How2Exit Episode 56: Cliff Spolander - Serial Entrepreneur, CEO, Advisor and Author.

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 How to exit.com Today I'm here with Cliff Spolander. He's a CEO of business by design in the UK. It's the UK's leading planning and advisory company. He's also the author of the smarter exit a growth and exit plan for your business and the author of the cashflow code, six keys to unlocking your ultimate cashflow. Thank you for being on the show today, Cliff.

Cliff Spolander  0:53  
Thanks for having me.

Ronald Skelton  0:56  
So you're over in the UK. I'm appreciate you being on here. It's 9am in the morning, where I'm at what. Where are you at right now?

Cliff Spolander  1:03  
Just gone quarter past five in the afternoon.

Ronald Skelton  1:06  
Okay, well, let's just start with like, kind of get to know you, man. Like, I always joke around and say, Hey, you were born. Now you ended up on my show? Like, can you fill out the gap in between? How did you get to be a business advisor?

Cliff Spolander  1:18  
That's a great question, I suppose. On the very beginning, I'm, Im from South Africa originally. And I suppose the whole journey kind of started for me back in November, probably in 1989. And we were at the airport, saying goodbye to my dad. And we had my mom, my brother, my little sister, my grandparents were there. And he was going off to fight. He was a pilot in the Air Force. And he was going off to fight and go because we were at war with the Cubans and the Russians at the time. And at that time, when I say goodbye to my father, my mother said to me, Look, say goodbye to him, because you're probably not going to see him again, He's going on a three month operation, which meant that he may not come back. And as I saw my father walked down the concourse, I realized that, you know, I'm on my own, really.  The last thing he said to me was no, cliff, you are now a man of the house. You need to take care of your mother, your brother and, your and your baby sister. And at that point in time, I think it was nine, I realized that life is quite lonely. No one's got my back. And I had to grow up very, very fast. I then ended up joining the South African Navy as a weapons officer and get my stint there before resigning and then moving to the UK. Then I started my, my kind of my career as an entrepreneur,  where I've started,  bought and sold several companies, I franchise, one and licensed another in five countries. And through is, is, probably 22 years, I've realized being in business is a lonely place. You feel like you're on your own, no one's got your back. Very few people know you understand the journey, the process, you're going on the journey you on. And so there are times like I felt back in 1989. When you, do you feel all alone and by yourself,  And so, and so began my kind of journey of wanting to help owners with, with their journey to make sure that they understand that, that not they're not on their own, that there are people around you understand you can support them and, and work through the process, the process and, and the position of, of going through, through business. And so that kind of led me to going from own companies, and then working with, with owners themselves in helping to strategically grow. And then to hopefully, at some point in the future,  exit successfully.

Ronald Skelton  3:55  
But I joined the military was Air Force. So did Air Force Intelligence, about five and a half years. And then I let went to the private sector, worked for the government in the private sector for a little while. But yeah, we have a similar thing. And I get the lonely, loneliness of an entrepreneur. It's very common, that I want to pick up the phone in the middle of a call somebody these are. All my friends are either entrepreneurs, and they're busy with their own projects, right? We're not in the same company, or they've got a job and they can't answer the phone. They say, man, you know, I've got one or two military friends that are kind of semi retired and I can call them but usually they just don't understand because they're not entrepreneurial. Right. So it is, it is kind of a there's a little bit of isolation. And even if you've got a company of 100 people, there's some isolation to the fact that you just can't take every issue to, you know, random employees or even friends that have worked for you for 25 years or so. This is a lot of times it causes, you know, some of these issues you need to deal with and work on, like extra planning. That's a very interesting topic when you're, when you've got employees, right? You can't go and say, Hey, I'm thinking about selling this thing. What do you guys think? You might, you might get some feedback on that, or some people leaving?

Cliff Spolander  5:12  
Not completely. Yeah. When it comes to exit planning, a lot of people want to keep quiet about that. Because yeah, employees can be positive or it can be negative, and you just don't know which way it's going to end.

Ronald Skelton  5:13  
Right. So let's talk about that a little bit. I know the topic is, is something you care a lot about wrote a book on, like Exit Planning. So in your vision, you know, let's talk about exit planning as a business? When should a business owner even consider that? Or? Like, what is the process that you want to see entrepreneurs take on in the realm of extra planning?

Cliff Spolander  5:50  
Well, I think from my perspective, exit planning is just simply good business strategy. That's all it is. It's, it's how you grow a business and grown in such a way that it attracts the, the right buyer should it be selling, or it allows you at very least, to exit successfully. That's all exit planning really is. And an owner, I believe, and this, this is from my own personal experience, is that you should stop planning your exits the day the company starts trading. Failing that, the next best time to start planning your exits is right now. There and the reason why I say that is because none of us here knows what's around the corner. Know we could be hit by a bus tomorrow. We just don't know. And unfortunately, I have seen this firsthand where when owners approached me looking to wanting to buy their businesses because they've had a heart attack or stroke or they've been diagnosed with an illness. And they have to leave the business, business pretty quickly. Unfortunately, when I do look into the business, it's a mess. The financials are everywhere, the employees are miserable, the clients are leaving, basically the company's unsellable. And in most cases, I can't help those people. So they then have to exit and face the financial consequences of closing the company down or whatever the case is, rather than, than actually focus on dealing with the illness or dealing with whatever personal circumstances that they find themselves in. And so my real motivation is to make people aware that this Exit Planning is something that will happen to you, whether you want to or not. It's just a question of how to best prepare for that. And every company is different, every person is different, every situation is different. So you need to have a process that is that gives you structure but it's also flexible enough to deal with your personal circumstances. And so my real motivation is to help owners get to that point where they are exit ready, so should the unforeseen happen, and I hope it doesn't, but shouldn't happen, they are best prepared to deal with this.

Ronald Skelton  8:04  
So I get, you know, I used to. I've been I've only been doing this for about two, two and a half years now. Just took the Evergreen away from this podcast show. But uh, the I've, I've valued probably looked at and probably evaluated more companies and most people that have done this for a couple 10 to 15 years, mainly because I was involved in a giant roll up and we evaluated almost 200 companies in a short period of time. And we just had a really good offer. People were lining up to take it. And anyway, that said, I honestly think that the a lot of the elements that people need to have to run a great business to prepare, like you say run for exit, to run it as a fairy exit, is the same thing that takes to run a good business. A lot of those elements, when people hear them, they probably shouldn't be doing them on a daily you know a daily basis anyway. So let's go over your kind of what is your meet somebody? And they're like, Hey, I've got, I've got this business. I might sell it someday. What's your advice? To my where do they start in running it to exit?

Cliff Spolander  9:12  
That's a, That's a great question, Ron. Basically, when I do meet people, where they're wanting to exit in 5,10, 15 years, as a material, what I'm finding is that owners really struggle to understand exactly where they are in their journey. And and so I've broken this whole process down into three key plans, you have your business plan, you have your personal plan, and you have your financial plan. And they both look at different aspects of the owners life. And as you can say, it's like, it's like three legs of a stool. And in order for you to create balance, or three legs have to be looked at and have to be of equal importance to create that stable platform. And so what I do is we undertake a value assessment that assesses how sellable a company is and also how attractive it is. Now, attractiveness is really what a company looks like. On the outside, it's what a, a buyer tends to see looking at just without doing any DD, is also how the companies will trade to a customer. And then business saleability, what a company looks like on the inside. That's when you start to scratch the surface. You look at the finances, look at the risk element within the business. So we need to make sure that both the attractiveness and the saleability are saying the same thing. because all too often I see very attractive companies on the outside. But as soon as you start to dig, dig the surface a bit, you find them a complete mess. And then on the personal plan, it's really understanding how prepared the owner is from now until when they exit. So, are they prepared for any unexpected life events? That could be divorce? It could be illness, it could be death, unfortunately? And also, are they prepared? If somebody were to knock on their door and say, Hey, I like your business? Can I buy it? Are you prepared for that. And then also, part of the personal plan is understanding what they are going to be doing once they exit the business. Because many owners I'm finding that they work 40, 50, 60 hours a week in their, in their business, and they exit through selling or through whatever means. And then, all of a sudden, Monday morning comes, and they've got all this massive spare time on their hands. And they don't know what to do it themselves. And also find that owners tend to when they work in the business for so long, they, they identity starts to be wrapped around the company. And so the company is now gone, they don't know who they are. And so they kind of float around without any sense of purpose. And this sometimes leads to making really bad financial decisions, sometimes could even affect mental or physical health. And I've seen owners sometimes even get divorced over it, where the, the wife is completely sick and tired of seeing this husband walking around doing nothing in the pajamas all day. And, and so they, they want a better life. And unfortunately, some owners even afford to take the take their own life on the worst case scenarios. And then it's the the financial plan is to know how much money do you need to retire in order to live the lifestyle you want without the fear of running out of money? No. Do you know that what that number is? Because the, the owners I speak to don't know what that number is. They said they want to retire at 65 or 60. But as I say, right okay is fine. How much money do you have now as much money will you need at 60, 65? And they don't know they have some ballpark figure? No, they don't quite know. But you need to understand exactly what that number is. Because in that scenario, you have one of two situations. The first one is the owner works within the business and looking then looks to sell or exit. And they think they have enough money. But when they, when they do that kind of financial assessment, they realize that those short the wealth gap hasn't been met. And so they have to either pay back their standard of living, or actually not exit and continue to work until they can afford to exit. And equally sad is that owners who don't measure this sometimes close the gap years ago, but they continue working in the business thinking they need to have more than what they really need, when they actually could have exited 5, 10 years ago and enjoyed that period of time with their friends and family. And so it's looking at all three plans, in, in unison in harmony with each other, and how they all feed into each other. That creates a successful exit. So I, I try and, and look at the whole whole process in analytics fashion.

Ronald Skelton  13:45  
Let's talk about the there's you're at that stage, you're thinking about exiting stuff, but it's not where you want it to do you actually have the cash flow code, which is unlocking cashflow. That's one of the main factors. Profits and cash flow are the main things people are buying when they buy businesses. Everything's done off of some valuations or multiple or some calculation based off of that. So if you're starting to think about this and you want to maximize that, what are your can you give us those six keys? Do they have to have the book? I mean, can you share that with us today?

Cliff Spolander  14:18  
Oh, definitely share it with you. And the reason why I wrote that book was I read the book in 2019 or 2020, I think it was and I wrote a book from the understanding of what I would have loved to have had in my hand 20 years ago when I first started out in business.

Ronald Skelton  14:18  
Right

Cliff Spolander  14:18  
and the, the reason for that is our we call them accountants in the UK but I think you guys call them CPAs I believe you know, they all they did for me was do my tax return. And my, my BAT, they did nothing else. They didn't help me in any way, shape or form in terms of how to grow my business, how to evolve my business and help you to understand in what's going on financially, for me, I hadn't got a clue what a balance sheet was or why it was there. I understood the p&l as the bottom number. If that was positive, I was happy. That was negative bit of an issue. But that's the sum total of what my experience was. And the whole thing came about when I spoke to my accountant said, Look, we are really struggling on cashflow. You know, we you say we profitable, I think we were, I think we were 8% net profit. So we were small business, but we were profitable. So what do we need to do to sort the cash flow out, and he said, Well, you profitable just grow the business. So that's what I did do, I got a marketing guy who, who loves cold calling, I hate cold calling. So I gave it to him. And he grew the business by around 20%, I believe, in about two to three months, which was great. We went accelerating, we hit massive targets, we were really, really happy. However, a few weeks later, I was seeing my cash flow take a massive nosedive. And that really stumped me I didn't understand why that was, was my, my simple understanding of business and you buy something for a pound or $1, you sell it for $2, you've got you know, 50 P or 50 cents in expenses. So you make yourself 50 cents of profit. That's my sum total of understanding back then, I didn't realize that you can look at your balance sheet properties, you don't need you understand debtor days, if you understand credited date, stock days, you understand your expenses, your cost of sales, all that kind of stuff. And what I did inadvertently was look at the top line, which was a sales and increase that without actually first going into the balance sheet, and sorting out my day to day because I thought I was getting paid 30 days after the date of invoice, but actually when looking into it, I was in paid 55 days, whereas I was paying my suppliers 27, 30 days or so. So I had a massive cache, which I wasn't aware of. And so by increasing sales, all I did was make this gap worse. And so I had to then make a decision do I fight this because my bank balance was getting less and less and less automate payroll at have to pay suppliers. And so I had to make a choice. Do I continue fighting this fight and understanding what cash flow really isn't how it works? Or do I give up and get a job. Luckily, I stuck around for (inaudible) but got through it. And so I wrote the book to help owners understand what cash flow is how it works and also created a cash flow simulator which will help predict what your cash position will be like in 12 months time based upon your current set of financials. And that's free to use on my website. So that all came about in looking at what I would want as a beginning entrepreneur in my hands. And so yeah, the six keys are the first one is debtor days, which is your accounts receivables, credited day, stock days, expenses, cost of sales and sales which is the final and six key

Ronald Skelton  18:09  
So I'm trying to match those with us terms. I accounts receivable I get it right? You guys have a different phrases for some of the stuff. Would you happen to know the US phrases for those?

Cliff Spolander  18:21  
It could be accounts payable for credit today's stock inventory days? Or work in progress? And then expenses.

cost of sales? 

Ronald Skelton  18:32  
Yeah, okay. (inaudible) one of them that you said that you cleared it up, like which ones it accounts receivable,  which one is accounts payable. And it just in the, in the moment, I was like, Wait a second, we're using different terminology here. Like, very common is somebody who say turnover, when I'm talking to you guys in the UK here when we say turnover is people leaving the company. Your turnover is like your I don't know what you call it. It's your number of employees, like if you have 100 employees and you lose three this month, right? That's your turnover? Like how many employees or you've turned it over to where it's (inaudible). What you're using the phrase turnover for is revenue here.

Cliff Spolander  19:11  
That's right, yeah. employee turnover. Yeah, we call it employee churn. And then revenue or sales or turnover is for revenues or top line.

Ronald Skelton  19:22  
Let's talk about, okay, we've, we've got a company, we're up and running our accountant out there. And that's the number one reason that business books look like crap, to be honest, is you're only paying your accountant your CPA to do your taxes. Right. And a lot of CPAs and accountants,  that's all they know how to do. bookkeepers and stuff. They just know how to they, they haven't. They've never been a controller they've never been in, in company accountant. And I think that's a mistake. It's not a mistake to have a great person who is expert in taxes. I think it's a mistake not to have a CPA or financial adviser that knows This is what goes out of balance sheet. This is what goes on the income statement. Here's how you do cash flow analysis, I think, you know, I, I talked to over 200 plus businesses at last year and probably 40 or 50 this year so far, just been going a little slower because of the move and everything. And I'm surprised to how many business owners that are doing million, 2 million, 3 million a year in revenue don't even know what a Class Cashflow Statement is. They understand the word cashflow, but they can't tell me what it is. And, you know, and it's important,  like one of the guys like oh, no, everything's cool. How do have, how do you understand your cash flow? Or cash flow? Do you have a cash flow analysis or anything? He's like, No, I don't know why we need that. And so the quicker we get a little deeper into it, I was like, Okay, you doing really good right now? Is there any time of the year that really slows down? He goes, Yeah, I know, by I forget what the date was, like October was just makeup on, because I forgot what he said. It was so October, by i know by October 1. If I don't have 400k in the account, to pay all my employees for the winter, I'm in trouble. Because it gets real slow, November, December, sometimes in January, and then we start picking back up. I said, that's the importance of your cash flow analysis, you need to see what's cyclical, you know, what's coming. So you know, like, you know, that walking in the door, as you've been here for 25 years, but (inaudible) it was 23 years. I said, I wouldn't know that walking in the door, because you haven't done the analysis to show that to me, was, you know, we stumbled upon it in conversation, which is great. But for anybody that's running a business day to day, especially if you're running an early business, not knowing your cash flow cycles is, is extremely dangerous, right? And, and maybe it's the trial by fire, it's one of the lessons you're gonna learn fairly quick, if you don't already have it done.

Cliff Spolander  21:46  
I learned, and that's why I wrote the book, because I don't want people to go through what I went through.

Ronald Skelton  21:53  
Right. So tell me a little bit about your, your advisory, like what is it that you do on a day in day and day in day out? Do you buy companies to or do you primarily advise,

Cliff Spolander  22:08  
I initially look to, to acquire companies because I really enjoy kind of buying, doing an app and selling it off. I love it. I bought a demolition company back in 2014. Sold it in 2019. So I love it. I love doing stuff new. I knew nothing about that industry anyway, so there'll be a good, good.

trial.

Ronald Skelton  22:26  
 I want to do, Just I don't want to tear shit up, right? I've been looking at demolition companies like they don't know anything about the industry. He's like, Yeah, but I get to tear things down right, like problem with it. That would be as I'd find myself in the backhoe wanting to tear down the building, at least once or twice. So I ever I used to I came from the real sorry, I didn't mean to jump into this. But I came from the real estate world. And I have a friend who has a backhoe and some other stuff. And I told him what I see, you know, if you ever have to tear down the house with that, if you can give me I can run anything I grew up on a farm, I can run any piece of equipment that you can imagine, show me where the controls are, give me 10 minutes in the middle of an empty field. And then I can, I can control it. And, you know, I've, I've run backhoes and skid steers and stuff like that. But I said you don't have to pay me for the day. I'll just come over just let me tear something up. Right. So I, I think, I think when you said you about that, that's I was actually looking at that history for a while just (inaudible) I think it's kind of a I don't know, it's the childhood fantasy. Like just like playing Godzilla and turn things down would be fun.

Cliff Spolander  23:24  
Yeah, I thought that idea. Then when I got into it, I realized then it was like in the US but the UK health and safety isn't that. So you kind of go tearing things down, unfortunately, even though I wanted to.

Ronald Skelton  23:37  
So you were you, you bought that? And what how did you get into the advising side?

Cliff Spolander  23:42  
I've been an advisor for about 12, 14 years already on and off so (inaudible) to do is to at least practice what I preach. I don't want to be a consultant you just pure consultancy, I want to actually be in practice and actually do it myself. So I've been on an off advisory throughout my last 12, 14 years. But when I sold the demolition company, I actually really enjoyed the whole process of buying and selling and being very strategic in that. And so I went on a bit of an acquisition spree and I spoke to a couple of 100 owners looking to exit of which I made no acquisitions. And that's because the companies were either unsellable. They weren't ready for exit, the owner themselves weren't ready and the valuations that were placing on the companies was ridiculous sometimes 63 times ebita, which is I couldn't even mathematically work it out. So it's so I got frustrated with having these conversations the more the same conversations over and over again with these owners. So I thought, What did , what have I been doing all these years that allowed me to buy start, grow a company and exit it without too much hassle? And that was really distilling what I was doing and that's having a business plan, a personal plan, a financial plan. I knew where I was going with all three plans, and I and I executed it. And so that led me into, I think these owners need help know that I'm seeing too many owners either looking to sell but can't or they have some personal problem they need to deal with it health, whatever the case is, and they need to exit and I can't. So I kind of distilled what I was doing down on paper and built a methodology around that. But the same time I was working with accountants or CPAs. And I think with I don't know, what's it like in the in the US, but in the UK, the government's making tax digital, which basically means that when it comes to your compliance, so your tax return, your VAT returns, things like that, that's going to be pretty much automated. So the need for an accountant is going to lessen, although there will still be there. But the it's to be more of a commodity based product rather than I need your services sort of thing. Following that, though, I have found bookkeeping to be an absolute disaster, people are not keeping accurate books. So when we run reports, you get garbage. And so we need to make sure that I think the baseline (inaudible), the foundations of any business is bookkeeping, that needs to be 100%. Correct. So that we can have viable reports to make viable decisions. And so it's working with accountants to really stop being accountants, and be the clients trusted advisor. Yes, you do the compliance stuff, you tick the boxes, but your clients need more help. So they need to make sure that the bookkeeping is correct, and nominals are correct, everything's coded correctly, so that when they do the reports, they get valuable data from which the owner and the accountant or the advisor can make proper informed decisions. And so that is what I'm doing, I'm really working with accountants to help work with their clients in a very structured, orderly fashion will reverse the TG ik focus fashion, so they can help their clients grow and exit successfully. I'm also working with owners themselves directly because I enjoy that kind of interaction where going into a business, see what it's like, help the owner, understand where they are, and work out a plan to help them achieve their goals. So, so I'm working with owners directly, but also working with accountants to help them stop being basic accountants and start to be a trusted advisor.

Ronald Skelton  27:27  
A lot of that. So I had caught something in that conversation there that you said that your taxes are going to digital, and they're kind of automated. And instead, he didn't know how it was in the United States, I kind of smirk in that because we love our loopholes here, and our politicians happened to be investing, usually in investors, and business owners themselves. And I won't say that I won't go as far on my live show to say that all of our politicians are corrupt. But I highly, highly doubt that we ever do anything that is like a flat tax and automatable and stuff, just because, you know, the people running the show here, like their loopholes, and like their ability to avoid things and, you know, outsmart everybody. So there's ego play of like, you know, they're always saying billionaires here that don't pay their taxes. And this is because we have so many loopholes, there's so many write offs, we pay, they pay taxes, they just pay payroll taxes and stuff like that, but you can avoid even the biggest companies can avoid, like, you know, a lot of what people think corporations should be taxed at here. And so I just kind of smirk when he said like, I don't know if the United States is you gonna automate it and like, yeah, not until we clean up our politicians. This talk about I mean, that world of your businesses, your books is absolutely foreign or alien, or just to most business owners, right? Like I was talking about earlier, the accidental entrepreneur, they know how to make a widget. They know how to sell a widget. Nobody showed them how to get books, how do they make that transition? Like how did they? I mean, I know number one thing probably hire somebody, but like, how do you hire that person that knows? How do you know if you're that guy that only knows how to make the widgets and know how to make the sale? How do you know somebody knows keep the books, right? I mean, 

Cliff Spolander  29:19  
well, 

Ronald Skelton  29:19  
what, what do you look for.

Cliff Spolander  29:22  
well, that's what I'm trying to fix. As when, when you starting out in business, you don't know what you don't know. And you stick to what you're good at, which is making those widgets which is fine. When you talk showing spreadsheets and numbers, some people go blank, other people love them. The horses have courses. I think this is where the accountancy profession should step in because (inaudible) in the UK, you have to have an accountant to sign the books off. So accountants have access to those clients, as the question of do this accountant actually want to step into the advisory space and actually offer high value to their clients. And it's again, it's, it's an education piece. So either in a perfect world, the accountant will be very forward thinking very upfront. And look, I can be your, your counselor problem, but you realize it also offer advisory services. So I do more than just your compliance stuff. Or you do, what I did is you make mistakes, and you'll learn the hard way. And you realize, actually, you know, there's a lot more to business than simply making widgets. So I want to make sure that owners get educated. So my (inaudible) books, hopefully will help do that. But also, I think, to get best, and the most traction out of the whole thing is to train up accountants who are forward thinking, who want to stay on the front foot, to assist their clients in a very proactive way. Like I say, stop being the accountant, and be the trusted adviser. And I know what some people aren't great for finances, it's absolutely fine, thats where the accountant or the CPA should step and say, Hey, this is how we do it. And this is how we need to create your books and goes back down to bookkeeping. And most accountants don't really like bookkeeping, they form it out. But I think bookkeeping is the foundational part of business, if you don't have clean, clear books, clean data to work from, you, you can't get proper reports or decision making done. So it's really about educating accountants to accelerate this whole thing. So they can be the trusted advisor. But at the same time, I want to get a message out there to all the entrepreneurs that it's more than just making widgets, it's, it's a lot more (inaudible). This is, this is a vehicle to fund your dreams. This is a vehicle to see you into retirement, potentially, or vehicle to see you to your next project. So we need to make sure the vehicle is running as smoothly and as efficiently as possible. And so, yeah, education process, I don't think it will happen overnight. But being on your show, for instance, hopefully what you're doing is also educating people as well. So hopefully, with all our combined efforts, hopefully, people will get educated.

Ronald Skelton  32:03  
lets take as from another angle. I'm an entrepreneur, and I jokingly refer to myself as the, you know, the standard greedy capitalist pig. But uh, it's in joking. It's what creates jobs and stuff. But there's an opportunity here, if you really look at it, right, there's a lot of businesses out there that are just not sellable. By most buyers standard. I recently had somebody on the show, who is kind of a forensic CPA and he has a service of, you know, you give him a messed up set of books, and he'll put it into something to order he can clean that up. So my thought process here and I'm looking at some of these, instead of just turn away everything that just has ugly books, is, is there a diamond in the rough here? right. I know last year, during the big roll up, we were doing marketing agencies, we turned away some because they're just there was a mess. Right. And they were profitable, it looked profitable. But he just couldn't tell where things were going or money was, you know, ain't enough, you know, owner was using the account as a personal bank account kind of thing. If it's profitable, it's (inaudible) product, the market shares out there, they've captured the eyes of the consumer, they have a loyal customer base, you know, there might be an opportunity or they're i think, I think there is an opportunity here to say, You know what, I'm gonna go out there look at all these companies. And if somebody hands me a messed up set of books, I'm going to have my little team put it together, and what should the books look like if they did it? Right? Right. And then, you know, hey, I get a discount because they didn't do this part. And that's just the nature of business. What do you think about that? You know, that angle of it is, wait a second, there's an opportunity here. A lot of times these guys can't work for another three or five years they need to sell. Right? And rather than let them you know, dissolve something that had merit, you know, play Humpty Dumpty, as you've can't put the pieces back together. Right? So 

Cliff Spolander  34:06  
I love

that. And it's my only comment, come back on that would be in my experience when you try and do that owners view their companies like it like their baby. And as soon as you start to question how beautiful, ugly that baby is, you're gonna start getting a reaction. And I'm finding when I wanted to kind of delve into the books a bit more, in a bit more detail. At least here in the UK, the owners tend to clam up. They don't want you to investigate or to look for the potential in the business because that means opening up the cupboard as it were. And I don't want that. I also find that people have very some of these are very loyal to their accountants because as their family accountant has been doing their dad's books that grandfather's books been there for, for years and years and years, they can't leave the account because they could offend the accountant. And to get the books properly, they kind of won't give it to you in the first place. So there's a lot of mistrust in that. And they almost are too scared to let it go. Now, don't know what that was scared. But when, when we do try and look for the diamonds in the rough and in the haystack. It's difficult to get that information because Oh, they're so closed with it. and Don't they won't allow that to happen. In a perfect world? I would love to say yes, my accounts, yes, my books sorted out, do some investigation, see what you can do. But to get to that point, there's gonna be a lot of trust involved. And at least here in the UK, owners don't trust people very much they keep their (inaudible) they keep the cards close to their chest. And it's, it's a tough one. But yeah, what do you what do you say, as you spot on there would be in a perfect world, but yeah, what I'm finding here, it's, it's tricky.

Ronald Skelton  36:04  
You know, have like I said, I'm still pretty new here. And but I, I am not having a problem. Like once we built rapport, a lot of times, I honestly think a lot of times people approach the whole business buying, you know, adventure, or even call it process. From a bad angle, they jump on the first call, and they start talking, what's your revenue? How many employees you have? I don't do that. I'm not even I don't have to bring it up. We have that conversation, right? If it's natural, but uh, you know, my first thing is build rapport. Tell me your origin story. How did you create this company? What's your biggest challenges? What are you working on right now? You know, I like to ask things like, hey, you know, out of all the things you could be doing right now, what has you on the phone with a guy who buys or sells businesses, you know, what problems you're trying to solve? Because my job is to not just to buy a company, my god, job is to figure out, where are they trying to go? And what are they trying to accomplish? And if that aligns with what I'm trying to do, then we make something work. If not, then that's okay. Right. But I think too many people far too often trying to jump into being very direct and in business owners are okay with it. But if you, if you take that approach, and you don't have that deep rapport when, you know, I require like when I'm looking at business I require ever show me everything your accounts or accountants ever did, right? It's your last three years of balance statements and corporate tax returns and stuff. And if you're at that level, where we can't determine whether it should be sellers discretionary earnings, or ebita, I want your last three years of personal tax returns, because I know for a fact, you'll skirt and twist and you're especially if you have a broker involved not picking on brokers, advisors, but they're trying to make the most money they can for all parties. The books in perfor, performance and all the marketing material, make it look bit better. And you might I wouldn't say lie, that's a harsh word. You might embellish those documents a little bit to make it look good. But most people don't have the (inaudible) to do that on their tax returns. Right? So I require last three years of tax returns for and, and when we get past the LOI that one guy told me no, I was like, Look, that's none of your business a cyclic, it is my business. Your you know, this is a pastor business, almost everything it makes goes to you. And that's how I correlate the books you gave me to what you are, what you're telling me is the same thing. You're telling Uncle Sam's how I kind of do my due diligence. It's just a trust thing, right? It's normal in this almost every, every buyer is gonna ask for this. He does well, I'm not giving it to you. I have other assets and stuff. And I was like, Okay, well, I'm not going after those. I'm not interested. I have other assets too. Right. So but yeah, I can get that there is some but more often than not, I think it's an I have to step back when the only time I've ever two times I've got pushback where I'am at I actually realized I jumped into that conversation because they brought it up, right? Hey, I'm in a hurry. Can we do this? Like, are you serious? You know lets, let's see, you're serious, really quick. And we had not built that rapport. Right? There's no trust yet. I can see. You know, I think for the next year here, when I'm out there evaluating businesses, I'm still gonna take a look at the ones that, you know, hand me that I asked for their financials, they start sending me excel spreadsheets, right? I used to reject those off the like, if it's not a report, and, you know, generate a PDF report from your QuickBooks if that's what she's using, but don't send me excel spreadsheets because, you know, you can type anything you wanted in there. I want something that looks like it came from a system that actually does your accounting. And, but now I'm just like, okay, that's step one. It's a piece of information, accurate or inaccurate? It is, it is a piece of information and there's a story to be told as to why you handed me that piece of information, whether it's accurate or inaccurate. There's value in, in the analysis of it, right?

Go ahead.

Cliff Spolander  40:05  
No, go for it. 

Ronald Skelton  40:06  
 So, are you,  do any other businesses right now? Are you still actually looking at other.  A lot of these guys I talked to advise, like, yeah, I have these two other things like me, I always I tell I'm, i'm open about everything. I have a real estate portfolio. And I have a, I have a pest control company of all things. 1800 miles from here, right? My guys run it, it's a, and I get on the phone with them regularly. But it's in Tulsa, Oklahoma, and I'm sitting in the Redwood Forest of Sonoma Valley, California. So, right in the vineyards and redwood trees. So, but um, that said, Do you have any other businesses right now, or,

Cliff Spolander  40:46  
yeah, I've got a, a very small property portfolio, which I'm building up as a, as a pension pot, really. My wife's self employed, she, she works as a literacy consultant, and she goes into schools to help teachers teach better English writing and reading. So I'm working with her on that. But then I've spent most of my time really creating the tools and methodology that goes into, into Exit Planning into an online portal that accountants or CPAs, can use, and what is just gonna have access to. So I spend most of the last probably 18 months making the digital and we in the last final phases of beta testing now, and we launched in September. So I've got my first training course with about 13 accountants on they're looking to take on the methodology that they can use for their, for their clients. So at the moment, not yet, but am looking to acquire more companies in the probably a q2 of 23.

Ronald Skelton  41:44  
You gotta give them some type of your own certification, right? So they're so and so certified accountant. Right. So then, then we can actually come on the show later next time, you will have you on there another next time this you know, this time next year or something, you can go, Hey, now we got it, you know, if you want to get this done, right, you got to have a so and so certified accountant. right,  So how do people find you and your information out there and I like the when this course is available, we're where would somebody find that?

Cliff Spolander  42:12  
they can contact me either via LinkedIn, which is on the link below. Or if you go to business by design.co.uk, you can contact me there, or just simply email me cliff at business by design.com.@uk and I'll be happy to send you more information about the various training courses and how to become a an accredited advisor. So you can go help your clients achieve a successful exit using the tools and methodology that I have created.

Ronald Skelton  42:40  
Cool. And there's a lot of questions. Can you think of anything like me should ask me this? Is there any topics I missed? There's a question I missed or?

Cliff Spolander  42:47  
No, I don't think so. I think what do you doing their is great, I think that the whole, the whole aim, my whole motivation is to educate owners to make them aware of what's out there. And to also give accountants CPAs, the ability to work with their clients in a very structured and focused way. So I think the more we can help owners understand that there's more to business and making widgets, and to help CPAs and accountants that there's more to doing books and compliance work, I think the better I think we can all help each other to achieve everyone's success and everyone's happiness and make this world a better place. And you know, from as far as I concerned, a business is simply a vehicle to get you from A to B. And if we can make their vehicle as efficient and as quick as possible, or in the, in the way you want it to then, you know it's a win, win, win as far as I'm concerned. So my whole thing is business needs to be an all round win. Otherwise, don't bother doing it.

Ronald Skelton  43:44  
Well we mentioned something earlier. And it's on my top of my mind right now because I catch myself entangling myself in this. Somebody asked me, you know, what do you do? I'm a podcaster. Right? And I do so many other things. But that's the thing I enjoy the most. If you would ask my father what he did he tell you he's a painter, but he do full blown remodel doesn't work at a paint factory making paint had the best eye for matching colors. Anybody ever said, my father was blind in one eye. And he could beat the computers at that paint factory matching colors, right? It was just impressive to see what he can do. The computer would tell him to do certain codes. It's like the eyes of the law and changed it himself. He (inaudible) be a shade off or something. And but you know, as an entrepreneur, and you're out there in the space, what do you think? What do you think's the key thing out there? I know I get it is that? How do I guess the right word I'm looking for Is how do we separate our identities from you know who we are versus what we're running and what we do? Because that's, that's something that happens a lot inside of this exit of this exit strategy is like hey, if, if I'm not the widget maker, then who am I? Do you have you brought it up earlier? Do you have a when you're advising people and helping them? Like what's your thought process on that? How do you deal with that.

Cliff Spolander  45:01  
That's a complex question. And I'm glad you brought it up actually. It's about creating energy in what you do. Yeah, we all tried to find his work life balance. And it's, it's a tricky thing, because you're in constant motion to try and balance everything. But it's where you find your energy. And if you find your energy in business and working 70 hours a week, that's absolutely fine. Or if you find your energy in sport, or if you find energy in your family, that's absolutely fine. But I think every now and again, you need to stop and take a step back, assess your life, making sure that you know, where are you heading? Where are you right now? And are you heading in the right direction, because if your ladder is against the wrong wall, you want to be climbing up the ladder to find that rung while you're climbing up. So you need to just take a step back and said, Look, where am I going? I'm currently on this path, where's it leading? Is it where I wanted to go? And just make those, those decisions based upon where you currently are and where you want them to go. And that's why I tend to take every 90 days, a quick break, just to see and assess where I am, what's happened over the next month or the last 90 days, what's going to happen and what what's my plan to be for the next 90 days. And then once a year, to take a couple of days out to say like what's happened normally (inaudible) between Christmas and New Year is to look back and say what have I achieved over the past year, and I've got two children aged 12 and nine, you know, what have I done with them? Are we building relationship? Where's my identity in everything? Is it in my kids? Is it with my wife? Is it my business? Is it? Where is it? And then look at the, the coming year as a where am I wanting to go? This time next show? What do I want to see as it's really about being very conscious of what you're doing, and where you want it to go. And so I think it's, I don't think it's, it's wrong to put all your energy into, into sport or into a business or whatever the case is, as long as you can take a step back and just make sure that you actually are in the right direction that you you're heading in where you want to go. And you want to end up in a place where you don't want to be so and, and have regrets. So it's all about just reassess, reassessing and stepping back from constant striving to take a take stock of where you are.

Ronald Skelton  47:22  
thats interesting, and a lot of people spend a lot of effort, time and money even coming up with a vision and direction for their company. But they don't stop and figure out what does that look like a vision and direction for themselves. And there's a lot of power, I don't know if anything is more in powerfull than intention, right? Directed intention, similarity and focus I want to get here. And I personally I know and people even said this, if I set my mind to something that gets done, you know, you know, and people are just shocked by, you know, my wife one day said, hey, you know, I kind of like to live in a tiny home, I was like, Alright, let's go get one I was we were going to Texas just for a little while to I was volunteering at a self help program type of thing and helping people out. Great program. But uh, were gonna go down there for two years while I did this leadership and executive training type of thing. And so she, she wanted a tiny home. And as I cheaper than rent, let's just go get one. And a lot of people look at that and go, How do you do that? And it's like, well, you there's a goal, you set a goal, and you just have the you know like you know, it's a singularity of focus. I've run into business owners and people, almost anybody locks you on the street, if you ask them what their what are your goals in life? You know, where are you going? What do you want to do? Most people don't know. That's the single downfall of most, and I catch myself this way. Right? Sometimes I'm like, I just get up and do what I do every day. And like did, I did I set a goal. And kind of funny, we talked about this, because that's kind of what I was doing last night. And what I'm working on right now is, what does it look like for next six months? Right? What are my goals and my intention for the next six months for this show for my business acquiring business for, for the other projects I've gotten along from the family? And, you know, that should have been done a long time ago, but you get in these phases where your just doing what you're doing, and don't realize that you haven't set that, that vision. So what's your thought process on? Like, what does that you talked about the business plan, the personal plan and the financial plan? Do you have them do that documented? Is that just something they do in their head? Is there an exercise book you give them or what, what does that look like? I'm curious here

Cliff Spolander  49:42  
in the when I'm creating the online portal is we can send the owner what I call a value assessment. And in there is a four part questionnaire that you answer and you, you will score yourself, your financials and your business against that. And then there generates five reports generates the results of each of those questionnaires. And, and it will show your score and how you rank yourself. But then also converts and produces a fifth report called a master action plan. And basically combines all four reports into one big report. But it puts them in order of how you scored yourself. So if this was like a one that lists all the areas where this other one in the two, threes and the fours, etc. And it gives you all the areas that you need to work on within your business, your personal and financial plan that, that needs to be there for you to be able to exit correctly. And so you take those that entire document and you work on a list by or step by step over and 90 day plan over a 12 month plan. So that you slowly become exit ready, you slowly start to add value in the business, you get yourself personally prepared yourself financially prepared, and ask you some key questions, some questions you may have thought about, or some questions you have thought about, but may have gotten. And it really helps to bring to the mind exactly that yes, you can work 100 miles an hour and your business but also you do have a life outside of work outside of business, you do have a family do you have your own personal space was it looked like what's your financials look like? And so it just brings to light where, where you are in those three plans. And we do that once a year to measure and monitor your performance and track your performance over time. And so the value assessment allows us to do that. And so that's a tangible and intangible measurement of a way are you on the journey, but also to show you by having a visor work with your coach work with you to show the impact they have on your business. And whether they're actually adding value to the business or not, which I think is very, very important.

Ronald Skelton  51:46  
Awesome. Well, we are here at the top of the hour here is really easily top point you want to leave everybody with something you like hay if you really don't remember anything else about the show. This is what I want, I want you to walk away with.

Cliff Spolander  51:58  
I think the, the number one thing is to if you want to, if you want a business, start planning your exits right now. But don't just plan your exit with your business in isolation, have a business plan, a personal plan and a financial plan. Worked out what you could do with your business, know how you get an exited,  you gonna sell it,  liquidated, close it down? What do you do between now when you do exit? What you do after you exit? And also how much money will you need when you retire? Those are the three key plans that you think have in place. So start planning straight away, but have those three plans aligned?

Ronald Skelton  52:34  
Awesome. I appreciate you being on the show today. One last time, how do people reach out to you

Cliff Spolander  52:41  
simply by email, Cliff at business by design.co.uk or the website. business by design.co.uk or on the LinkedIn link at the bottom.

Ronald Skelton  52:51  
All those will be on the show notes. Hope you guys are listening in somewhere don't do don't look if you're driving. But if you're not driving, you'll get your, your, you, you can actually if you're watching the video or something, I'll have my team put that all in the show notes. So all your contact information will be there. People know how to reach out to you, I appreciate you being here today, man, it was really fun. I'm gonna get off here and go view the ocean here and spend my day might I moved to a new location, one of the cool things I like to do is go meet other business owners. So I think I'm gonna go hang out at the this is a little town a little vacation town of like 4500 population, that they have a chamber of commerce here. So I'm gonna go pop in over the Chamber of Commerce and say, who in town should I know? right? And just kind of get out and meet some people. But I appreciate your time today. And thank you for being on the show.

Cliff Spolander  53:37  
Thanks for having me. It's been great talking to you and enjoy the rest of your day as my day closes out.

Ronald Skelton  53:43  
All right, we're gonna end the stream hanging on for just a second. That's the show guys and appreciate you for hanging out and watching us. If you make sure you check the show notes, we do have some stuff going on right now we have a mergers and acquisitions meet up tomorrow via zoom. So all the m&a guys if you're out there buying companies selling companies or an acquisition entrepreneur, twice a month we meet up help each other out, move our game short, it's just a business networking thing. You'll find that in the show notes today. And then the other thing you can find is we do have a Slack group. So if anybody wants to chat with us and all of our guests you'd be in but you'll be emailed and invited a Slack group also. So if somebody wants to talk to one of the speakers, some of them elect to be here, some of them not. So you know, we have some pretty cool people on there that you can reach out and just, you know, throw some questions up and get very valid responses from some really intelligent people on there. So I appreciate for being here. And that's the show. 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