can do to instill confidence in both the internal community I guess, was held the suppliers and the employees and the external customer base?
Wayne Mullins 13:25
Yeah, I think sometimes that when we're ,when we're approaching that phase, I think, by default, because there's a lot of sensitive information, right. So it could be financial information is being passed back and forth. And you know, the new persons getting, you know, maybe, maybe this is a terrible analogy, but maybe it's kind of like when the new president comes in, of the United States, like, I'm sure there's a lot of stuff that they're having to learn having a process. That's confidential information. And so I think that the default is to withhold information. Because it's secret, right? Like, there's things that that everyone can't know. But what I would say is, is the opposite of that needs to take place as well. Obviously, there's things that shouldn't be public, for everyone in the company to see. But I believe a huge mistake I see people make is they don't communicate enough, right? They don't communicate often and often don't communicate frequently enough. They believe that a carte blanche press release email to all the previous suppliers or vendors or whoever it may be saying, hey, you know, we're the new owners, things are gonna continue as they were, we're excited to do business with you. They believe that's enough. And, you know, at the end of the day, it goes back to one word, not one word is trust. So the more that we can communicate with them, the more we can have dialogue instead of a monologue, the more trust we can build. And so thinking of it in terms of, you know, when most people think of marketing, they think of going out to the world to reach new potential customers, things like that. But marketing is about persuasion. Marketing is about influence. And so in those phases in those transition phases, the true work is actually a lot of the marketing work, it's a lot of the internal marketing work ensuring that we're persuading, ensuring that we're convincing, and ensuring at the end of the day, that trust is being communicated.
Ronald Skelton 15:25
You know, the first thing that comes to my mind when establishing trust with a new leader is, you know, not just validation, like, who is the guy, what's their background and stuff, but also value add, continuing to maintain the value of always added to the employees, the suppliers and the customers? But also what, what new value? Can he add? Because that's, that's a fast way to instill trust is, is there new information you can provide the customers is there? Is there something you can add as an increased value? To kind of catch attention to say, hey, this really this new guy's early on this? And that was really useful? I'm looking forward to working with him. What do you think about like doing some type of like, I don't know, information or adding value to the existing base? To build that trust?
Wayne Mullins 16:19
Yeah. Yeah, I agree. I think, you know, in terms of that communication process, you know, anytime there's a change, so whether we're talking about changing ownership, or we're talking about change in leadership, anytime there's a change, there is a loss associated with the change. So when you think about a team, whether it's a core leadership team, or it's all the employees within the company, when that change takes place, so whenever the new leader steps in, there is a lost that takes place in their head. In other words, the things that weren't once were true for us, may or may not be true anymore, right. So my relationship with the former leader, or, you know, the way the organization flowed, or the way we submitted, whatever, you know, forms, or the way we even operate it as a, as a big picture is changing, therefore, there is loss taking place in their head, they're gonna have to give up certain things, we're gonna have to, I don't have as much freedom, I don't have as much direct dialogue with the person in charge anymore, or whatever it may be. But when there is loss, there is always a period of grieving. Now I know that it's we're getting like psychology and all this other stuff. But it is a human, like, if you go study, anytime change takes place, and the way change takes place, there is loss, and then there's a period of grieving. And so what we must understand as the people that are often behind, you know, were the catalyst for the change, that we ignored that grieving process, because we are in a position where we're, more likely, more than likely, we're benefiting from all of this, right, we're in the position of benefit. But we must understand that they are going to go through a period of grieving, it can be an hour, it can be 10 minutes, that they're grieving, depending on what they're giving up. Or it can be an extended period. But that grieving process, if we're not cognizant and aware of it, what it can have, what can happen is it can cause the culture to come down a level, right, we can have a period of grief within the culture of the team. And that period of grief will derail or can derail what we're trying to accomplish, and the trajectory that we were on possibly as well.
Ronald Skelton 18:43
But that happens at a micro level on almost anything, right? If you're, if you're a customer of a company, and you're like there are suppliers or to use for instance, you've been buying something for them for 10 or 15 years, and you haven't you've even if you've only met that CEO two or three times, the second year, they're leaving, what comes right to mind is that relationship and I know the CEO, right, you know, you know, I can think of a couple of different companies that you know, where I'd met the CEO, and later on they retire or whatever. And when you get that, you get that message hey, there's a new guy in your first instinct is like, I hope he's as cool as the last guy, right? Or I hope he can do what the last guy did. So there is that I get that I didn't I never called the grieving before but I can, I can understand where there's this process of, you know, of loss, like you lose that history. You have the customers lose the history they have with the previous owners, the employees, you know, lose that last couple ones I looked at that might be a good thing. You know, it's not always a bad thing, I guess. But
There is that
Wayne Mullins 19:53
I was gonna say I think the the important point is being aware that it's gonna happen, the severity of it. Is gonna, is gonna differ depending on the context of the situation. But the more we are in tune with the loss and the grief, or grieving period that's going to take place, the more we can speak to that with our messaging, and the more we can speak directly to the way that they're feeling, the smoother the transition is going to go. And the more trust capital, we're going to gain in that, in that period of transition.
Ronald Skelton 20:28
Knows, let's go back to that. The owners operating, he's thinking about selling that. And the thing that comes to my mind is that last few businesses I looked at, I go to their website, you know, you know, they've approached me, they said, I'm thinking about selling the business, I've been thinking about it for a year or two. But when I go to their website, or any of their outbound communications, it's still them. Right? If you go to their about page there, you know about the team, there's a big photo at the top, and then there might be one or two other key employees below them. You know, I think, if you're thinking about selling your company, I think there's got to be a shift, right? And who's, who's the voice out in the market space? It should be my mindset is like, when I'm looking for something that I'm looking to acquire, I'm looking for the team to be the center of the focus as suppose to the individual, what's your thought process on that shift that needs to occur?
Wayne Mullins 21:23
Yeah, I, I completely agree with that. I think that, you know, what causes success in the early days of building a business is typically the leader, the entrepreneur, being able to jump in and save the day, they become the hero. And that's not a bad thing is it's what's required often to navigate all of the changes and all of the, you know, relationships with vendors and prospects and dealing with the early days of the team. But I think what happens is we develop that habit. And as we develop that habit, that habit that once served us, so well, can later become a very big hindrance to us, it can become a stumbling block to getting to that next level. And it's extremely difficult, because it becomes a habit, we're not even aware, you know, it's an unconscious thing that we're jumping in and saving the day. And, you know, an analogy that I love to use is the difference between a border collie and a bodyguard. And so, a border collie. I don't know if you're familiar people watching or listening are familiar with a Border Collie is typically the dog that used to hurt sheep or cattle in, it's truly amazing. Like, if you haven't seen it, go go YouTube, it's amazing the way they do this, but what they do is they work from the back of the herd. And they're very quietly steering and guiding the herd where it needs to go. And so for me, that is the analogy of the leader, as they get up in the organization, as they've grown the company, they need to learn to lead from the back, allow their team members to step into the spotlight, allow the team members to receive the accolades and the you know, the attention and all those other things. The flip side of that is the body guard, you know, so in the early days is kind of like a bodyguard coming in and a leader has to plow the path, it has to clear the way for the people coming behind them for the team that they're leading. And so yeah, I completely agree. I believe that, you know, people, when they're looking at making acquisition, they're buying the business, they're not buying you, the personality, the hero necessarily,
Ronald Skelton 23:34
I guess, there is one, like, if you're out there, and you're thinking about selling your business, and you don't mind going the private equity route, they're gonna want you to stay around for a year or two or three anyway. So you know, if that might be some of these guys are trapping themselves as in that's the only path just because there's still center of attention. That's why private equity companies in my opinion, want that CEO round is there. They're wanting, you know, that to continue that relationship. And sometimes that relationships a little hidden, right? I'm thinking about that company was only it was around for 63 years, third generation. You know, dad's still around, I don't remember if grandpa was still around. But you know, the lady run it and the two sisters running it. You know, it's like, what is your dad vault involved at any at all? And, you know, it was like, no, no, no, he's totally retired. But later on, I hear from somebody I know that knew them. Oh, you know, I still go to dinner with you once every two or three months, right? One of the one of the Big Big clients, still goes to, you know, has been doing business with dad for 30 some odd years and still goes to dinner with him occasionally not daughter's running it, but there's still that interaction going on. So uncovering, you know, what the dynamics are at a company and how to make that shift, right. There's a lot to. There's a lot of play here. There's a lot of inside of the due diligence a lot of people just look at financials, legality, you know, legal liabilities, you may be, you know, some people are starting to get smart and look at culture and new the human side of due diligence, what's the culture? What are the team like, but there's also this historic due diligence, like what has been the pattern of communications of marketing. And in essence, going to dinner with your clients every six months, you know, for 30 years is kind of a marketing thing. If you think about it, you're maintaining relationships, you're doing one on one to one communications, you know, it's a personal brand that you're, you're instilling on them when you're when you're there. What's your thought process on kind of uncovering the scope of the you know marketing communications that's happened over the history of things?
Wayne Mullins 25:49
Yeah, I think I think Ron, that is going to vary based on what you're actually buying, you know, some people the acquisition may be about a customer base, it may be about leverage within a vertical or within a niche. Other people it may be about the business itself, or a jump off point into a completely different industry or vertical. So I think clarity around what is it that you're actually buying? Right, so that's, that's an important starting point, I believe, for that conversation. And then once you're clear around that, I think that will shape and sculpt the due diligence that's required, based on that. So you bought up culture, you know, how do you do due diligence around culture? How do you evaluate how do you put a value on culture, and I do agree with you that right now, given the kind of environment, employment environment that we're in culture, is a piece that for a long time has been way undervalued. And I believe based on you know, we'll call it the great resignation, call it whatever you want to call it, that the actual true value of culture is going to become a more and more sellable component, sellable piece, it's going to be a marketable piece of the business. And so being clear about, again, what you're buying that will shape and sculpt the channels, the avenues that you need to do that due diligence within.
Ronald Skelton 27:23
Awesome. So let's say you're running a company, and you're thinking about selling it. There's a story that needs to be created. I mean, there's even there's a, there's even a strategy, where we hold a system in place that a lot of people use, they call it a deal room, where they create marketing materials and create the story of who the company is, where they've been, where they could go. What do you think about that whole deal room? I want to call it story creation, because I don't know maybe there maybe have a better phrase for it. But basically creating the picture of the story of who we are, where we are, where we've been, and where we're where we could go to potentially position yourself as a great acquisition for somebody like myself or another, another company?
Wayne Mullins 28:14
Yeah, I think, first of all, I think that it's, regardless of if you're going to sell or not sell I think the exercise of doing that will bring an owner, so much clarity, about, you know, why they exist, how they exist, what the future could potentially look like, in terms of vision for the future. So even if you're not planning on selling, I recommend the exercise, just because it forces you to put yourself from a different perspective, right. So you know, when you're running a business, the day to day, encompasses so much that it's rare for us to step outside, into, think about it from an outside perspective looking. And so I think the exercise in itself is extremely valuable for any entrepreneur to walk through. But, but the mistake I see somebody make is, they take the time to create, you know, the pitch deck or the story or, you know, whatever you want to call it. They take the time to create this, to write this to draft it to you know, spend a lot of effort around this. But then where I see them messing up is there's no support material around it. And what I mean by that is, you know, if you are going to look at a company, let's just say that, that, you know, I reached out and said, Hey, we're looking to sell, and I send you over kind of our deck our pitch deck on who we are, what we stand for, why why you should care, right? Why you should be interested in us. And then as you start doing due diligence, if you don't pick up bits and pieces that support that story, in your due diligence, then something's going to be off, right? There's going to be some red flags, possibly that come up, or if nothing else, you're not going to believe the story as fully as if you see evidence of what we're talking about in that story. Other places. And so the lesson, I think the important takeaway is this, that if you're going through the process, so you've you've created it, you're in conversation, make sure that in your other marketing messages, you are showing up in that same manner in that same way. And I can tell you from experience, what often happens is, it gets created there in conversations with prospective buyers. But the marketing looks the exact same as it always has. In other words, it's always speaking directly to the prospective customer, it's always speaking to our products or our services that we're offering. And I think there's a whole nother element that's missing. And that is the pieces that support the business itself, the value in the business itself. So whether that's talking about the culture, whether that's talking about the depth of leadership, within the organization, whether that's talking about growth trends, whether that's talking about industry trends, so all of these things, don't directly speak to the people buying the product or service, right, they're not speaking to prospective customers or clients, they're speaking to prospective buyers. And that is a huge gap that I see when it comes to marketing.
Ronald Skelton 31:17
I got it. And now, let's talk a little bit about like, inside of that, inside of that, you know, talking to prospective buyers and a communication. I see a trend, I mean, maybe I'm wrong, but I see a trend where there used to if you go to almost any webpage out there in any business whatsoever, there was always an about us page, and it had the whole team on there. That's not around as much anymore. And I can kind of get it because it's very dynamic, especially right now in the market, people come and go. And it's disruptive. If you've got a bunch of people kind you know, looking at your team and seeing it's shifting a lot. But when, from a buyer's perspective from one I'm looking at there, at some point, I really got to see that stuff. Now maybe it's in your dealroom. Right. But what do you think is the core components that a company should have in their marketing communications, when they're thinking about doing a succession or selling or whatever? You know, what's, what's, what do you think is most important?
Wayne Mullins 32:23
Yeah, I think the first thing that comes to mind is depth of Team depth of leadership, in terms of the strengths within the organization, right, so you talked about earlier, if you go to a website, and you go to the About page, and there's, you know, half the pages taken up by the founder and the CEOs picture. And then down below, there's maybe a couple other smaller pictures of other people that communicates a certain message. Whereas if you, if you are communicating the depth of the team, the experience of the team, that goes a long way, because it's not all again, it's, it's at the end of the day, it's about minimizing risk, right? You want to know, as a prospective buyer, you want to know that the bench is deep, that there's amazing talent throughout the team. So it's not contingent on one or two key players, right, that the team is going to succeed because the depth of the team. So I think that would be a huge piece or component. I think another one that so many overlook, is what is possible for the future, within your industry based on what is taking place in the world around right now. So all that data exists, it's so easy to find the data. And yet companies don't use that data to communicate what is possible for their organization. Number one, the internal communication matters a lot, right? Giving your team the understanding that look, there's so much potential within what we're doing. We have so much opportunity before us like, you know, it's endless the opportunity we have before us, that creates a sense of hope within the organization. The other piece that is somewhat tied to that is the purpose. Why do we exist, the more we can communicate the why behind it as well, the more hope our team has and the more buy in our team has. So team is a huge component, I believe in the communication of that. There's some others culture, bigger picture culture pieces and the trends around our industry. So those would be my two to three top pieces.
Ronald Skelton 34:32
You brought up something very important that why we exist. A lot of the owners I talked to are really concerned about two or three different things, and it's the team like their employees or their employees are gonna be taken care of, are they safe, right? And then the second thing is they created this thing, it's their baby. So there's this legacy thing of, you know, the creative to do something and they want to see that continue it but to be honest, if it's not well communicated right realms marketed, they're not well documented, how is the new owner to continue a legacy that he didn't create? Right? So there, there is, there's got to be some importance. And I guess it'd be a really safe way for, if you're thinking about exiting, and it's important for you to that your legacy, what you created is stands that it doesn't shift much, that it's a key part of your marketing communication. Right, that tells the world, you know, we created this to do X, Y, and Z. And we stand for X, Y, and Z. And so because of that's pretty solid, it's both attractive to new buyers like myself, and it's kind of hard for us to change, right? You know, I come in, and you have no marketing communication, kind of gotta make it up, right? Or I gotta call you back in and go, Hey, why is there nothing saying, you know, you know, what does your customers believe you stand for? So,
Wayne Mullins 35:59
yeah, I think a core component, if you're in the position of looking to position your business to sell, you know, I believe there's some core questions that will help shape and sculpt that for the future. So the first one is just where are we going? Right. So that's the vision piece, like, where are we going? The second part to that is what you were just talking about, is why does it matter? Like I see where we're going. But help me understand why does it matter that we get to that place? The next one would be for the individuals on the team? What's my role in this process? Right? So I know where we're going, I know why it matters. But what is my role in this process? In that is more than just like, Oh, your role is, you know, sales or your role is fulfillment, or your role is customer support, you have to break it down to a level where they understand based on where we're going, and based on why it matters, what role do I play in bringing that vision to reality? And then the final one would just be How will I be measured? Like, what will be the measurement sticks along the way, that ensure that I'm heading the right direction towards that vision? So where are we going? Why does it matter? What's my role? And then how will I be measured in that manner? I think the more succinctly, we can answer that as owners as entrepreneurs, and the more clearly we can communicate throughout the team, what it does, at least from my experience, is ensures everyone is going in the same direction, without the constant need to push and prod and beg, and all the other things, because they see it, they understand it, and they know their role in getting there.
Ronald Skelton 37:41
You know, and there's no fault to the business owners, a lot of the business owners in the market that we're looking at, and that's that, you know, most of us are looking for a business can run on its own. So it's usually 10 or more employees. You know, a lot of people have different numbers, but you know, 500,000 kind of seems to be the lowest most acquisition entrepreneurs look at as far as their EBITA right, or their sellers, discretionary earnings to profit. But if you look at that, that, that smaller company, a lot of those entrepreneurs didn't, they didn't come out of Harvard, or have an MBA or whatever they were, what I refer to often on the show is accidental entrepreneurs, they were able to create a really good widget, right? And like, you know, almost kind of where you came from, right? You were able to do really good sales, and at some point, you went left on I do some sales for myself. And then then he realized, I'm really good at marketing, I probably should start a marketing etc. But it wasn't all of a sudden, I went to school, got an MBA in marketing, I worked for a marketing firm for 15 years I shifted over, you just became really good at something and one element of your business people started wanting it. So you started providing that service to somebody. I would say that companies, at least what I'm finding, and maybe it's just because I'm a nerd, I have a marketing MBA, and I love this stuff. I was a marketing coach for a while. But I would say in that realm that we're looking at probably under the 10 or $15 million a year realm. There's not many companies that have a well developed marketing platform, or what level do you think companies tend to perfect that, you know, you've worked with hundreds of companies over the years? When did they start to really pay attention to both internal communication and external communications?
Unknown Speaker 39:28
Yeah, I would say that, that, that takes place in I'll go backwards here in a second. I believe there's five stages of business. But I believe that, that takes place somewhere between stages three, and four. And I'll just give you a super quick overview of what I believe from observation of the five stages. The first stage of business, I would say is the me stage. So it's about the entrepreneur finding their legs, finding the audience for the widget. The next stage is the We stage. So that's when they're bringing on some team members and they're learning to trust team numbers versus just themselves. The next stage, I would say is the theye stage. And so this is when you begin bringing in systems and processes. In often at that point, there's some things that take place. As you begin introducing systems and processes. Typically, the founding entrepreneur doesn't like those things. Because they're very entrepreneur, they love jumping from idea to idea. And same thing with salespeople, typically, they don't want systems and processes because it's not the way they're wired. And so you run into some friction points at that point. And so oftentimes, what you'll find is that they fall back into the WE stage. So the businesses as they're progressing down, they fall back in because they the, the entrepreneur doesn't want to hear to the systems and processes that are needed for scale and for growth. The fourth stage, though, is what I call the machine. And that is where the me the we and the they. So me as the leader, we as the team, and they, as the systems and processes all learn to function together exceptionally well. And there's no right or wrong, like your business can be in any of those stages and still be successful. The question just becomes, you know, what are you trying to accomplish with your business? Where are you trying to go with your business, and I believe that, you know, the most sellable and the most scalable businesses are the ones who are down there, in that stage, either, either late stage three, early stage four, somewhere in that phase, so they've gotten great, if they're three, they've got great systems and processes. They've got the team in place, maybe they haven't all congealed together yet, right. So it's not operating at full capacity, which is why, you know, great buyers can come in and, and get those things to work so well together in harmony together. And that's when scale takes place. So what I would say all that to say, I believe that, you know, the system and processes get introduced in that stage three. But it's so so important to get to the place, because in terms of valuations, you know, if you're, if you're just a small team, with people doing whatever they want, communicating however they want, there's no clear paths of measurement, no clear paths of you know how things take place, then you don't really have much of a business system or process in place. It's kind of chaotic, and you're probably the glue that's holding it all together.
Ronald Skelton 42:25
Yeah, I was curious, if you had a kind of a threshold where you see that actually starting to naturally occur, I get it, that it occurs when people want to sell because they've been trained that they have to put systems processes and team in place in order to maximize the value of their company. But in the national progression of things like that, I was telling you, the you know, I was talking to a company have been around for 63 years, three generations doing $13 million a year. And they didn't have systems processes, marketing communication, what they just got in every day did business had good sales guys landed deals, and been doing that doing that, that way. And to their credit successfully right there. They've, they've been feeding 50 Plus families for, you know, 40 or 50 of those 60 something years. So as it's not that they're doing the wrong, it's just if they're going to position themselves to sell and make it easier to scale beyond that. I think they're pretty much at their threshold and be honest, that particular company was managing the money side of it horribly, right? Anytime you sit in the same place for too long, expenses start to pile up, I think. But
Wayne Mullins 43:40
yeah, I would just kind of jump in on that and just say that, you know, whenever I sold my first company, so you know, I grew the lawn and landscape company, to a point and then I decided I was going to sell it, I had no clue how to sell a business. So I hired a business broker to sell my company, and I didn't know what would happen. But within two weeks, I had a couple of different offers on the company and sold the company. In hindsight, you know, hindsight is always 2020. But if I'd operated the company just a little bit differently, the valuation the money I received at the exit, would have been drastically different than what it was. And so what I would say is anyone who's watching or listening, find someone who has been on the acquisition side. In other words, find people who have actually bought businesses before, pay them to give you feedback, give you guidance on what your financial financials currently look like in terms of a prospective buyer looking at them. What are the all the other core elements that a prospective buyer is going to look at because that information you can then take back and make adjustments. Because if you do get to the point where you're going to sell those small minor adjustments in terms of the way you operate in terms of the way you Do your financials can make a huge difference in the exit itself.
Ronald Skelton 45:05
So the difference between a good business and a great business, or you know, a average business and a great business is not just, okay, I made extra 100 grand, it's, you know, you went from 1x, if you're just the sole operator, and you're just basically selling the customer list of somebody to two and a half x to 3x, if you're under $10 million a year, and you're running Okay, to maybe four or 5x, if you're just you got great systems or process and awesome team, you can demonstrate to that you can portray a vision of here's where we're going, here's the team that's gonna get you here, here's the track record, they've got so far to show you that they're on the path to get there. Right. Now you can start talking about even if you're under that 10 million mark in a lot of businesses. And forgive me, if you're in SAS, or one of those things, your multiples are way out there, there are some outlying companies, the multiples are just crazy. And, but for the average Mom and Pop, especially brick and mortar company, you can push that three mark up to three and a half 4x, as opposed to getting 1x for your money. So if you're thinking of a company making, let's just say, a million dollars, make the math easy. You went from 1x, you got a million dollar check when you exit to three and a half, 4 million, because you've got everything documented, right? So there's, there's some significant reward for these, these actions.
Wayne Mullins 46:30
And I would say just from my experience of, you know, the, the couple of times I've been through that, but also just from observation, working with clients who were doing lots of acquisitions, or some that have actually just sold, that the things needed to take that multiple from, say, a 1x, to 3x, the things needed are not like drastically different from what you're already doing, it's a matter of making sure that they are well documented and making sure that, you know, people are following the systems and processes. And, you know, they're adjusting the systems and processes. And even from the financial side, I mean, small adjustments in terms of the way that you think about your business, and the way that you think about your financials will make a huge difference. If and when you get to that point of the exit.
Ronald Skelton 47:18
You know, I've seen a lot of entrepreneurs, they've got great businesses, and but there, there so entrepreneurial they're trying to get the next patent and stuff they spend every single penny coming in are not what I refer to as r&d, even if you're like a concrete company or something, there's still research, you're developing, trying new things, try, try new mixes or whatever, no matter what type of if you're a coffee roasting company, you're ordering different beats, but they're spending almost everything that comes in, they don't need to live on, on trying to create the next best thing. There's a shift if you really want to sell it in being able to show that you can retain profits, right that you can, that you, you know that the company is profitable, and not just a innovation engine, right. I'm sure there's buyers out there for innovation engines, but a lot of us that are, are doing this are, are buying something to either sustain life or create wealth for future generations of our families. So, you know, there's a shift in, I, I believe what you just said that there's a shift in how the financials, you know, need to be done. And, and there's a mindset shift to that, too, right? It's hard for some of these business owners, they go from, hey, I don't want to pay Uncle Sam and the penny more than I have to that. I (inaudible) that guy buy and he's gonna look at an average over the last three years. So for the next three years, I got to pay a little bit more taxes so that the numbers, you know, are appealing to a buyer. So yeah, yeah, that's (inaudible). I always there's a question I ask everybody, and I love to ask it. What is one of the beliefs or common myths about your profession and your realm is the marketing space that you really wish didn't exist that you want to debunk right here and now. There's got to be something out there. It just drives you nuts that people believe.
Wayne Mullins 49:07
Yeah, this the simplest one, but the one that is the most common is this, that marketing and advertising are one in the same. So most people, when they hear marketing, or they hear advertising, they think they're the exact same thing. And they're not. Advertising is merely a piece or a component of marketing. Our definition and again, there's a lot of great definition. So it's not like you have to take ours is the right one, but our definition of marketing is your ability to attract into keep a customer. And when we say the word keep, we don't mean just like keep a customer and have them come back for more we mean, keep them and convert them into an evangelist for your brand. And so from a marketing perspective, you've got the attraction side probably already in progress, right? You're doing all these things to attract new people into your business to get them to the point So, my question and my challenge for entrepreneurs would be, what are you doing to keep and convert customers, because that is a marketing function. But often we believe that the customer service function, but it is truly a marketing function. And we live in this world right now, Ron, where, you know, every single person watching this or listening, this has a device like this called a smartphone. And on that one little device, they can in an instant, tell the world or at least their friends, about their experience with our product or service or our brand. And yet, as marketers, we're not embracing that reality. We're not empowering our customers, and our clients to go share about our company and about our products and services.
Ronald Skelton 50:49
Like audit. Now we're, we're about 50, 50 Something minutes into this, I want to make sure people know how to reach you and how to communicate with you. So what's the best way for people to reach out to you?
Wayne Mullins 51:01
The best place is just our website. That's ugly mug marketing.com. All of our email addresses social media channels, all that's right there on the website.
Ronald Skelton 51:10
Okay, I got to ask, how did you come up with the name ugly mug marketing?
Wayne Mullins 51:16
Yeah, common question for us. Despite popular belief, it's not named after me. It's comes from this gentleman by the name of David Ogilvy. So David Ogilvy came over to United States, I believe, is in the late 50s. And over the course of a 15 year period, he and his partner built the largest ad agency in the world, which was Ogilvy and Mather. Still, to this day, they're in the top 10 in the world in terms of size. David Ogilvy had this thing that was, I would rather an ad that's ugly, and defective, over one that's beautiful, but isn't. And so the name ugly mug marketing is really just a play off of that quote. And for those listening, they may not really understand our industry, the marketing industry, but in this industry, Design Awards, creative awards, all these different awards, run the industry. So you know, all the agencies are competing, trying to win these various awards, because you know, it makes them look good. They can track clients. But for us, it's our North Star that says, Look, we don't care about making something beautiful, if it doesn't get results.
Ronald Skelton 52:22
Awesome. I appreciate that. One of the things I always asked everybody on the show is what can we do for you, man? As a listener base for myself, is there? Is there something out there you you're working on or something out there you would like us to share? Or what can we do? What can we do to help you move your business forward?
Wayne Mullins 52:40
Yeah, I mean, for me, you know, kind of where I'm at with my business, and with my company, we're in a great place. We have an amazing team and amazing culture here at ugly mug marketing. And you know, what I would say to each person listening is this, the thing that would bring me the most joy and helped me the most is for you, to begin documenting your journey. Because in hindsight, when I look back at my journey that I've been on as an entrepreneur, there were so many important lessons that I now have missed out on or that I didn't take the time to document that I wish I had, because I could take those lessons on number one, I could share them with our team, right? So they don't make those same mistakes, or that they are able to do things much quicker than I did. So what I would say is, even though it's not directly for me, I would say that it would bring me great joy for people to spend a few minutes every day documenting what lessons did I learn today, because those lessons will get passed down to other people. But if we don't take the time to document them, they'll get forgotten.
Ronald Skelton 53:48
Awesome. Well, uh, you know, I appreciate having you on here. And what's the let's listen on this topic real quick. We had a couple of minutes that we can use here. What if, if you wanted somebody to remember three things from the show? What would you want them to remember of you? And what you've said?
Wayne Mullins 54:05
Yeah, I would say number one is that whether you're going to sell, scale, or you're looking at succession, that at the end of the day, very much every piece and component of that is about marketing, and you cannot market clearly if you don't clearly and definitively understand the audience that you're speaking to. So number one, get clear about your audience, whether that's internal or external, and craft those messages that support that. That will be the first thing. The second thing would be this, that as entrepreneurs who are listening to this maybe business owners who are listening to this that you do have the ability to drastically shape and transform the valuation that you get from your company. And oftentimes, it's a matter of making minor tweaks and adjustments. So I would encourage you to find someone who has been on the other side of the table, someone who's made some acquisitions, pay them If you trust me to be worth far more than you pay them, pay them to give you like an audit, like if you pitch to them say, Hey, if you are looking at buying our business, what are the red flags? What are the things that you think we can make adjustments on that will return significant, you know, ROI from you in the long run? And then the final one is this that, you know, at the end of the day, that business is often about story. So it's the story we tell ourselves, it's a story Our customers tell it, you know, about us. Our, our employees or team members say about us as an organization. So make sure that you're documenting their stories, make sure that you're documenting those lessons. Because if not, they will be forgotten with time.
Ronald Skelton 55:42
Awesome. I appreciate having you on here, man. It's been great Wayne. Anything else you want to add before we call it a show?
Wayne Mullins 55:49
That's it. Ron, thank you again for the conversation.
Ronald Skelton 55:52
That has been fun. Time flies, man. It's our early getting close to the top of the hour. So let's call it the end of the show. That's it. Guys hang up for a few seconds afterwards. And we'll chat. Hey, it's your host, Ronald Skelton. I want to thank you personally for watching the show today and invite you to call our new hotline 918-641-4150. That's 918-641-4150. Call us and tell us about our show, ask questions, suggested guests or even tell me about a business you have for sale and we'll reach back out to you. Again that number is 918-641-4150. Call our hotline leave us some information. Thank you. The investors and entrepreneurs professional mastermind. The investors and entrepreneurs professional mastermind combines that additional peer to peer mastermind introduce first in Napoleon Hills famous book Thinking Grow Rich. With accountability partnering, where your peers help you ensure that you set goals take action and get results. If you want to scale blow past roadblocks and achieve success faster than you might think is possible, I suggest you take a visit over to tiepm.com That's T i e. P m.com. And check out the investors and entrepreneurs professional mastermind.