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How to Build a Sellable Academic or EF Coaching Business | Cathleen Pittman · The Academic Coaching Podcast

0:00
Kathleen: I thought I was doing my life's work, and then life took a little turn.
0:04
Kathleen: But I'm happy to share the story, because it's something that often times we don't think about until we have sort of a life-changing event.
0:14
Gretchen: welcome to the Academic Coaching Podcast brought to you by the Anti-Boring Learning Lab and me, your host, Gretchen Wegner.
0:24
Gretchen: This is the show where we reflect all about the art and science of coaching students.
0:29
Gretchen: We're talking study skills.
0:31
Gretchen: We're talking executive function strategies, tips and tricks for teaching the science of learning to students, and occasionally, like today, a little bitty business advice thrown in for those of you in private practice.
0:44
Gretchen: So today, my guest is Kathleen Pittman.
0:48
Gretchen: I can't wait to introduce you to her.
0:50
Gretchen: She's been in education for a long time, 28 years, and now runs Our Learning Studio in North Carolina.
0:58
Gretchen: She's also the host of the Tutor Mentor Podcast, and has done something most of us only think about, or we actually don't even think about it which is why she's here today.
1:10
Gretchen: She, number one, built a tutoring center from the ground up, but then number two, she sold it for some really decent money, which you'll learn about a little bit later.
1:21
Gretchen: So the hard part is that it was a difficult life experience that brought the question of selling to the forefront for Kathleen, and what she learned in that process is exactly what we're gonna be talking about today.
1:33
Gretchen: And, oh, before you say to yourself,"Eh, I'm just a single coach or tutor, and I'm working virtually.
1:39
Gretchen: I have absolutely nothing to sell.
1:41
Gretchen: I'm not gonna listen to this video," I want you to take your finger away from that stop button, and please, pretty please, watch this whole video, because you might just be sitting on some moolah.
1:52
Gretchen: I learned that I certainly am.
1:55
Gretchen: And please also stay tuned to the end, because Kathleen has actually a Teachable course all about how to set up your business so it's ready to sell.
2:03
Gretchen: And spoiler alert, I'm planning on taking it myself some time next year.
2:09
Gretchen: But let's just jump in.
2:11
Gretchen: Kathleen, welcome.
2:13
Kathleen: Hi, Gretchen.
2:14
Kathleen: Thank you for having me today.
2:15
Kathleen: I'm so excited to talk about this topic.
2:19
Gretchen: Yes.
2:19
Gretchen: So, um, is it hard for you to tell the story?
2:23
Gretchen: Because I know it's, you know, and what probably wasn't the easiest time of your life, about what prompted you to- Mm-hmm sell your, or get it ready to sell.
2:32
Gretchen: Is that hard to do?
2:34
Kathleen: It's, it was a very bittersweet time.
2:36
Kathleen: Yeah.
2:37
Kathleen: Um,'cause I thought I was doing my life's work, and then life took a little turn.
2:42
Kathleen: but I'm happy to share the story, because it's something that often times we don't think about until we have sort of a life-changing event.
2:52
Kathleen: And so what I would love to sort of share, share a little bit about my story, but what are some of the steps that we can take to plan ahead, even if you never plan to sell.
3:02
Gretchen: Mm-hmm.
3:03
Kathleen: Those steps that you would take are going to help your business thrive and become systematic and all of those things, even if you never plan to sell.
3:12
Kathleen: Mm-hmm.
3:13
Gretchen: And you know what's interesting?
3:15
Gretchen: Ever since I met you, which hasn't been that long, we just took off like wildfire.
3:20
Gretchen: We're big fans- Yeah of each other.
3:23
Gretchen: But even just yesterday in my meeting with my office assistant, my virtual assistant, I, I found myself saying to her, and I'm sure it's inspired by our conversation, I was like,"Christine, God forbid anything happens to me, I want you to know actually who the person is who has the most fidelity to the Anti-Boring Learning Lab, like really uses the tools, and who could help guide you about what to do with the business after I'm gone." Of course, now I'm gonna plan for it because I'm gonna take your course and I'm gonna follow your suggestions, so hopefully she won't have to do that last minute.
3:59
Gretchen: But it was really interesting to say, you know what?
4:01
Gretchen: I should at least say that out loud.
4:02
Gretchen: If, if I don't have time to do the things that you're- Yeah gonna let us know we sh- would be a good idea to do.
4:09
Gretchen: It was really kinda sweet to tell her that like,"This is who can help you."
4:14
Kathleen: Yes.
4:15
Kathleen: Yes, that planning ahead, even if we may never need it.
4:18
Kathleen: Mm-hmm.
4:18
Kathleen: So absolutely.
4:21
Gretchen: Yes.
4:21
Gretchen: Yeah.
4:21
Gretchen: So tell us, so tell us what happened first,'cause it sounds like you weren't ever planning on selling your business.
4:26
Kathleen: I wasn't.
4:27
Kathleen: I felt like I was doing my life's work.
4:30
Kathleen: So way back, we're g- go way back to the mid-'90s, I started my, um, my career in education in a fifth grade classroom.
4:39
Kathleen: I absolutely loved it.
4:40
Kathleen: And then moved into an administrative role as a beginning teacher evaluator and spent 15 years coaching, visiting thousands of classrooms- Mm and coaching and mentoring beginning teachers.
4:51
Kathleen: And during that same time that I was a fifth grade teacher and administrator, I started tutoring just like a few students at a time, just out of my home.
5:00
Kathleen: I loved it.
5:02
Kathleen: I absolutely loved it.
5:04
Kathleen: And in 2006, I founded, uh, I founded a tutoring center.
5:10
Kathleen: And- It what we served all major subject areas-
5:16
Gretchen: Mm
5:16
Kathleen: pre-K through college.
5:18
Kathleen: It grew to include eight incredible faculty members.
5:22
Kathleen: Oh, wow.
5:22
Kathleen: I surrounded myself with people who had talents I'll never have.
5:26
Kathleen: So we were really able to be a powerhouse and serve hundreds of families coming to us from four different counties for in-person instruction.
5:36
Kathleen: Um, and so I really did feel like I was doing my life's work, really thought it could be something that even keep in the family, just a generational sort of business.
5:46
Kathleen: And then in 2008, I was blindsided.
5:49
Kathleen: I was diagnosed with a, a very aggressive form of breast cancer.
5:53
Kathleen: Mm.
5:54
Kathleen: And almost overnight, I needed to remove myself from the business.
5:59
Kathleen: Now, here I had this thriving business.
6:02
Kathleen: I thought I, I'm such a strong business owner.
6:05
Kathleen: Well, you know, one of the signs of a strong business is can you make yourself operationally irrelevant?
6:12
Kathleen: Are there systems in place and everything in place to keep it going in your absence?
6:16
Kathleen: And the answer at that time was no, I did not.
6:18
Kathleen: I had my hand in everything, thinking that I was being a strong business owner.
6:23
Kathleen: Um, so all of the policies and procedures and payroll and paying rent and all, all of those systems were here.
6:30
Kathleen: They were here in my head.
6:32
Kathleen: And, um, so I had to step back really quick and take a very hard look at my business.
6:38
Kathleen: And the first fear that I had was I'm gonna have to shut down.
6:41
Kathleen: Mm.
6:42
Kathleen: I d- there's, I don't know how I'll be able to do this.
6:46
Kathleen: And so it just forced me to take a hard look.
6:50
Kathleen: How quick could I put some systems in place?
6:53
Kathleen: Um, I did have an incredible team already in place.
6:57
Kathleen: Um, but I'm thinking, you know, are we gonna close?
7:00
Kathleen: I have to think of the colleagues, the community, the families we're serving.
7:04
Kathleen: Um, and could I run the business behind the scenes in a minimal role while I started to undergo, um, chemo pretty...
7:13
Kathleen: Well, surgery first, and then immediate chemo- Mm and radiation- Yeah additional surgeries.
7:18
Kathleen: And so I- that's exactly what I did.
7:22
Kathleen: Um, and for six more years, th- this amazing learning community that I really credit the faculty with building, uh, just continued to thrive and to grow.
7:34
Kathleen: So toward the end of 2013, you know, the treatments had ended the first year, but the surgeries didn't.
7:39
Kathleen: This was a long, long journey.
7:42
Kathleen: And I also was looking, uh, I had...
7:44
Kathleen: My son was in kindergarten when I was g- diagnosed.
7:47
Kathleen: I was in my late 30s.
7:48
Kathleen: I got diagnosed very young.
7:50
Kathleen: Um, and, you know, six years later, he, you know, had, um, w- had gone to his, well, counselor, who was talking through everything, you know, with him.
8:00
Kathleen: And he said,"I'm very proud of my mom." Aw.
8:02
Kathleen: "But sometimes I feel like she's with me, she's not really with me." And I knew that I needed to refocus, um, my attention.
8:11
Gretchen: Okay, let's pause there for a second.
8:13
Gretchen: Yeah.
8:13
Gretchen: Oh my goodness.
8:14
Gretchen: I mean, I thought I was gonna be touched by the cancer story, but my goodness.
8:18
Gretchen: Mm-hmm.
8:18
Gretchen: What a kiddo.
8:18
Gretchen: Yeah.
8:20
Gretchen: To just say that, and to, to be aware of that, and to be able to say it.
8:24
Gretchen: Mm-hmm.
8:24
Gretchen: And also to, to trust that he could say it out loud.
8:27
Gretchen: Mm-hmm.
8:27
Gretchen: Mm-hmm.
8:28
Gretchen: I can really imagine how that would have impacted you to be like- Yes"Oh my goodness, I need to be really with him.
8:33
Gretchen: I need to figure that out."
8:34
Kathleen: That's right.
8:35
Kathleen: Mm-hmm.
8:35
Kathleen: That's right.
8:36
Kathleen: Uh, and so that sort of made the...
8:39
Kathleen: I, I knew that I wasn't physically, at that time, able to keep going at the pace that I would need to go to keep this large center going, and then his needs.
8:48
Kathleen: And I just decided, I'm gonna contact a business broker.
8:52
Kathleen: And I know, a- all the research I'd done, it says it could take up to two years to sell a business.
8:57
Kathleen: Mm.
8:57
Kathleen: Well, I had this incredible business broker and, um, and, you know, so we listed it at the beginning of 2014, and very quickly I had two offers to buy the business.
9:07
Kathleen: So it was very bittersweet because I thought at least I have that couple years to sort of gradually let go.
9:15
Kathleen: But, um, we found the right buyers too.
9:18
Kathleen: Mm-hmm.
9:18
Kathleen: Fantastic educators, um- And, you know, all of those steps that I had taken to be able to be away for the treatments and the surgeries allowed for this beautiful transition, and really made the business, I think, appealing to new owners.
9:36
Kathleen: Because if there's an over-reliance on the owner-
9:40
Gretchen: Mm-hmm
9:40
Kathleen: for the business to run, it's a huge risk and a red flag for a buyer.
9:45
Kathleen: Mm-hmm.
9:45
Kathleen: Can we make ourselves operationally irrelevant, even in a private practice?
9:49
Kathleen: Mm.
9:49
Kathleen: And so I, uh, provided 40 hours of training for them as part of our transition, and they, over a 30-day period, I believe, and then they successfully ran the business.
10:02
Kathleen: Mm-hmm.
10:03
Kathleen: And so that is how I sort of started the center and then transitioned out, um, after eight years.
10:12
Gretchen: Okay.
10:13
Gretchen: Well, I am putting myself in the shoes of the listeners, and although many of the people in our Anti-Boring Learning Lab community do have or intend to grow businesses where they have multiple coaches or tutors working with them or underneath them, I can just imagine when you s- Mm-hmm when you said that phrase,"operationally irrelevant," that so many of the people who are solopreneurs would be like,"Ah, there's no way I can be operationally irrelevant." So we'll, we'll eventually, I think, talk about that.
10:47
Gretchen: But maybe- Yes we could start by just naming what makes a sellable business.
10:53
Kathleen: Mm-hmm.
10:53
Kathleen: Absolutely.
10:54
Kathleen: And, and we will come back to that operationally relevant, because I am in private practice now.
10:59
Gretchen: Mm-hmm.
10:59
Kathleen: And I have my system set up that I can be operationally irrelevant, as long as...
11:04
Kathleen: Y- you know, it really means if you're in a solo practice, you have someone that could step in, that your systems are in place, that they could, um, run it.
11:13
Kathleen: But- Mm-hmm we'll, we'll talk a little more about that sort of solo practice.
11:17
Kathleen: I think that's a really good point.
11:19
Kathleen: Uh, but when you're thinking about a sellable business, and if you're thinking through the eyes of the buyer, what is the buyer going to be looking for?
11:29
Kathleen: The first thing is a strong customer base.
11:31
Kathleen: Mm-hmm.
11:32
Kathleen: Do you already have a loyal following?
11:36
Kathleen: Do you have a network, a referral network?
11:39
Kathleen: Um, do you have a viable market for your services?
11:42
Kathleen: Are they in demand?
11:43
Kathleen: So is your business centered around a service that is highly sought after?
11:49
Kathleen: Uh, another thing they're going to look for is, do you have some sort of strategic plan?
11:55
Gretchen: Mm.
11:55
Kathleen: You know, where is...
11:56
Kathleen: What's the vision of the business?
11:59
Kathleen: Where is it headed?
12:01
Kathleen: What's the mission?
12:02
Kathleen: What's the purpose?
12:03
Kathleen: What, what is the strategic plan?
12:06
Kathleen: Another important thing they're gonna look for is transferable value.
12:11
Kathleen: So if all of...
12:14
Kathleen: Just as when all of a sudden I needed to list my business, everything was in my head.
12:19
Kathleen: Every, you know, it, I didn't have, um, like you were talking about talking with your assistant, someone that I'm talking to saying,"If I'm not here, you know, for this next month, here's what to do." Or, um, so does it have transferable value?
12:34
Kathleen: Not overly reliant on the owner.
12:38
Kathleen: Um, do you have clearly documented policies and procedures?
12:42
Kathleen: Those are your systems.
12:43
Kathleen: That's your roadmap.
12:44
Kathleen: What's the roadmap to make your business run?
12:48
Kathleen: Transparent and trustworthy record-keeping.
12:51
Gretchen: Mm.
12:52
Kathleen: This is absolutely key when you go to closing with due diligence, and they want...
12:57
Kathleen: You know, I had eight years of a business, they need to see eight years of documentation- Mm-hmm to show evidence.
13:02
Kathleen: I can't just say my revenue was such and such.
13:06
Kathleen: I needed to show evidence of spreadsheets that align with bank statements or, uh- Yeah so that record keeping.
13:14
Kathleen: Um, they're gonna look for consistent financial history.
13:19
Kathleen: What sort of trajectory is your business on?
13:22
Kathleen: If it's in a steep decline, it could still have value'cause they may come in and- Mm-hmm rescue it and build it up to something new with untapped revenue potential.
13:31
Kathleen: But most buyers are going, going to wanna see that upward trajectory.
13:35
Kathleen: Um, and then the last thing that, in my experience, the buyers were looking for is untapped revenue potential.
13:44
Kathleen: Is your business scalable?
13:46
Kathleen: Is there something that...
13:47
Kathleen: And so in my strategic plan, um, for my business broker, when he presented it to potential buyers, I had all kinds of ideas because I knew at this point I, uh, I was in survival mode.
14:00
Kathleen: Um, I wasn't trying to grow at that point.
14:03
Kathleen: Here are all of these areas that if I could be here full time and feel well and just be here- Mm this is what I would be doing that could likely increase revenue by at least 25%.
14:14
Kathleen: Um- Do
14:14
Gretchen: you have an i- i- an example of what, like, maybe one of those ideas was that you had at the time?
14:20
Kathleen: Yes.
14:20
Kathleen: We had this beautiful 4,000 square foot building that we were renting.
14:25
Kathleen: This was not like a real es- um, something that I own, but we were leasing this- Yeah beautiful building, and it was really being used from 2:30 to 8:30, and in the mornings and the early afternoon it sat empty.
14:39
Kathleen: And so we talked about homeschool co-ops.
14:42
Kathleen: We talked about- Mm um, having like a kindergarten, not doing up, getting a licensed pre-K, but maybe like some kindergarten readiness little camps that could be held in the mornings.
14:53
Kathleen: Um, you know, some parent workshops.
14:56
Kathleen: We had a beautiful conference room.
14:58
Kathleen: Parents could come in for workshops or a lunch and learn- Mm-hmm you know, during their lunch hour.
15:04
Kathleen: So that's all I can think of off the top of my head.
15:07
Kathleen: Yeah.
15:07
Kathleen: But I had a, a long list- No, that's, that's great saying that we're not tapped out.
15:11
Kathleen: Mm-hmm.
15:11
Kathleen: This business is scalable.
15:14
Kathleen: It, so this, the revenue that I'm showing you, that's not the limit.
15:19
Kathleen: Um, and so those are some of the things that a buyer would look at to say,"Is this a business that would be viable to purchase?"
15:27
Gretchen: Mm-hmm.
15:28
Gretchen: Okay, so now is maybe a good time,'cause I heard those little voices in my head going,"But, but none of that is me.
15:34
Gretchen: You had a brick and mortar business, Kathleen," or- Mm-hmm"You had blah, blah, blah." Mm-hmm.
15:39
Gretchen: So let's imagine, I mean, most of our Anti-Boring Learning Lab members do have virtual businesses- Yes where they, uh, you know, coach anywhere between five and 20 coach- or students a semester.
15:57
Gretchen: Mm-hmm.
15:57
Gretchen: Some have more because they have coaches working with them.
16:01
Gretchen: But- What would you say to people who don't have a building, who don't have- Mm-hmm a, a other tutors working for them about what makes that an asset that they could sell?
16:14
Kathleen: That is, that is such a good question because...
16:17
Kathleen: And we're gonna talk a little bit about pitfalls, and one of those pitfalls is don't assume your business has no value-
16:22
Gretchen: Okay
16:22
Kathleen: because it's just you.
16:23
Kathleen: And let's talk about that.
16:25
Kathleen: Okay.
16:25
Kathleen: So my- I'm in solo.
16:26
Kathleen: So in two thous- I sold in 2014.
16:30
Kathleen: In 2018, oh my goodness, I felt so much better.
16:33
Kathleen: I was ready to get back in the game, but it was in a different season of life.
16:36
Kathleen: I could not, um, I think, hire a team again and do the large scale.
16:40
Kathleen: So I'm in solo practice, and um, I did have a, um, a studio and then in 2020 went virtual.
16:48
Kathleen: And just recently I, um, opened an office, um, where people can come for in person, where I can do parent workshops, where I can coach.
16:58
Kathleen: I'm doing a lot of coaching of business owners and executives and th- where they can come for in person.
17:04
Kathleen: But the majority of my business is done on Zoom.
17:07
Kathleen: Mm-hmm.
17:07
Kathleen: Now I'm in my home studio, you know, right now.
17:09
Kathleen: Not at my office, but, like, this is...
17:11
Kathleen: And it's just me.
17:12
Gretchen: Mm-hmm.
17:12
Kathleen: I am taking the same steps that I took when I had that large scale center.
17:18
Kathleen: I'm doing the same steps now so that at some point if I decided that I wanted to hand my practice to another like-minded person, that all of the systems are there, the intellectual property.
17:31
Kathleen: And, and that's where w- we know in a service industry business the majority of your value is in goodwill.
17:41
Kathleen: Mm-hmm.
17:41
Kathleen: Those are the intangibles.
17:43
Kathleen: When I sold my business, only 5% of the profit came from assets, books, furniture.
17:50
Kathleen: That's about all I...
17:51
Kathleen: You know, I didn't own- Okay the building.
17:53
Kathleen: 95% came from intellectual property.
17:56
Kathleen: And so, you know, I- thinking, you know, being myself a, um, one-on-one coach in a virtual setting with no team, some of my assets would be my online courses, the small groups that I've developed, the parent workshop, um, curriculum that I have developed.
18:13
Kathleen: Um, your logo, your brand, all of those things.
18:18
Gretchen: Mm-hmm.
18:18
Kathleen: And we can talk in just a little bit, we were gonna answer I think a question from one of your community members- Mm about how do you actually then sell, like, a solo business- Right that's based on personality.
18:29
Kathleen: But, um, I'm still- Documenting all my revenue, my expenses.
18:34
Kathleen: I'm have my systems in place so that if I wanted to hand my business over, they could really step in probably with about 40 hours of training and be able to take over.
18:46
Gretchen: Mm.
18:47
Gretchen: What about, um, like I g- I'm thinking one of the things I teach, and so the Anti-Boring Learning Lab is mostly, while we're all educators, there's a little corner of it where we have the Rock Your Biz program for those- Mm-hmm who also are in private practice who wanna have those conversations together.
19:03
Gretchen: And my main theme always, always, always is you don't need social media.
19:08
Gretchen: You don't even need a website right away if you don't have time.
19:11
Gretchen: You've just gotta get started.
19:12
Gretchen: But what you do need is you need relationships- Yes and referral relationships.
19:17
Gretchen: So would referral partners be considered an asset?
19:21
Kathleen: Absolutely.
19:22
Kathleen: Absolutely.
19:23
Kathleen: And when I did sell the, the larger tutoring center, that was an important part is letting that relationship transfer over to like the pediatricians and the psychologists and the speech language pathologists to show that we are standing in unity.
19:39
Kathleen: Mm.
19:40
Kathleen: The new owner sent me as getting ready to transition out- Mm and that this is the network.
19:45
Kathleen: The framework is still the same.
19:47
Kathleen: Mm-hmm.
19:48
Kathleen: You know, um, and so the, absolutely your relationships, we know in goodwill value that's the number one thing, whether it's relationships with your clients, their families- Mm-hmm um, other, um, tutors or coaches- Mm-hmm or referral partners.
20:04
Gretchen: Mm-hmm.
20:05
Kathleen: If you don't have relationships, you know, your reputation, your goodwill value- Yeah that's where that value.
20:11
Kathleen: Yeah.
20:11
Gretchen: And we would assume that you're selling, like the best person to sell to is somebody who has your values anyway or who you know- Mm you can transfer- Mm-hmm uh, the same kind of high quality service will happen.
20:24
Gretchen: They just need all of your systems and procedures and, and then the, the relationships need to know like,"Oh, we really can trust this person the way we used to trust-" Yes Gretchen or whoever.
20:35
Kathleen: That's right.
20:36
Kathleen: That's right.
20:37
Kathleen: When, um, I think in the course I talk a lot about at the end of the course about how I did the transition, but it was very much in unison.
20:46
Kathleen: Like- Mm-hmm my letter to our learning community that, um, that I had made this difficult decision- Yeah was attached to the letter- where they were introducing themselves.
20:57
Kathleen: Mm-hmm.
20:58
Kathleen: The faculty.
20:59
Kathleen: I sat down individually, you know, with each faculty member with the new owners.
21:04
Kathleen: Um, our long, we had some families that had been with us through the long haul, had been with us for years- Mm and had, you know, brought multiple children through and, and so those families I had to come into the office to sit for like a meeting.
21:20
Gretchen: Mm-hmm.
21:20
Kathleen: Just their, the parent, or the gr- it was actually the grandparent was the first- Mm um, so that we could sit as a unified team.
21:27
Kathleen: Yeah.
21:28
Kathleen: That we put out a press release to the local media in unison.
21:32
Kathleen: Mm-hmm.
21:32
Kathleen: So it's all, the transition is so important.
21:36
Gretchen: Mm-hmm.
21:36
Kathleen: Because we know at any time that trust factor-
21:40
Gretchen: Mm-hmm
21:40
Kathleen: anything that we're doing, like with your community, you know- Mm-hmm are people going to enroll?
21:44
Kathleen: Do they have that, like they like you, know you, do they trust you?
21:48
Gretchen: Mm-hmm.
21:48
Kathleen: And so, um, that's a critical piece of the transition.
21:55
Gretchen: Well, and this word trust, we're gonna get to the more pitfalls, but this, this first pitfall of don't assume that you don't have something that is worth selling, and you just mentioned trust.
22:09
Gretchen: I know you are so passionate about talking about this, especially because the tutoring and coaching industry is women-dominated.
22:16
Gretchen: And will you say a little bit about, well, I'll say first and then you can say why you're so passionate about supporting women.
22:23
Gretchen: But one of the things that I think is true about w- women's worlds is that we are relationship-focused, and if we're really mindful, we do know how to build trust, not saying men or non-binary people don't.
22:37
Gretchen: Mm-hmm.
22:37
Gretchen: I'm just saying culturally speaking- Sure this is a gift that we bring that we don't always see has monetary value, but it does.
22:47
Gretchen: Mm-hmm.
22:47
Gretchen: And so it's very exciting to help people who don't normally see they have something that is an asset, to help them see that it is an asset.
22:56
Gretchen: Um, I don't think I said it in a, as inspiring a way, though, as I think you will when you've been talking to us.
23:02
Gretchen: So why do you care so much about helping women and other marginalized identities learn how to do this?
23:10
Kathleen: Well, I will say, and I was probably guilty of this when I- Mm-hmm first launched my tutoring center years ago.
23:17
Kathleen: We tend to make ourselves small.
23:20
Kathleen: Yeah.
23:20
Kathleen: How often do you meet someone and you ask them what they do, and they might say,"Oh, I have this little tutoring business," or it's,"I have a little side hustle." It's a- When they have founded something incredible, but we tend to make ourselves smaller.
23:36
Gretchen: Yeah.
23:37
Kathleen: Instead of, you know, I'm, I am the founder of an organization that helps children learn to read and changes the trajectory of their lives,'cause we know reading opens the door to everything.
23:48
Kathleen: You know, we tend to make ourselves smaller.
23:51
Kathleen: And I probably did that when I first started too.
23:54
Kathleen: Like,"I'm gonna open this little tutoring center.
23:57
Kathleen: Won't that be incredible?" Well, you know, it, we are sitting on value.
24:03
Kathleen: And, and I will also tell you I was surprised when, um, I, I had a, just such a incredible business broker that, um, I worked with, and I was actually surprised at the value-
24:14
Gretchen: Mm-hmm
24:14
Kathleen: that was placed on the business.
24:15
Kathleen: Because I'm looking around, and yes, we have this beautiful facility, and it's just decorated, you know, we have all the resources and everything.
24:22
Kathleen: But I don't own the building, um, so I don't have real estate.
24:25
Kathleen: Let's see, I own the furniture and the books-
24:28
Gretchen: Mm-hmm
24:28
Kathleen: and the supplies.
24:29
Kathleen: So I don't, I don't know that this...
24:31
Kathleen: And, you know, they, business brokers are experts in looking at your revenue and your trajectory and your, um, and able to come up with a, a value in looking at untapped revenue potential.
24:43
Kathleen: And so it is worth having your business appraised.
24:48
Kathleen: Mm-hmm.
24:48
Kathleen: To not just assume,"Well, I'm just gonna shut down, it's not worth anything."
24:52
Gretchen: Are you willing to share what you did sell yours for?
24:56
Kathleen: I did, um, have a, a net pr- a six-figure net profit- Wow for my business.
25:02
Kathleen: Okay.
25:02
Kathleen: Which was, um- It's, it was a huge blessing, um- Yeah to the family.
25:11
Kathleen: But I would say, though, that what is more of a blessing is that the new owners carried it on.
25:18
Kathleen: Mm-hmm.
25:18
Kathleen: And it became...
25:20
Kathleen: You know, and I think, I wanna say it was 2022 that they retired and- Oh or that he, um, that he retired and the business closed.
25:28
Kathleen: But for eight more years, this learn- So I got the diagnosis in 2008.
25:33
Kathleen: I thought,"Oh, this whole community is gonna be, um, shut down." I cared deeply about the faculty.
25:38
Gretchen: Mm-hmm.
25:38
Gretchen: Just
25:39
Kathleen: in- uh, um, remarkable teachers- Mm and people who really cared about the impact they made on kids.
25:46
Kathleen: And not only was I able to keep it going for six years, I was able to sell it to someone who kept it going for eight more years.
25:51
Kathleen: So I would say that, that was, meant everything to me.
25:57
Gretchen: Let's not forget more pitfalls.
25:59
Gretchen: Thank you for sharing all of that.
26:01
Gretchen: And what are some other pitfalls that people should look out for?
26:05
Kathleen: So the first pitfall, I'm gonna show you my,'cause I'm visual with my, my clients.
26:11
Kathleen: Okay, so if we think about a house, okay?
26:16
Kathleen: If we have a house and we're going to want to sell it, we have to plan ahead, right?
26:22
Kathleen: So if we're thinking about your house, or is it organized?
26:25
Kathleen: Is it decluttered?
26:27
Kathleen: Have you maintained it?
26:29
Kathleen: Have you kept records of repairs and things?
26:33
Kathleen: Have you had the value assessed, and have you optimized the profit?
26:37
Kathleen: Okay, so if you think about your business like a house, are you doing these things and planning ahead?
26:44
Kathleen: One of the biggest pitfalls, I might have a business owner contact me to do some strategy sessions, do some consulting to help them sell their business or get it ready to sell.
26:54
Kathleen: I don't sell, I don't sell businesses, but I help set it up to be sellable.
26:58
Kathleen: And they'll say,"I, I want to list it next month." And this isn't...
27:04
Kathleen: Unless you've been all along doing the things, the systems and the record keeping and building the relationships, it isn't something that can happen overnight.
27:12
Kathleen: Just as if I needed to sell my house, I'm not gonna list it tomorrow.
27:16
Kathleen: I've got all kinds of things I need to do.
27:18
Kathleen: So a pitfall to avoid is to not plan ahead and to wait till something life-changing- Yeah or catastrophic happens, like me, okay?
27:28
Kathleen: So I wanna...
27:29
Kathleen: It would be amazing if I could have said in 2008 all this happened, I got my diagnosis, and I had everything in place and we just rolled.
27:36
Kathleen: It's not how it was.
27:37
Gretchen: Mm-hmm.
27:38
Kathleen: And that forced me to take a hard look at my business, and I think that's, um, one of the ways that I'm able to help others is because I lived it.
27:47
Kathleen: I sat in that going,"Oh my goodness.
27:49
Kathleen: We're gonna go under.
27:50
Kathleen: We're gonna close.
27:51
Kathleen: Okay, wait.
27:52
Kathleen: I can keep it, put systems in place, keep it going, and, and then sell it." So that would be the first pitfall is- Mm-hmm not to plan ahead and wait until, like, a catastrophic event happens.
28:05
Kathleen: Um, a couple of practical pitfalls to avoid- Yeah.
28:09
Gretchen: Let's
28:09
Kathleen: get
28:10
Gretchen: practical
28:10
Kathleen: Okay, let's get practical.
28:11
Kathleen: Mixing your business and personal-
28:13
Gretchen: Uh-huh
28:14
Kathleen: bank accounts.
28:15
Kathleen: And so when you go to due diligence, you're laying out everything.
28:19
Kathleen: And, and due diligence, of course, just like when, um, you're selling a house, and they wanna come in and they want to investigate, and they want to make sure everything's working.
28:27
Kathleen: There's a due diligence process when you sell a business where they get to look at everything.
28:33
Kathleen: They look at, um, you know, your revenue spreadsheets, your expenses.
28:38
Kathleen: I mean, they...
28:39
Kathleen: Your tax, you know, your taxes, every- they look at everything.
28:43
Kathleen: And if you have your personal intertwined- Mm-hmm it becomes very murky.
28:48
Gretchen: Yeah.
28:49
Kathleen: Um, and I remember during, um, due diligence, the new owners had brought a couple of accountants with them, and they had commented that it, um, you know, that it was going well because it was separated out.
29:03
Kathleen: So just, you know, as you're planning ahead, if you do have them intertwined, go ahead and, and separate them.
29:10
Kathleen: Another practical, um, suggestion or a pitfall to avoid is failing to maintain those monthly revenue and expense sheets.
29:18
Kathleen: Mm.
29:19
Kathleen: Because the business was eight years old, I needed to produce eight years of revenue and expense sheets, and it would've been really difficult to go back and to tr- I mean, I probably could've.
29:29
Kathleen: It probably would've taken me weeks to go back- Mm and to try to fill in those numbers.
29:33
Kathleen: And so, um, in the course I show some very, very simplistic Excel spreadsheet basically where you're just documenting your monthly revenue all on one sheet, your expenses al- so I basically had two sheets for every year.
29:47
Kathleen: Yeah.
29:47
Kathleen: That's it.
29:48
Kathleen: It does not ha- We don't have to overcomplicate.
29:50
Kathleen: But a potential buyer wants to see those and then make sure they match the bank account so that-
29:56
Gretchen: Oh
29:56
Kathleen: they wanna make sure,'cause we could put anything- Wow
30:00
Gretchen: in a spreadsheet.
30:01
Gretchen: Yeah.
30:01
Gretchen: You know what's interesting here is that I've changed bookkeeping systems several times, and I don't know that I can easily come up with what you're saying.
30:09
Gretchen: I had it all.
30:10
Gretchen: Mm.
30:10
Gretchen: I had it all, but when we left, like it was started in Quicken, then QuickBooks, then- Yes this other thing, then this online thing, then I moved to this other thing, then I...
30:19
Gretchen: And so I mean, I, I have it all in my taxes in some way, but not the neat and orderly monthly-
30:24
Kathleen: Yes
30:25
Gretchen: breakdown.
30:25
Gretchen: So that's a really interesting thing- Yeah to go back.
30:29
Gretchen: I mean, it's, it's possible to go back and find all of that- Mm-hmm information, but it will take- It is so long.
30:33
Gretchen: I can see how choosing to have one of my virtual assistants, like for me to find the information- Mm-hmm and for them to go back and make the spreadsheet could be- That's great a really good idea.
30:44
Kathleen: And it's also something, look, moving forward, okay?
30:46
Kathleen: Mm-hmm.
30:46
Kathleen: Moving forward I'm gonna start...
30:48
Kathleen: And you know, you can use whatever system you want.
30:51
Kathleen: I also, on top of using, you know, different systems, I did just keep a basic one-page spreadsheet that had, I think I showed in the course, um, and put in some fictional numbers and blocked out- Yeah student names, but it showed I could hand one sheet to show-
31:06
Gretchen: Mm-hmm
31:07
Kathleen: The revenue, you know- Yeah for the entire year.
31:10
Gretchen: Yeah.
31:10
Kathleen: That's great.
31:10
Kathleen: But, um, a lot of people use QuickBooks, use wh- you know, but I also supplement it with just having that document.
31:16
Kathleen: I
31:16
Gretchen: like that.
31:17
Gretchen: Also, you know, we learn in the Anti-Boring Learning Lab the, the power of honing your notes.
31:21
Gretchen: Mm-hmm.
31:22
Gretchen: And so that's, that's like honing, it's not like students' notes- That's right but like your business notes, and it's not a bad idea to hone them.
31:29
Kathleen: That's right.
31:29
Kathleen: Yeah.
31:29
Kathleen: So of course they could go through QuickBooks, they can go through everything and look.
31:33
Kathleen: Mm-hmm.
31:33
Kathleen: But I also want it to, you know, be like, here, here's 2007.
31:38
Kathleen: Yes.
31:38
Kathleen: This is the, um-
31:40
Gretchen: Yes
31:40
Kathleen: revenue for the year.
31:42
Kathleen: Yeah.
31:42
Kathleen: And it breaks it down by- Yeah student.
31:44
Kathleen: And, um, so that would just be something to think about.
31:48
Kathleen: Um, and then the last pitfall to avoid, and I think we touched upon it briefly already, is just assuming that your business does not have value.
31:56
Kathleen: Mm-hmm.
31:56
Kathleen: Um, you know, if you're generating revenue, if you have systems in place, you have transferable knowledge or transferable systems, your business potentially could have value.
32:08
Gretchen: Mm-hmm.
32:09
Gretchen: Okay, so let's just get back to this quest- I think we're gonna have to constantly come back to the question, like, yeah, but I'm the one coaching.
32:17
Gretchen: My students depend on me coaching in a certain way.
32:20
Gretchen: I'm the one who has done 30 years of training- Hmm to, to build my toolkit.
32:25
Gretchen: Like in the learning lab, we talk about toolkits, not curriculum, and so we've, like, built our tools.
32:30
Gretchen: How the heck could I...
32:33
Gretchen: Like, nobody's- Yeah gonna replicate it the way I did.
32:37
Gretchen: So- Hmm I mean, is, are there some people who just wouldn't?
32:40
Gretchen: You could sell maybe part of it, but not-
32:42
Kathleen: Yes
32:43
Gretchen: all
32:43
Kathleen: of it?
32:43
Kathleen: There is, there is...
32:45
Kathleen: That's such a good point, Gretchen.
32:46
Kathleen: There are s- several ways to look at this, and it would really just depend on the individual business.
32:51
Kathleen: But one of the thing, if you are a person like that who's been doing this 30 years, and it's sort of just you are the business, uh, but you know you would love to sell, you're nearing retirement, one of the things you can start to do is to shift, to start shifting the value from you as the product- Mm to your system, to your methods- Mm to your brand, your outcomes, your framework.
33:16
Kathleen: Mm-hmm.
33:17
Kathleen: So that, um, you know, where you're turning your expertise into, like, a repeatable method.
33:25
Kathleen: Mm-hmm.
33:25
Kathleen: And, you know, you can do this by creating, like, a recognizable framework that others can deliver.
33:33
Kathleen: Um, do- You know, uh, I, I, uh, have a podcast, The Tutor Mentor- Mm and I was usually interview other educators.
33:41
Kathleen: But I am gonna ask, I have a friend here in, in, uh, my North Carolina town that has, um, created a framework that has allowed him to have 70,000 members, because he's created a framework that others can replicate, other coaches can replicate.
33:58
Kathleen: Mm.
33:58
Kathleen: When he was overwhelmed and thought it was just him, and- Mm and he is a, um, bigger than life personality w- that everything was built around.
34:06
Kathleen: And so- Mm I'm gonna have an upcoming podcast- Okay episode to talk about how he did that.
34:10
Kathleen: Yeah, yeah.
34:10
Kathleen: And so, um, we can delve a little deeper.
34:12
Kathleen: But, um, there's a...
34:15
Kathleen: Let me just offer, there are lots of ways that you could consider how could I still sell the business.
34:20
Kathleen: Let's look at two.
34:21
Kathleen: Okay.
34:21
Kathleen: Okay?
34:22
Kathleen: So the first way is to become a transition partner.
34:27
Gretchen: Mm-hmm.
34:27
Kathleen: So let's just say, Gretchen, that you were going to, to buy my business, and you were gonna take over everything that I'm doing.
34:35
Kathleen: What...
34:36
Kathleen: We would become one.
34:37
Kathleen: So I would introduce you to my community, to the Tutor Mentor community, to the Our Learning Studio community, and introduce you, and now everything is going to be signed from Kathleen and Gretchen.
34:50
Kathleen: Mm.
34:50
Kathleen: And we are going to transition over a 6 to 12-month period where be- they become familiar with you, they begin to like you, they begin to trust you.
35:00
Kathleen: They see that I trust you.
35:02
Kathleen: I'm also
35:03
Gretchen: doing- And maybe I take on some of your student sessions, and I do them sometimes- Mm.
35:08
Gretchen: Mm or a couple of your clients, I take them on fully.
35:11
Kathleen: Yes.
35:12
Gretchen: Mm-hmm.
35:13
Kathleen: Or you may be, um, leading some of the parent workshops- Mm-hmm that I do, like the executive function- Mm parent workshops.
35:19
Kathleen: Mm-hmm.
35:19
Kathleen: And it's a gradual, where you stay on for 6 to 12 months- Mm-hmm and then you phase out.
35:27
Kathleen: And that would be called being a transition partner- Yeah, great um, in selling a business.
35:32
Kathleen: And that, um, you know, when I sold to the new owners, we did 40 hours of training over a 30-day period, because they were taking over, like a system, a team, a, you know, in-person, um, business.
35:48
Kathleen: But I have mine set up that if at any point that I decided that it was time for me to leave, I would hate to just shut it all down- Mm-hmm because I serve lots of families, lots of business owners, and I have spent, you know, the last, I don't know, eight years building, um, courses and building all of the things that I would love for someone who was like-minded, uh, to be able to step into.
36:11
Kathleen: So that would be one way, is to have sort of a, a trans- a transition partner.
36:18
Kathleen: The other way would be for a new, um, a different owner to purchase your intellectual property-
36:25
Gretchen: Mm-hmm
36:26
Kathleen: and fold it into their own business.
36:28
Kathleen: Mm-hmm.
36:30
Kathleen: Okay?
36:30
Kathleen: So an example in my business, I have a signature writing program called Writing Workshop: Building the Basics.
36:38
Kathleen: Spent nine months building this writing community, and I offer it one time a year, and it's just fabulous time with these, uh, writers.
36:47
Kathleen: And, um- That course is hybrid.
36:51
Kathleen: It's, you know, self-paced, you know, video, instructional videos with a drop-in office hour, and then some instruct- uh, feedback videos to the students.
37:01
Kathleen: Uh, someone could easily fold that entire teachable program into theirs.
37:06
Kathleen: They, um, all of my small groups that I've created, small group is Test Detectives, test preparation, Super Spellers, Reading Club, all of those things could be folded.
37:15
Kathleen: You know, the marketing materials, the course outcomes, the course outline, the curriculum.
37:21
Kathleen: So that they aren't taking over our learning studio- Mm-hmm but they're taking over the intellectual property.
37:27
Kathleen: Mm-hmm.
37:27
Kathleen: Um, articles I've written.
37:28
Kathleen: When I sold my tutoring center, they, um, then had all rights to all intellectual property.
37:34
Kathleen: So any articles I had written for a local magazine became theirs.
37:38
Kathleen: Any, any intellectual property.
37:40
Kathleen: So those would be two ways to consider, or really three.
37:44
Kathleen: One, start to shift away from you being the center of everything to more being your brand, your framework.
37:51
Gretchen: Mm-hmm.
37:52
Kathleen: The second way is to be a transition partner, and the third is for someone to purchase all of your intellectual property, your methods, your framework, and fold it into their own business.
38:02
Gretchen: Well, the other thing I'm thinking, and thank you, that's so helpful.
38:05
Gretchen: That calmed down the voices in my head, the objection ones.
38:09
Gretchen: Mm-hmm.
38:09
Gretchen: But I'm also just remind, being reminded that it's like it's not our business what other people would find valuable.
38:16
Kathleen: Mm-hmm.
38:16
Gretchen: And maybe we're not gonna sell everything for a huge amount, but maybe there is maybe our email list and our referral partners.
38:25
Gretchen: Mm-hmm, mm-hmm.
38:25
Gretchen: Um, there's some value to that, alongside our systems, uh, or an outline for how we generally did or ran our sessions.
38:34
Gretchen: Mm-hmm.
38:34
Gretchen: Like, there's something likely that's more valuable than$0, which we would- That's right if we didn't try and sell, we wouldn't get.
38:43
Kathleen: That's right.
38:44
Gretchen: And we get to...
38:45
Gretchen: It's just not our business what people are gonna find valuable.
38:48
Gretchen: And so why- That's true not glean from, gain from that?
38:53
Kathleen: That's such a good point, and if you started making a list of your assets.
38:57
Gretchen: Mm-hmm.
38:58
Kathleen: And most people think,"Oh, well, that means, like, physical, you know, my furniture-" Mm-hmm or things like..." And, but if you really start to make a list of your intellectual property, Gretchen, with your, your incredible community, with your, um, Anti-Boring Learning Lab, I mean, within that you have so much intellectual property.
39:15
Kathleen: Yes.
39:15
Kathleen: It's just, um, if you started to really list out every course you have in there- Mm-hmm every framework- Yeah every article you've written, there is a great deal of value there.
39:26
Gretchen: Yeah.
39:26
Kathleen: It could be your referral network, your, like you said, your email list, your client base.
39:31
Kathleen: It could be so many different things.
39:33
Kathleen: So it's not- Yeah just a- Uh, a black and white answer there
39:38
Gretchen: Well, and it's interesting, the other thought that's come up for me,'cause I'm obviously, I think, a personality-based business.
39:44
Gretchen: I mean, you're right.
39:44
Gretchen: I have all- Yes of this asset.
39:46
Gretchen: But people show up for Gretchen's quirky- authentic, compassionate- Mm-hmm whatever it is, that's me.
39:55
Gretchen: People are showing up for that, and we had proof.
39:57
Gretchen: I was away for six months, uh, have, after a surgery.
40:01
Gretchen: Mm-hmm.
40:01
Gretchen: This was in 2023, and people stayed in the lab.
40:06
Gretchen: Uh, volunteers did the, ran the calls.
40:09
Gretchen: Mm-hmm.
40:09
Gretchen: Um, and folks stayed, but I think if I had been gone, been gone for two years, people would have left.
40:15
Gretchen: Um- Mm-hmm and so it was just something, and one of my lessons was...
40:18
Gretchen: Like, there were f- there was less attendance at calls, and I was like- Mm-hmm"Oh, okay, that told me my business depends on me." But what I'm hearing from you is that, yeah, if I were to sell it to somebody, I would just need to find somebody who's equally as them as I am me.
40:38
Gretchen: Yes.
40:39
Gretchen: And it's highly possible that the right personality could really step into the shoes, and that person would be a little different than me, but as equally somebody who holds space well for coaches to learn and grow alongside each other and have fun while they're doing it.
40:57
Kathleen: That's right.
40:58
Kathleen: As I was reflecting about personality-driven coaching- Mm-hmm businesses, you were the first person I thought about, because you really are at the center- Yeah of, you know, you are the heart and soul of the community because you built it from the ground up, you know?
41:12
Kathleen: And, um, but could someone come in and be a partner with you if you decided I need it to sell- Mm-hmm or, or that you handed over that, or that you- Yeah transitioned.
41:22
Kathleen: I felt like my tutoring center was my heart and soul.
41:26
Kathleen: It was my baby.
41:26
Kathleen: I started that business in a small room in my house, like- Yeah and it turned it into this 4,000 square foot building with a team and an assistant.
41:35
Kathleen: Like, I mean, it w- I had built it from the ground up.
41:38
Kathleen: It was my baby, and I did not...
41:40
Kathleen: I'm like,"I don't know if it's gonna survive without me," and would you know, it was kinda humbling.
41:45
Kathleen: I would say within three weeks, I did the 40 hours of training, transitioned away from the business.
41:50
Kathleen: Within three weeks, I don't think I ever had another email from- Huh a faculty, I mean, business related, you know, from a- Yeah, yeah faculty member, a family.
42:00
Kathleen: Um, you know, the new owners would occasionally touch base, you know, about something- Mm-hmm which I was happy to do.
42:05
Kathleen: But I thought I was so central to keeping everything going.
42:10
Kathleen: Totally.
42:10
Kathleen: And it was a little humbling.
42:12
Kathleen: Yeah.
42:12
Kathleen: But at the same time, fabulous because the, what was the purpose of this transition was to keep the community going.
42:19
Gretchen: Mm-hmm.
42:20
Kathleen: And, and, and they did a fantastic job of supporting the faculty and all of that.
42:25
Kathleen: But, um, yeah, it was a little humbling.
42:28
Gretchen: Mm-hmm.
42:28
Gretchen: Well, even more recently, we have inside the business support program in the lab, we have an accountability cohort that starts every January and August, and if you have a four and a half month project that you're like,"These are the next four and a half months that I really wanna take good action on," blah, blah, blah- Mm-hmm join the cohort.
42:46
Gretchen: I lead it, but this time around, I h- I had set up one peer-led call a month.
42:53
Gretchen: Mm-hmm.
42:53
Gretchen: So that means four total through the course.
42:56
Gretchen: But gosh darn it, those peer-led calls, they just decided,"We don't wanna meet once a month.
43:01
Gretchen: We wanna meet every week, and we wanna meet every week twice." One for co-working and one for- Mm-hmm you know, for just the actual accountability.
43:12
Gretchen: And it turns out they just don't need me.
43:14
Gretchen: I mean, of course they love the calls that I'm at- Yeah and they lean on me for- Mm my years of wisdom that I have about business building, but it really w- was humbling that they were just fine on their own.
43:28
Gretchen: And so that's the other thing I'm noticing is something you can do to set yourself up for eventually selling, even if you don't know if you want to, is just- Mm-hmm look at where are the places in the business where people- Mm can be more self-sufficient.
43:42
Gretchen: Yeah.
43:42
Gretchen: Where my, my student clients could be s- more self-sufficient or my families could be more self-sufficient.
43:47
Gretchen: They're still getting a container of support with me- Mm-hmm but it doesn't depend on my eagle eyes or my-
43:55
Kathleen: That's right
43:55
Gretchen: whatever.
43:56
Kathleen: You remember that, the term we used at the start of the call, that operationally irrelevant.
44:01
Gretchen: Yes.
44:01
Kathleen: How can you take small...
44:03
Kathleen: Now, it doesn't mean I'm just removing myself from the business because it- Yeah but are there small steps that you can take- Mm to make yourself operationally irrelevant?
44:11
Kathleen: And it might have meant- Mm you needed to give the peer-led, um, sessions, give them, like, a Zoom link to meet in.
44:16
Gretchen: Mm-hmm.
44:17
Kathleen: And they kind of took it from there, or, you know.
44:19
Kathleen: Mm-hmm.
44:19
Kathleen: Um, and then you could remove yourself.
44:22
Kathleen: Are there other aspects of your business that you can start to gradually- Mm-hmm make yourself a little more irrelevant?
44:28
Kathleen: Mm-hmm.
44:29
Kathleen: Um, I know you have an assistant, and so I know that, you know, she, she handles some things so that so you don't have to do everything- Mm or everything's not up here.
44:38
Kathleen: You have- Mm um, systems.
44:41
Kathleen: But that also says something about what you've created, the community you've created.
44:46
Kathleen: Mm.
44:46
Kathleen: That they, you know, that someone can just do a peer led.
44:49
Kathleen: You've created a safe community- Mm where people feel comfortable.
44:53
Kathleen: You know, because it is vulnerable when you're talking about your business and, or clients that, um, you're serving.
45:00
Kathleen: It's a vulnerable space, and you've created that safe community.
45:03
Gretchen: Oh, well, thank you- for saying all of that.
45:07
Gretchen: Um, I want to be mindful of our time, and I, I just checked through our questions, and I think we've really talked through most everything.
45:14
Gretchen: And I thought one, um, one way to end might be to look at Patrick's question.
45:19
Gretchen: He's the community member that you mentioned- Yeah earlier, just to make sure we hit on...
45:22
Gretchen: 'Cause Patrick just had such- Okay a nice, detailed-
45:24
Kathleen: He,
45:25
Gretchen: yes set of questions.
45:26
Gretchen: He's excellent.
45:26
Kathleen: So
45:27
Gretchen: I think we've hit them all, but let's see.
45:29
Gretchen: His first one was,"What actually makes a business sellable in practical terms?" I think we've covered that.
45:35
Gretchen: Mm-hmm, mm-hmm.
45:36
Gretchen: And then he said,"Is it mostly about hitting a certain revenue or profit threshold?" And I think the answer is no-
45:42
Kathleen: Right
45:42
Gretchen: to that.
45:43
Gretchen: Is that true?
45:44
Kathleen: That's true.
45:44
Gretchen: Yeah.
45:45
Gretchen: Mm-hmm.
45:45
Gretchen: Or is it more about having transferable assets and systems, things like products, curriculum, an email list, recurring clients, SOPs, et cetera?
45:53
Gretchen: Yes.
45:55
Gretchen: Yeah.
45:55
Gretchen: This is my quiz.
45:56
Gretchen: You're- Yeah I'm quizzing myself about what I've learned from you through Patrick's questions, and you can tell me if I'm wrong.
46:02
Kathleen: Yeah.
46:03
Gretchen: Um, then how does this apply to expertise-based businesses that are built heavily around one person's relationships, personality, or coaching style?
46:12
Gretchen: Uh, I feel like we've done that.
46:15
Gretchen: We've talked about that.
46:16
Gretchen: Mm-hmm.
46:16
Gretchen: How does selling a coaching or consulting business differ from selling something like a tutoring center, a therapy practice, or a laundromat that has a physical location, employees, and more obvious infrastructure?
46:27
Gretchen: I think we've hit on that.
46:29
Kathleen: I think we did too.
46:30
Gretchen: Oh, my goodness.
46:31
Gretchen: And, uh-
46:32
Kathleen: Pat- Patrick asked such great questions, though.
46:33
Kathleen: Mm-hmm.
46:34
Kathleen: I love the, the direction he was going.
46:37
Kathleen: Like, what he's...
46:37
Kathleen: Because he's already thinking through- Yeah all of those, um, aspects.
46:42
Kathleen: And, um- Yes.
46:43
Gretchen: Well, and his last one, I just wanna end on this,'cause I do think...
46:47
Gretchen: Uh, so he said,"At what point does a solo service business become an asset inste- instead of just self-employment?" And it sounds like- Okay at any point, as long as you are documenting what you are doing.
47:01
Kathleen: Yes.
47:03
Kathleen: And I would say, you know, there, there's a difference between creating a job for yourself and creating a business.
47:10
Kathleen: Mm.
47:10
Kathleen: And I go over this in the course too, where we talk about it is totally fine that you're creating a job.
47:16
Kathleen: Mm-hmm.
47:16
Kathleen: A job is not sellable.
47:18
Kathleen: That's what I did when I, um, way back in the'90s when I was, you know, teaching fifth grade and had a few students, you know, that I saw after school.
47:26
Kathleen: That was a job.
47:27
Kathleen: That wasn't a business.
47:28
Kathleen: What becomes a business is when you have systems.
47:32
Kathleen: You have, you know, policies, procedures.
47:34
Kathleen: You have, um, transferable systems- Mm-hmm um, that, um...
47:41
Kathleen: And I think he said something about revenue.
47:44
Kathleen: Um, you know, of course the value of your business is gonna be heavily driven on your revenue, you know, mon- versus your expenses.
47:52
Kathleen: Um, but, you know, a, a potential buyer is going to be looking at the trajectory.
47:57
Kathleen: Right.
47:57
Kathleen: Um, and in the course I even show the, the graph that my business broker made and put in the- Oh, cool um, listing that shows, you know, that even when I was away with surgeries and treatments, because of the- incredible team.
48:12
Kathleen: But the, that revenue just continued to grow- Oh year after year.
48:16
Kathleen: Okay.
48:16
Kathleen: But I also had put systems in place- Mm-hmm so that it could run- Yeah without me.
48:21
Kathleen: Beautiful.
48:22
Kathleen: Um, but as far as your solo, it's the same thing with a solo practice.
48:26
Kathleen: Mm-hmm.
48:26
Kathleen: You know, I have my revenue spreadsheets I'm showing year over year.
48:29
Kathleen: You wanna see that trajectory, but also that untapped.
48:32
Kathleen: Always be thinking about, like, what is that untapped- Mm-hmm revenue potential.
48:37
Gretchen: Yes.
48:38
Gretchen: Yes.
48:39
Gretchen: Untapped revenue potential.
48:42
Kathleen: Yeah.
48:42
Kathleen: Because that's appealing.
48:44
Kathleen: You know, most buyers don't wanna buy a business that's tapped out.
48:46
Kathleen: Right.
48:47
Kathleen: That's like,"This is as high as we're ever going to be able to go." Right.
48:51
Kathleen: They want to see that they can put their own touch on it.
48:54
Kathleen: Yeah.
48:54
Kathleen: Um, and you may have ideas.
48:56
Kathleen: There were certain things I had ideas for, but I didn't really wanna implement.
48:59
Kathleen: You know?
49:00
Kathleen: Mm-hmm.
49:00
Kathleen: Just like that sa- you know, you may have the skill and you may have the time, doesn't mean that it's yours to do.
49:05
Gretchen: Yeah.
49:05
Kathleen: Right?
49:06
Kathleen: Um, and so, but it can be listed as your untapped potential.
49:11
Gretchen: So tell us about this course that you- Yeah um, have.
49:15
Gretchen: I, I do plan to take it.
49:16
Gretchen: Not, not in this moment, I have enough going on this summer.
49:18
Gretchen: But I really think it's gonna help me do some things- Mm-hmm that I've been wa- I've been wanting to get more clear about my systems for the longest time now.
49:27
Gretchen: And, and what I love is that I'm not just getting clear to get clear, but I'm getting clear because I got my big girl business boss pants on, and I wanna do my best to- That's true set it up to be able to make money at the end- Mm-hmm when I'm ready to transition.
49:44
Gretchen: Yes.
49:44
Kathleen: I love that.
49:46
Gretchen: Mm-hmm.
49:47
Kathleen: Okay.
49:47
Kathleen: Well, the course is called Ha- um, How to Set Up Your Business Now- Mm-hmm to be Sellable in the Future.
49:55
Kathleen: And it is jam-packed.
49:56
Kathleen: It's, um, two 30-plus minute videos and a checklist sort of to guide you through.
50:03
Kathleen: Um, and it's not a course on, like, okay, how do I sell my business?
50:08
Kathleen: It's, how do I set it up now-
50:11
Gretchen: Mm-hmm
50:11
Kathleen: to be sellable in the future?
50:12
Kathleen: In the future.
50:13
Kathleen: And I made it couple and that's'cause there's so much in there.
50:17
Kathleen: So some of the topics we, um, cover, everything from, you know, creating a business versus creating a job.
50:23
Kathleen: How do you make sure that you're making a, a business, not a job?
50:26
Kathleen: Um, developing systems.
50:29
Kathleen: We go through record keeping.
50:30
Kathleen: What sort of records do they want to see at due diligence- Mm so that you're not caught off guard going,"I didn't maintain that." Um, how to create goodwill value.
50:42
Kathleen: Like I said, 95% of that six-figure net profit came from intangibles.
50:47
Kathleen: Just the loyal client base and reputation and those things.
50:50
Kathleen: But how do we create that over the years?
50:53
Kathleen: We go over decluttering your business.
50:55
Kathleen: No one wants to buy a house that is complete- cluttered or a hoarder, right?
50:59
Kathleen: They, you know, decluttering your business.
51:02
Kathleen: Your, either your physical space or your digital s- if you are virtual-
51:06
Gretchen: Mm-hmm
51:06
Kathleen: is your digital space so organized that somebody could come in and access all of your, um, intellectual property.
51:13
Kathleen: We go over creating a state of the business binder.
51:16
Kathleen: Um, and then we get into some bonus content, how I used a business broker, um, to sell my business, how to prepare for due diligence, and then we really get into transitioning to new ownership.
51:27
Kathleen: What sort of...
51:28
Kathleen: I show the letter that I gave to the community, the press release we sent out to the local media.
51:34
Kathleen: Um, we go over parts of a business listing confidential memo, how to make a seasonality index.
51:42
Kathleen: I mean, it just, it's jam-packed.
51:44
Kathleen: Oh, great Um, and so the goal at the end of that course is just that you have, like, step-by-step directions that you c- you know, practical steps- Mm-hmm that you can take to set your business up now to be sellable in the future.
51:57
Kathleen: And if you don't plan to sell in this next year, you could just take maybe one of these suggestions a month- Mm-hmm and focus on it.
52:04
Kathleen: And the next month you may be looking at,"I need to make a fixed asset list," or just breaking it down.
52:09
Kathleen: Yeah.
52:09
Kathleen: Um...
52:10
Gretchen: I love that idea.
52:11
Gretchen: And in fact, it occurred to me when I'm ready to take it, I often use the Anti-Boring Learning Lab as accountability to do the things I need to do anyway.
52:18
Gretchen: Mm.
52:18
Gretchen: I think what I might do is find out, is there a small team of folks who want to take it along with me who are in our, our, our, the, our biz corner inside- Mm-hmm the lab.
52:28
Gretchen: Yeah.
52:28
Gretchen: And, and then work on it together and have co-working- Mm sessions where we do some of those tasks together.
52:34
Kathleen: I mean- That's such a good idea.
52:35
Kathleen: Yeah.
52:35
Kathleen: I mean, having that peer support and accountability is so helpful.
52:38
Kathleen: Yeah.
52:39
Kathleen: Many times after someone takes the course, they do come to me for, like, one-on-one- Mm strategy sessions.
52:44
Kathleen: And so I love if they've already taken the course, so we can use that precious strategy time- Mm-hmm to really look at their business, not- Mm-hmm the steps, you know, that are in the course- Yeah but, like, let's do it.
52:55
Kathleen: Let's, you know, get into your business, and let's get it set up.
52:58
Kathleen: Mm-hmm.
53:00
Kathleen: So I'm very passionate about it because I do feel like we tend to make ourselves small and we don't see the value in the impact we make.
53:08
Kathleen: Yeah.
53:08
Kathleen: And also, it's okay to look at the financial side- Right of your, you know, and feel empowered-
53:15
Gretchen: Right
53:15
Kathleen: by being able to generate revenue.
53:18
Gretchen: Yeah.
53:19
Gretchen: Well, I'm so grateful that you are here.
53:21
Gretchen: This has been very inspiring to me.
53:24
Gretchen: Uh, we are both on YouTube and in a podcast, so we'll put links in the show notes.
53:29
Gretchen: But just to have it auditorily, what can people Google or is there an easy website where they can, if they just wanna jump in and take the, the class?
53:38
Kathleen: Sure.
53:39
Kathleen: If you just go to my website, ourlearningstudio.com, and you'll see a link there.
53:45
Kathleen: Um, it says tutoring, business center support, but it's really for other businesses as well.
53:51
Kathleen: And you'll see, when you click on that, you'll see a link to the Tutor Mentor Podcast, to online courses, and then to- Mm-hmm consultations.
53:57
Kathleen: Mm-hmm.
53:59
Gretchen: Great.
53:59
Gretchen: And if you want to, want, uh, Kathleen to know that I sent you, you can use the links that are in the show notes- Mm and on YouTube because those will let her know that, uh- That's me you came
54:12
Kathleen: through me.
54:12
Kathleen: Fantastic.
54:12
Gretchen: Okay.
54:13
Gretchen: Yeah.
54:13
Gretchen: Last quick little question.
54:14
Gretchen: Uh, because this is the Anti-Boring Learning Lab, I wanted to know, what did you do when you were a kid when you were bored?
54:22
Kathleen: Oh, my goodness.
54:23
Kathleen: Okay, so this is totally gonna age me.
54:25
Gretchen: Uh-huh.
54:26
Gretchen: Go for it.
54:28
Kathleen: But do you remember Light Bright?
54:31
Gretchen: Yes, of course.
54:32
Gretchen: Light Bright.
54:32
Kathleen: Yeah.
54:33
Kathleen: Something like Light Bright, um, Color Forms.
54:36
Kathleen: Do you remember?
54:39
Kathleen: Uh-huh.
54:39
Kathleen: Yeah.
54:39
Kathleen: I had- Super
54:40
Gretchen: visual and pretty and making
54:42
Kathleen: shit.
54:42
Kathleen: Yes.
54:42
Kathleen: And I had three siblings, so was not bored very often.
54:48
Kathleen: But, you know, you know, growing up in Pittsburgh just, yeah- Yeah and on a fabulous cul-de-sac street with-
54:55
Gretchen: Oh
54:56
Kathleen: kids that I'm still friends with till today.
54:58
Kathleen: Yeah.
54:58
Kathleen: So it's a...
54:59
Kathleen: Yeah.
55:01
Gretchen: Well, it probably won't surprise anybody to know that I just did a lot of imagination play- Yeah and play acting and...
55:09
Kathleen: I, Gretchen, I believe it.
55:11
Kathleen: You are creative and yes.
55:15
Gretchen: Yes.
55:16
Gretchen: All right.
55:16
Gretchen: Well, thank you so much, Kathleen.
55:18
Gretchen: Everyone go check out her stuff or join the Learning Lab and become- Mm a part of our work group- Mm where we work through her course together.
55:26
Gretchen: There's that, too.
55:26
Gretchen: Great.
55:28
Gretchen: All right.
55:29
Gretchen: Bye, everyone.