Laurie Barkman – Creating Life-Changing Succession Stories (456)

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Episode transcript below:

00:00 – Mike Malatesta (Host)
Hi everyone. Mike Malatesta here and welcome back to the how it Happened podcast. On this podcast, I dig in deep with every guest to explore the roots of their success, to discover not just how it happened but why it matters. My mission is to find and share stories that inspire, activate and maximize the greatness in you. On today’s episode, I’m talking to my very first business transition, sherpa, and I know what you’re thinking. What’s that? Well, you’ll find out soon enough. Lori Barkman is also a podcast host, author and a Howard Stern fan. We talk about how to prepare for a big interview, push and pull factors, getting her green jacket. That’s a master’s reference, and a ton more. We also paid a quick tribute to Charlie Munger, who passed away the day before we recorded this episode.

00:55 – Laurie Barkman (Guest)
This is something I want to do in working with business owners to help them from transition to transaction. How do I help them pre-M&A, how do I help them understand what they could do to have a transferable, attractive, ready business? And then, what do they need to do? From the personal standpoint also, it’s the transaction, it’s the numbers, it’s all the spreadsheets, but then there’s this human element, and I really have focused on that the last three plus years of building a business. What’s it worth? How do we move on this continuum of transition? So, yes, exit planning, yes that word, but I use the word transition mostly because I think it’s more of an umbrella word and it’s a movement, it’s a position from here to there as opposed to one point in time.

01:46 – Mike Malatesta (Host)
This episode is sponsored by the Dream Exit. The Dream Exit is a private, bespoke program for successful entrepreneurs with annual revenue between $5 million and $100 million who realize that they have one chance to get their Dream Exit right and that the odds of realizing that dream by themselves, all alone or at the last minute are stacked against them. In less than 90 days, we teach you how to design, build and execute a customized Dream Exit playbook that gets your business ready for sale at its maximum value and gets you ready to maximize your meaning and purpose in your post exit life, even if today you are not ready to sell. You see, dream Exits just don’t happen. They are the result of early, professional and proven planning. So if you’re an entrepreneur with annual sales between $5 and $100 million and you want to learn how to 10X to 100X your chances of achieving the Dream Exit you deserve, go to dreamexitplaybookcom today. So now here’s Lori. Hello Lori, welcome to the how Did it Happen Show.

02:58 – Laurie Barkman (Guest)
Hi, mike, it’s so great to be with you. Thanks for having me today.

03:01 – Mike Malatesta (Host)
Well, thank you. Thank you for being here. I sort of prepped myself by watching some of your YouTube videos, which I didn’t watch one with a guest, I only watched one that you did solo, and you do an amazing job with your solos. It’s just slam-packed with great information. You got a great delivery and I learned a few things listening to what I listened to. So if I can learn something, then almost anybody can listen to you and learn something new. So congratulations.

03:34 – Laurie Barkman (Guest)
Well, thank you, that’s a high compliment.

03:37 – Mike Malatesta (Host)
So let me tell you a little bit more about Lori Barkman. She is the business transition Sherpa. I love that. By the way, she’s the former CEO of a $100 million revenue company that was sold to a Fortune 50 company that I believe goes by the name of FedEx. Is that correct? That is correct. As a Mergers and Acquisitions Advisor, Lori provides a structured process for business owners to plan successful transitions of their companies. She is the author of the business transition handbook. The subtitle is how to Avoid Succession Pitfalls and Create Valuable Exit Options.

04:17
Lori is also an adjunct professor of entrepreneurship at Carnegie Mellon University and hosts the award-winning podcast Succession Stories, which I was talking about, where she speaks with hundreds of entrepreneurs who have shared their journeys through succession. So take a listen to Succession Stories by Lori’s book, the Business Transition Handbook, On Amazon or wherever you get your books. She even offers, I think, a PDF of the book on her website, but we’ll get into that later, and I was looking through your list of the people that you’ve had on your show. As you might imagine, we have a little bit of commonality with guests and Sarah.

04:57 – Laurie Barkman (Guest)
Dusik.

04:58 – Mike Malatesta (Host)
She was so great I loved her story about if you don’t remember that episode she and her husband kind of created the glamping industry, this real glamorous camping thing, and I can’t remember who she sold it to and all that. But anyway, a wonderful person who now lives in South Africa, I believe, and she’s doing great work there as well. So it’s always cool to see the crossover when you talk to people who have shows. So enough of me, lori. How did it happen for you?

05:31 – Laurie Barkman (Guest)
I was hired in as an outside CEO in a family business. I was hired in for a long-term succession plan so the CEO of my business unit was retiring he was going to retire moved to Arizona and that’s how I got started. In what you were saying earlier my world is the business transition, Sherpa. So I was in that business with an intention to be part of this third generation family company for 20 plus years. I was really excited for that long-term future and the growth and innovation that I saw in this very mature company was really exciting. It was in the transportation logistics space, great reputation and my business unit was about 10% of the total company. So just to give you that perspective, so I was running a pretty big business unit but the whole business.

06:22 – Mike Malatesta (Host)
So 100 million was 10%. Is that what you’re saying? Yeah, it was. Yes, exactly. It was over a billion dollars of revenue.

06:28 – Laurie Barkman (Guest)
Yeah, exactly, and about a year and a half into my experience was when this Fortune 50 came in knocking and said we’re interested in acquiring the whole company, and it was fascinating to go through that. I mean, you can imagine, a company like that has an incredible playbook, a lot of success in what they do and they know exactly why they’re doing it, and so for me and the other executives that were part of the process, it was incredibly stressful. Right, it was important, we knew everything we needed to do, but we also had to run our jobs day to day and make sure that we kept our foot on the gas. And it was an incredible learning experience also going through the integration afterwards and being part of that and then not being part of it. It was part of the next phase of what can happen in an acquisition like that, where you find yourself on the other side of the chair. So that’s what for me, that’s how it happened, and from there I realized I’m a deal junkie. I kind of like being involved in this world of mergers and acquisitions.

07:31
I spent time as a managing director of a private equity office and focused on the other side of deals and looking at deals and looking at investments and then eventually said you know what? I think this is something I want to do. And working with business owners to help them from transition to transaction. How do I help them pre-M&A, how do I help them understand what they could do to have a transferable, attractive, ready business? And then, what do they need to do? From the personal standpoint also, it’s the transaction, it’s the numbers, it’s all the spreadsheets, but then there’s this human element and I really have focused on that the last three plus years of building a business. What’s it worth? We move on this continuum of transition. So, yes, exit planning, yes, that word, but I use the word transition mostly because I think it’s more of an umbrella word and it’s a movement, it’s a position from here to there as opposed to one point in time. So that’s how I got here, mike.

08:38 – Mike Malatesta (Host)
I like the term transition. I was actually talking to someone yesterday about exits and such, because I talk about that a lot and they use that same word, transition, and I had not really thought about it like that. I mean, obviously it’s a transition, but when you are talking to someone about this is a transition in your life, it sort of gives them some confidence, because they’ve been through many transitions in their lives most people so it’s something that’s got a familiarity to it. At least that’s how I took it when I heard you say it and this gentleman that said it yesterday.

09:16 – Laurie Barkman (Guest)
Yeah, I feel like it’s a word that opens people up to possibilities, whereas sometimes not always, but sometimes the word exit closes people because it feels scary and it feels certain and definitive, whereas transition is a movement and points a long time along in a continuum. But the other thing that I do talk about with my clients and, of course, in the book and you mentioned it in the subtitle is when we are creating options for ourselves. So if we are able to work proactively on building the value of our business and doing the good work to create value for shareholders, ultimately that’s going to have, hopefully, a positive payoff when you’re ready to have a transition, or sell or exit or transition a family, whatever your exit options are. So one of the things I really highlight in the book is this start when you can. You can’t do exit planning. When you’re exiting it’s too late, and the little secret that you know very well is that everything that we work on with clients to help them build a more valuable business is going to make it more enjoyable to run today.

10:36
And why wait 20 years from now, just like when you’re selling your house? I don’t know if you had this experience with your parents, but for mine when they were looking to sell their house. They finally upgraded the kitchen, they finally upgraded the bathroom. They’re like why didn’t we do this when we were living here? Why did we wait till you were selling the house? It’s the same idea. You don’t just dress it up to sell it. You really should dress it up to enjoy and benefit from it all along the way, and that creates a lot of value. So there’s a lots of different aspects of exit planning, and value building is one of them.

11:06 – Mike Malatesta (Host)
That’s a great example. My mom is actually doing that right now.

11:11
Her house goes for showing starting tomorrow, and so she has limited ability compared to what she used to to fix it up and everything. But when you talk about upgrading the bathrooms and all that, it’s usually the best way to do it. The people closest to you you’re not listening to. It’s the person that comes in the real estate agent and says, well, you got to do this, you got to do this, you got to do this. And they’re like, yeah, okay, well, we have to do this. And all of a sudden you start doing it, because it’s just like you hear something from someone close to you and you don’t give it the appropriate consideration that it deserves sometimes, but then you hear it from a quote, unquote expert the exact same thing and you take action on it. You do something, of course, right.

12:00 – Laurie Barkman (Guest)
Absolutely Well. That’s why you and I are in this space. We are able to provide a perspective from an expertise, just like a real estate agent can on a house. So, yes, kitchen’s, bathrooms. We come in and we take a look at the business and try to understand it and understand whatever its strengths and where its opportunities. And the more runway you have to work on those opportunities and challenges, the better off you’re going to be.

12:25 – Mike Malatesta (Host)
So before we geek out more about this particular subject, I’d like to go back a little bit. You kind of said you know you hired in to be the CEO of this $100 million division of a billion plus dollar company, and I’m sure people are thinking like, okay, well, how did Lori get there? Because most people probably can’t see themselves being there. So how did you get there?

12:56 – Laurie Barkman (Guest)
Most of my career prior to being a CEO, was on the growth side business development, marketing strategy and along the way, I had met different executive recruiters and stayed in touch. One of the industries that I was in was retail and e-commerce and it was a fantastic opportunity. I definitely, you know, had a name out there. We were on the front end of a lot of things in digital marketing and so I had this relationship with a recruiter who was focused on e-commerce and just through the years, you know, we would stay in touch and one year he reached out and said I have a CEO position in Pittsburgh, which is where I live, for a privately held company. They are looking for someone with e-commerce experience. And I thought of you and I was like what? You know, the imposter syndrome kicks in. Why me, are you kidding me? And he was telling me about not the names but some of the other resumes of people in the mix, and they were all men and they had big company names like Amazon and this and that, and I just thought what the hell, I’m going to go for it and I started researching how do you interview for CEO job?

14:14
I was going back to the basics and just so curious like what are the questions they might ask me and how do I really prepare? I was I. Whenever I interview, I over prepare. I was just telling him and I found this great article from Forbescom that I ever since and this one did I interview there. I interviewed there in 2013.

14:32
So ever since 2013, when I got in this kick of how do I, how do I think about an executive interview, I learned and the interview is always three things Any question, you can map it to one of three things, and that is strengths, motivations and fit. Any question you get will map to one or more of those categories. So, for example, if someone asks you in an interview, what are your weaknesses, that’s actually a strengths question and I have used it throughout my career. Now, I mean, 2013 is gosh a long time ago, but whether I’m hiring someone or I’m interviewing for something, I always prepare that way, and so that’s how I prepared.

15:12
And then I ended up preparing so much so that I ended up getting the green jacket and was the and was the candidate, as I’ll never forget that. You know hearing those words when they said and the process took like six months. It was not a quick turnaround process, and I think that that was a very good thing, because for that position, they weren’t hiring me for the next two years, they were hiring me for the next 20. And that was really important to them and it was important to me too. I wanted to make sure I was the right fit and I wanted to make sure that I was going to be investing, you know, for this part of my career journey. And, yeah, that’s how it happened.

15:46 – Mike Malatesta (Host)
Okay, the green jacket is a great reference. She’s like the winning, the masters. Yeah, that’s right. How did you so? At the end of it, as you reflected on getting the position, what do you think took you over the top?

16:04 – Laurie Barkman (Guest)
When I met with people, it wasn’t just about me. I got to know them. That was part of it. And then the other part of it was I came in with strategy. Not that I had all the answers, but I had some frameworks and I had done some homework and I had spent a lot of time prepping at a level that just blew everybody away.

16:22 – Mike Malatesta (Host)
Okay fair enough.

16:24 – Laurie Barkman (Guest)
That’s the way to do it, so we gave an inclination that, hey, if she’s going to do this much prep and this much work for an interview, what will she bring to the table? Yeah, Were you surprised when you got it?

16:37 – Mike Malatesta (Host)
Laurie, or did you think it was destiny for you to get it?

16:42 – Laurie Barkman (Guest)
You know you always have sort of these doubts along the way because you’re sort of self-protecting oh, if I don’t get it it’ll be okay. But of course I really wanted it, and the more, as I would say, each time I stepped through a gate and then I knew there was another gate, I’m like, well, I just got to get through the next gate and, as I said earlier, it took six months. So there were a lot of gates and each time I went through a gate it was really validating that for me and then for them, I think for an interview process. Some people say, hire a slow, fire fast, and there’s some truth to that If you really want to make sure and doing different diagnostics. They also had an executive coach involved who not only interviewed me in addition to all these other executives that interviewed me, but this executive coach, who was independent, interviewed me and I completed three leadership diagnostic tools and then in the assessment I get this report. That’s literally like 50 pages. I print it, I read through every page and then I had a debrief call with him. That was more than an hour.

17:46
I don’t think anybody else did that. They could have but they didn’t. And so that was yet another dimension of how I actually cared. I actually cared to see what these results were and how my results compared with others in the company and from a culture fit standpoint. Because, again from my diagnostic of strengths, motivations and fit, I wanted to make sure that I was a good fit. I knew what strengths I was coming in with, I knew what weaknesses I had, I was open-minded about learning and being very coachable in this role because it was my first time as a CEO and I just kept telling myself well, even the president of the United States is the first time they’re president. They learn it as they go and this imposter syndrome eventually went away and it became much more validating every gate I crossed through.

18:29 – Mike Malatesta (Host)
Got it. You’re going into this with a 20-year plus lens, as are the owners. I suppose at that time and a couple of years later, that 20-year lens becomes just that a two-year lens. How did that sit with you?

18:48 – Laurie Barkman (Guest)
It was tough.

18:50
It was tough, I mean, I certainly understood it and as an executive I was part of different conversations and knew some of the groups might be integrated out, but I wanted to be part of this long-term thing. I really was excited about it and so I went through my own emotional transition, to be honest, and it was not easy, just like anything. When you have push factors and you have pull factors, it’s the pull factors that we have potentially more control over and that we get excited about. It’s when we have something that happens to us that we don’t always control, that can put us a bit in a tizzy or it’s a little more of that disconcerting, oh my goodness. I’m not happy about this situation because I didn’t initiate it, I didn’t control it, and when I talk with owners about push factors and pull, it’s the same idea. So I can empathize a bit when we have some things that happen to us as opposed to making it happen. So I feel like that was an important growing aspect for me as an executive to go through something like that.

20:04 – Mike Malatesta (Host)
And when you say use the term push and pull factors for people who don’t know what you mean there. Give me an example.

20:11 – Laurie Barkman (Guest)
So let’s say I’ll turn into a situation where we’re talking about a business owner. If you’ve built a business that you ultimately would like to sell so that you can build another one an example is a pull factor is you’re excited to build your next business, or you’re excited to retire because you want to travel, or you want to be in the grandparent business. That pull factor is something that you’re really looking forward to and it’s pulling you forward, sort of invisibly right, but it’s an energy and you’re motivated for it and so, therefore, you’re open to leaving your current state because you’re going to go to this next state. A push factor feels more like, literally, that like someone’s pushing you out of something as opposed to pulling you into something, and so if it feels a little more negative yeah, that’s what I’m meaning it to be it feels a little more negative.

21:12
Other pull factors we can come up with that list, but buying a business or whatever it is, other push factors can be things like the five or six Ds if you’ve talked about that on your show where it’s divorce, death, disability, disaster, things like COVID that shut us down those can all be push factors too, of reasons why we might want to sell our business, get out of our business.

21:37
So for me in my individual role, I’m just generalizing to my experience as an individual. But when you kind of broaden it out and think about a business owner’s experience with pull and push, ideally we’re creating a situation for ourselves where it’s the pull right. We want to have more positive factors pulling us forward to our next thing as opposed to pushing us out and it doesn’t feel great that emotional side to it as well as the economic side For a business owner. We’ve seen some data that shows if you have more pull factors associated with your business, you’ll see more of that call it price preservation or premium Whereas if you have these negative things the health related bad health, divorce, partnership dissolution, disaster, all those negative things can have a discount on the price of your business.

22:28 – Mike Malatesta (Host)
So there’s a cool inflation there. Blood in the water, sort of thing.

22:33 – Laurie Barkman (Guest)
Yes, the shark starts circling. Yeah, right, right, right.

22:37 – Mike Malatesta (Host)
So the pull sounds to me like driving the bus. Where the push sounds to me like riding the bus, I don’t know if that’s the way you look at it, or not, but it seems like.

22:46 – Laurie Barkman (Guest)
Yeah, I think riding the bus is kind of in the middle which, when I do workshops, I talk about this middle zone which can be a big watch out, because a middle zone to me is complacency, which can lead to customers falling off. If you start to not investing in your business anymore, just riding it out, putting your feet up, just whatever happens happens. Then 10 years later your stature in the market is diminished, your customers are. You don’t have your long-term customers anymore, the fall off on new customers is stark and you go, oh wait a minute, what happened? Well, you took your foot off the gas pedal. So the middle zone is a watch out zone to me and it’s this neutral side of a transition mindset where it’s like, well, I’m just going to kind of let it happen, we’ll see what happens, and in the short term it can probably have no minimal impact on business value. But long term it’s that watch out, that it’s going to creep towards the negative side as opposed to the positive side.

23:52 – Mike Malatesta (Host)
When you see that a lot with business owners, they start to get in a habit of, they build a habit of a day, and that habit of a day often lacks any movement towards the continued improvement of the business. It’s sort of just this is what I want to do during the day, and they sort of abandon sometimes what I consider their responsibility to maximize the value of that business consistently. Ideally every day you’re working on maximizing the value of your business somehow, but it’s easy to get that there’s like a certain inertia. It’s just like exercise, right? If you don’t do it for a few days, it starts to be like well, maybe I don’t need to do it, and so I can see that as being a big watch out zone. But I also see it as for some being, unless it gets pointed out to them, it’s a very comfortable zone. They don’t feel like they’re at risk.

25:01 – Laurie Barkman (Guest)
I guess Right? Yeah, yeah. That’s why I did a whole chapter on it in my book, where I call them the tripwires risk tripwires because you don’t necessarily see them. So if you know what to look for, then you can take action and do something about it. If you choose to ignore or not even look, then you’re less likely to find them and do something.

25:22 – Mike Malatesta (Host)
And make a difference. So you went to Cornell undergrad and I saw that it was labor relations like industrial and labor relations. Is that right?

25:32 – Laurie Barkman (Guest)
That’s correct.

25:33 – Mike Malatesta (Host)
Yes, so at that time, were you on a career path to be a lawyer or a HR professional?

25:42 – Laurie Barkman (Guest)
HR professional, absolutely HR professional. Yeah, I joined Ingersoll Rand Company after I graduated and joined in their management training program.

25:51 – Mike Malatesta (Host)
Okay, got it. So here you are. It’s Okay. Okay, two years in the being CEO, you now have to put all your effort into assisting the owner to get a great outcome, I’m assuming, from this sale. And then you have to assimilate yourself into. Well, you were at a big company compared to almost any company out there, and now you’re going into a giant company and you were there for a couple of years. Maybe what happened there and because that really led to you becoming the business transition surpa that you are right.

26:28 – Laurie Barkman (Guest)
Yeah, and that’s part of the story that I shared earlier. Just to put a bow on it, there was an integration period and my experience was about a year and a half with FedEx and I was an officer of FedEx, which was really exciting Been part of top-level strategy discussions, part of the benefit of being in the role that I was in was planning, which was really exciting and something I’m really good at and then in the original business that I was part of as maintaining executive role there, working on key count strategies and things for our company that we wanted to start to look at a little differently, knowing that there was going to be more of an integration. So one of the big things that we were looking at was how these business units different business units were going to be restructured. So my business unit was restructured, as well as several others. So it’s not straightforward, especially when you have these larger deals.

27:31
So with any company, if my client is doing an acquisition or I’m working buy side or sell side on the M&A front, especially on the buy side, it’s important to think about integration upfront, and so I saw that firsthand. That is what the new parent company was doing, and rightly so, because you can’t wait till the ink is signed on the paperwork to start thinking about integrations too late. They had been talking about integration and ideas. They knew exactly what playbook they were going to run and they had ideas for new business launches that we had worked on. So, in parallel, the integration with the parent company was not only changes to our organization to fit into theirs, but it was also the launch of some new businesses, and that was exciting. So I did also work on that.

28:26 – Mike Malatesta (Host)
Okay, and just one final question on that was were you and the buyer, the FedEx team and your team, sort of working together on transition and integration before the deal closed, or did it start from your end, at least, after the deal closed?

28:52 – Laurie Barkman (Guest)
I think it really ramped up a lot and there was probably some discussions prior to closing, but it was, let’s call it, the 80-20, right that shifted post-closing. But there was definitely an on-ramp where we were starting to have, as it got closer and closer to closing, where our companies executives were having conversations with theirs about the general strategy, if you will Okay.

29:20 – Mike Malatesta (Host)
So what year are we in now 2017?

29:26 – Laurie Barkman (Guest)
It was 2015,. Was the closing?

29:29 – Mike Malatesta (Host)
2015. So sometime in 2016 or 2017, you’re figuring out what’s next for you and how did it get shaped into what you’re doing now? How did it get shaped into you being the Sherpa you are now?

29:51 – Laurie Barkman (Guest)
It started in a variety of ways. Sometimes it just takes us getting a nice shower and getting a big idea and I was really thinking about going on my own. I had set up my shingle in 2012 in a very short timeframe and was kind of in and out of consulting in a very short period of time, but it at least got me out there. I already had an LLC, I already had the name right. I had it was. The focus at that time was something different, but the good news for me was when I was feeling ready to be on my own as an entrepreneur, I wanted to reshape it. I didn’t want to go back into the market doing in 2012,. I was doing marketing strategy and although I’m very good at that, I didn’t want to do that again. I wanted to do something different. So I was thinking about well, what am I good at? What do I enjoy? And strategy planning has been part of my toolkit since I don’t know, call it the early 2000s. I learned from the best, used it at publicly traded companies, startups, everything in between and I thought, okay, I’m going to do strategic planning for blank and so targeting this lower middle market so that was my go-to-market approach was okay, I’m going to focus on strategy planning. But then, because of the network that I had built in professional services, I had learned about this thing called exit planning and how the silver tsunami was coming. And there was all these baby boomers that need to have a succession solution. But they didn’t have one. And I just started putting the dots together and I’m like wait a minute, this is strategic planning, we’re just going to do it in a different way for a different purpose. And so then I started to get certified in different things. So I got certified. I got a certificate from the exit planning institute, I got certified on the Value Builder System platform, I got my certification as an M&A advisor and that’s eventually. You know, I’m summarizing a lot of time here, but eventually that’s how I ended up rolling it all into strategic transition planning, Because the foundational mindset and skill set of what we need to do I already had.

32:16
It was the competency and experience from my experience as an executive going through the process and also these other aspects of learning and training. And the big idea also for me was the podcast. And this day in the shower when I’m like, oh, if I’m going to do a podcast, you know what would I do? And the show Succession had just come out and as I was reflecting on my experience as a CEO, it was about succession. You know, I was brought in as part of a succession plan.

32:49
The sale of the company, you know, to a larger entity was an ownership succession. And this word, succession, just kept in my head and I thought, well, that’s kind of fun, Let me go with that succession stories. So the alliteration, the marketer and me kind of liked it and I thought, you know, I can do a lot with succession stories. I can have a lot of interesting people come on. And then the three pillars of the show are growth, innovation and transition, and those were all things that I felt like I could speak from a position of some strength and knowledge and I felt like, hey, what a great opportunity to bring on some knowledgeable folks educate I’m kind of an educator at heart, I guess, and let’s have some fun with it. And then it ended up being just at the start of COVID and the medium of video was fantastic to have these conversations across the world, meeting people in Africa and different continents, and we’re all talking about the same concepts, which was really fascinating to me, and here we are three years later. So it’s all come together relatively quickly.

33:53 – Mike Malatesta (Host)
So I talked a little bit about my experience with your show at the beginning. I’m curious, podcaster to podcaster, the path of your show from 2020 to now 2023, we’re near the end of 2023. So you’ve been doing it for a while. Have you changed how you approach things? Have you changed who you want to have conversations with? Have you changed the types of conversations that you’re having? How have you evolved? I guess, as your own experience and maybe the marketplace talk to you.

34:35 – Laurie Barkman (Guest)
Yeah, absolutely. I feel like I’ve evolved. I think, from a personal standpoint, I’m much more relaxed. I was so nervous I used to wring my hands under the desk. No one could see it, of course. I didn’t use to in the beginning. I didn’t record video. I changed my mind on that pretty quickly, but initially it was just audio.

34:57
So got more comfortable in the medium for sure, got more comfortable as a host and what it means to be a good listener, what it means to have a good conversation that someone is enjoying. And I know, and you know, there’s people out there listening. We don’t know who they are, we don’t know when they’re listening to us, but we want to have a good experience. We want them to come back, we want them to tell their friends and I’m cognizant that the show is an educational show that you could literally pick up any episode at any time and have it’s got an evergreen nature to it.

35:36
However, it was really interesting during COVID, I couldn’t ignore this global thing happening. So one of the things that I paid attention to during 2020 and part of 2021 was when I would do interviews. It wasn’t about COVID, but COVID made its way into the conversation, so that way, I wasn’t ignoring the obvious. I had a guest who was on and I thanked him for being open because they were making food. It was a food production facility and on video he’s wearing his covered cap and everything and so I wanted to acknowledge he’s open during COVID, that not everybody was.

36:20 – Mike Malatesta (Host)
Yeah, right it’s keeping us fed when it’s important.

36:24 – Laurie Barkman (Guest)
Yeah. So I weaved in. So that was kind of in year one figuring all of that out. I didn’t want it to be where all of these episodes are about COVID and then no one’s going to want to listen to them again. So I kind of did the best I could there and then I’ve only did one in-person video. It was right before COVID everything shut down and it was a fantastic interview and there’s a magic when you’re in the same room with someone and having a conversation, I think.

36:50
So I’ve always tried, when I do now with the video, I try to connect. I try to really connect with my guests and I know, mike, you do the same. It’s important because it makes a difference for the audience if we connect and if we have a good experience together. So I’m mindful of that and I think also using the show as a mechanism for growth for me, for the business and for my practice. I have been mindful about the types of guests primarily interested in speaking with entrepreneurs, people who have been through the process good and bad and ugly and most of the time they are looking in the rearview mirror, which makes a lot of sense. People are more open to talking about it when it’s in the past. But recently I’ve challenged myself over the last year to bring in people who are open to looking forward and that’s been really great, because I’m not putting them on the spot to say, well, what are you going to do.

37:49
I ask them more generally about the legacy they want to leave. You know someone this one guest I had his name’s Bill Spohn, great guest, and he had told me privately we were talking and he said, yeah, I’ve told everybody that I’m retiring in three years. No, he has his own podcast so he’s also kind of put it out there on his show. But I said would you be open to coming on my show and talking about it? Because it’s almost like this taboo thing people don’t want to say what they’re thinking, for good reason, you know.

38:21
Sometimes it’s just you don’t want to do that, other times it’s okay For him. He decided it was okay and we had a great conversation about it. So I am starting to do more of that. We’re more looking forward and more about the legacy, of what’s important to you in building this business. What do you think about in your next phase, what’s interesting to you? And just having that has been, I think, eye-opening in a different way and I do believe people are learning from that as much as the rearview mirror conversations about growing and building and selling, yeah, okay.

38:56 – Mike Malatesta (Host)
Well, thanks for taking us through this, because I’ve similarly, I feel like I’ve evolved over time. I certainly do things differently and hopefully I ask questions a little bit better and hopefully I listen, but I’m really trying more than ever to connect with, especially when I do a solo episode, to connect with someone like we’re having this conversation, so I use the word you, you and I, whatever often, just like we were sitting, even though I’m talking to no one during those. I’m just talking to myself, but still, I kind of do that because I think that people like to hear that you’re speaking directly to them and I think that’s probably the best word in that situation to use to accomplish that goal. So, anyway, still a work in progress, for sure, and probably forever. So, speaking of succession and this is just a don’t want to COVID date stamp this either, but Charlie Munger died yesterday.

40:02
Charlie Munger, warren Buffett’s partner for, I think, 50 years. He’s 99 years old, just a month short of turning 100. He’s widely recognized and revered as not just a great investor but a fantastic partner. Some people would say he’s the real mastermind behind Berkshire Hathaway, while Warren Buffett is the face of the organization. Thoughts about Charlie, the succession that they’re going to have to go through and hopefully I’ve been planning on for a long time.

40:39 – Laurie Barkman (Guest)
Yeah, I mean, talk about legacy. Right to leave such an amazing legacy with him and his partners and everything that Berkshire Hathaway has created just the cult following. Even for people to get a share of a share of a share, just to go to their annual meeting, is incredible. And doing it in a place like Omaha where everyone just flies over it, right where they built this amazing empire of businesses. Yeah, I don’t have a lot of words to say about it. I just think the word legacy is the thing that comes to mind.

41:15 – Mike Malatesta (Host)
I’m thinking about doing a solo episode about the towel of Charlie Munger, which is a book with all of his sayings, mungerisms. Mungerisms, yes, and some of them are quite funny and some of them are quite prescient. The book, so you started the podcast in 2020 and COVID Is that around the same time that you did the book? I’m sorry, I don’t know exactly when the book was written.

41:40 – Laurie Barkman (Guest)
No, I wrote the book in 2023.

41:43 – Mike Malatesta (Host)
Oh gosh, the book is brand new.

41:45 – Laurie Barkman (Guest)
Yes, it’s brand new. Okay, came out this year, yeah.

41:48 – Mike Malatesta (Host)
All right. So you and I have such similar paths, so I not really, but I mean, I’m going to make them similar right now. You had this transition. You got into this, what you’re doing now. You started a podcast, you wrote a book, I sold up my first company, 2015. So around the same time, and then I started my podcast, 2018. I wrote a book in 2021. So we’re on similar paths, but I’m what I’m really curious about is why? Why did you write the book?

42:22 – Laurie Barkman (Guest)
I wrote the book because I had so much. I had so much information and knowledge in the podcast. I thought it would be a great tool to help people outside of that medium. You know, in a different medium and people learn in different ways. There’s lots of friends I have with my book club, especially where people only do the audiobook or other people have to have the printed book. And so here I am with this podcast and I create a transcript for every episode. There’s a lot, it’s big body of work.

42:53
This corpus right, this body of work is sitting on my website and it just kept gnawing at me that, oh, my goodness, like I could do something with this. It’ll take some effort, but maybe I could create a book. That’s the best of take the best of episodes and wow, boom, I have a book and I love the interviewer, howard Stern. You know people love him or hate him. I think he’s an amazing interviewer and he had done a book where he did just that, where he took the best of his favorite interviews and he put them with a little bit of an intro and those were the chapters for each of these interviews, and I thought, oh, my goodness, I can do that. So that’s what I set out to do and I hated it. It just didn’t work for me. I didn’t like it at all and I scrapped it. And then I said you know what? I’m gonna put myself in the shoes of the reader, the pants of the reader. What do they care about? What pain points are they having? At the end of the day, why would they buy this book? Why would they care? What am I solving for them? And when I did that, then, boom, the chapters came to me and each chapter is a pain point. So that’s how I, you know, set it up, like how to avoid these painful things. You know the subtitle let’s avoid succession pitfalls. Let’s avoid these pitfalls. So all these chapters are things you want to avoid. And, of course, you know, leading into what you want to do.

44:23
And then, surgically, I would think about episodes where I had these little golden nuggets and I would find them and then I would put them in the book in the right places. And that was really fun. So I ended up flipping the dynamic of what I thought. It was like almost this inverted pyramid flipped over where I had all this body of work, and it’s like, oh, my God, how am I gonna fit it into a book? And then, once I had my chapter flow, then I was like, oh, I need something in my book on family dynamics or I need something on M&A. Let me go to these episodes. And of course I’m leaving in my own stories and experiences and in other know-how. And then everything kind of came together and the feedback’s been fantastic. People have said that it’s like having me as their Sherpa. You know I’m talking to them, you know we’re going and the stories and the case studies, you know, bring it to life.

45:17 – Mike Malatesta (Host)
So really funny. I have a lot of people and you and Howard Stern have had this idea like I’ve got all these transcripts of all these great conversations that I’ve had with people, be easy to make a book out of that, and I’ve gone down the path of sort of getting going on it and then I find it’s a heck of a lot of work to make a good story out of a transcript of a podcast, even if the show is great. Just listening to everyone talk is so much different than what you need to have in a book for someone to continue to read it. So congratulations on your shift there. I think that was probably the right one. Your approach reminds me of you mentioned John Warlow or you mentioned Value Builder. I think that’s yeah. His books are similar to that where he picks you know, cherry picks stories out of his experience on his podcast or working with people he’s worked with. So it’s good.

46:16
I grew up on the East Coast, so I remember Howard Stern when he was the bad boy of terrestrial radio WNBC in New York City I believe he’s on several stations and he kept getting fired all the time. So serious streaming radio was like the best thing that was built, custom built for him and his expertise. So, yeah, now he’s seen as like the greatest interviewer in the world. Before he was seen 25 years ago he was or 30, he was seen as this incorrigible shock jock that had a great following, but he was certainly never somebody that you would say is going to be one of the best interviewers in the world. At least, I wasn’t saying that.

47:07 – Laurie Barkman (Guest)
Yeah, talk about a turnaround. No, he’s talked about that on his show. That he’s you know your question about you know being an interviewer and how things have evolved. I mean he’s a great example of kind of coming to terms with himself and his you know insecurities and why he did what he did and ultimately you know it’s made him not only a more entertaining interviewer but I think for him as a human, he’s enjoying this chapter of his life. As he describes it, one of the things you might appreciate when I think about myself as building the podcast. Have you ever heard of NPR’s StoryCorps?

47:50 – Mike Malatesta (Host)
Have you ever listened?

47:51 – Laurie Barkman (Guest)
to their StoryCorps stories.

47:54 – Mike Malatesta (Host)
I think I have heard of it, but I don’t know the last time I listened to it.

47:57 – Laurie Barkman (Guest)
StoryCorps is an effort from the Library of Congress and you can go into a soundproof booth and record with someone or yourself and every time I hear a StoryCorps I’m like, oh my God, I got to get the tissues. They are amazingly, incredibly wonderful, beautiful conversations and they’re recorded in Library of Congress. But NPR will take every you know, I don’t know what it is a couple of times a week. So when I think of my style, what I was trying to be for the show is Howard Stern meets StoryCorps, because I think the appreciation of the story and letting it unfold and enabling the guests to be their authentic selves and telling their story. And, yes, sometimes they get emotional, sometimes people cry on my show because it’s not just the superficial. I try to have meaningful conversations that help the audience and that was the. So not everybody gets it. You have to kind of understand Howard Stern to understand why I said what I said there. But yeah, Howard Stern meets StoryCorps.

49:06 – Mike Malatesta (Host)
Yeah, and I’m glad you told the story because it reminded me that I am familiar with StoryCorps. Because I was telling my good friend of mine, who’s just a brilliant thinker about stories like that, and I said you got to go on StoryCorps, you could produce stories for StoryCorps, because you’re just so good at pulling out Anyway, so thanks for that reminder. So the book where I mentioned, you know get it on Amazon, where books are sold. You also tell us about. You know how you offer it on your website and yeah, it’s available on Amazon.

49:41 – Laurie Barkman (Guest)
So, thank you, if people want to get the hard copy or soft copy, and also an e-book is available and it struck me that maybe not everybody has the 20 or $30, which I hope they do, but not everybody does, and that’s okay I want to make sure the book’s available to everyone in the medium, that it makes sense for them, and so if it makes sense for you to get it via PDF, just to kind of take a look at it and maybe eventually you’ll buy your printed copy, then that’s great. So I have it available on my website. Thebusinesstransitionhandbookcom is the specific book page and you can find it there. So you’re simply, you know, sign up for it. I also have an SMS option. If I can share that phone number, that’s another option for people to text in. Yeah, so you would just dial in for texting 762-320-2826 and the keyword is transition, and then you’ll get a link to the PDF.

50:37 – Mike Malatesta (Host)
Oh great, that’s easy.

50:39 – Laurie Barkman (Guest)
Yeah, it’s pretty simple.

50:40 – Mike Malatesta (Host)
Yeah, trying to make it easy.

50:41 – Laurie Barkman (Guest)
Yeah, and you know, for people that also are interested, I have a toolkit of all the exercises in the book and they can download that also, and it’s a great accompaniment to your learning, because it isn’t about reading it and putting it back on the shelf, it’s about doing something and having an intention.

51:02
Yeah, and think of me as walking with you on your journey as you read this book and I’m holding your hand. So, Mike, I’m creating a course because I think the book is just. It sets it up so well for a video course. So I’m working on that right now and, yeah, so I’m excited about that. We’ll be launching in early 2024.

51:24 – Mike Malatesta (Host)
Okay, great. Well, I’m sure it’s going to be a big hit because, like I said, you have a real I think you have a real skill for that. So, with the little time we have left, lori, we haven’t really talked specifically about how you help people, and I know you have these affiliations or an affiliation with is it Stony Hill advisors? I don’t know. I guess I want to understand how you actually work, who you work with, who should be knocking on your door, that kind of thing, Sure.

51:55 – Laurie Barkman (Guest)
Yes, I work with Stony Hill advisors as an M&A partner and we work with businesses that are 5 million to 50 million in revenue, generally speaking, in different industries and in different parts of the country. So Stony Hill has advisors in different states and for me I’m in Pennsylvania, but I work with clients in different states too and we do valuations, we do buy side services, we do sell side services and I really enjoy working with clients on that and the transactional side of our work. And then with my firm, I have a firm that’s called Small, big and my website is thebusinesstransitionshurebotcom. As you said, that’s my moniker and on that site what you’ll see from me in terms of my services is working with business owners on transition planning.

52:49
So this pre-M&A how do we get ready? The book is a great example of all the things that we would work on to increase value, to be mindful of growth what are those organic growth initiatives that we’re going to do? Or are we going to be acquisitive? And of course then I’ll put my M&A hat on and work with them on the buy side in transactions. So the way that I kind of explain it, if I had my green dot, is the pre-M&A and that’s the strategic transition planning and that’s a process that I work with clients about, let’s say, nine months, and we cover a lot of topics and it includes valuations, it includes contingency planning work, it includes my Rolodex and pulling in and other advisors as needed and different assessments to baseline where are we today? Personal readiness, business readiness and financial readiness and baseline again business value so that we can understand what their goals are. And if there’s a gap we need to close, well, how are we going to close it?

53:51
And that gets into again the innovation and growth and other initiatives. So I work with clients on a monthly basis as an advisor. If they’re on this growth trajectory and they want to be mindful of how to build business value as we do that, and then when they’re ready for more transactional M&A work, then that’s my affiliation with Stony Hill and being a certified M&A advisor and we’ll paper the relationship with Stony Hill.

54:21 – Mike Malatesta (Host)
Okay, so you are really working with clients that are at either stage where they’re in the preparation stage or they’re actually in the I want to transition stage, and you just handle them separately, like small dot big. I like that name small dot big.

54:44 – Laurie Barkman (Guest)
Correct. Yeah, I try to meet them where they are, exactly so. If I mean, for example, I have a client that’s 10 years out and we’ve worked on his exit plan and he wants to become an ESOP. He wants to sell the business to an ESOP and in the meantime he wants to grow through acquisition. So we’re punching a lot of dots on that list, from the exit planning, valuation, the buy side, the buy side deals that we’re doing, and then eventually advisory and helping him through the ESOP transaction. Another client was a husband wife and we did the strategic transition planning process with them together. Even though she’s not an owner, she’s a partner and I thought that was really great to be meeting with both of them and we’re working on a sell side process now. So a lot of my clients start with me in one way and then it evolves to something else, which is so great because I’ve become a trusted advisor and there’s a continuum of support that I’m able to offer them.

55:55 – Mike Malatesta (Host)
And when people come to you because this is, I mean, let’s face it, this business transition planning is neglected, I’d say, by most business owners, at least in a thoughtful, intentional way when people do come to you, it’s got to be a great sign, right? Because, one, they’re aware that they’ve got this gap. And then, beyond that, I guess, what are the one, two, three things that you see most often? That are you have a playbook to fix. You have, I mean, you know how to fix it and it adds, you know the most, clarity, value creation, purpose building, meet, whatever it is. If you could just walk us through a couple of your thoughts on that, so that people have an understanding of where you can take them to with your experience and your tools that they would struggle a long time to take themselves to, but they deserve to be there.

56:58 – Laurie Barkman (Guest)
Yeah, there’s a great example. One of my clients is a builder. He is absolutely a builder and his business is about $5 million in revenue today and he has aspirations for it to be $100 million business one day. So how are we going to get there? It’s not going to happen overnight and we meet every month and he is just soaking it in. He loves it, he’s.

57:22
You know, I give him part of my engagement is a subscription to the Value Builder platform, and there are modules in the platform that are designed for people who say you know what? I want to grow the value of my business. I want to work on the right things, are going to do so, and so there’s these building blocks that, even though he has an established business, I’m helping him see his business in a different way, and one of the key things that we’re working on is creating a recurring revenue model to his business that he doesn’t have right now and that could be a game changer. So the ROI is it’s like infinite, because I’m not free If my services are free, but at the same time, there’s a lot of value getting created in what we’re working on.

58:06
If we’re working on the number one thing, which is the owner’s metric, which is the enterprise value. And you and I know that most owners don’t know what their business is worth. They’re kind of walking around blind. So this is opening the eyes of this particular client to know what’s his business worth, what could it be worth? We have some tools that show quantitatively. If we work on these things, here’s what your business could be worth.

58:33
And that’s really exciting. So there are definitely clients that fall into this category of their building. They’re still building. He’s in his young 40s and nowhere near retirement. So that category of person is saying, yeah, I’m a builder and I want to create value and I want to work on the right things in my company and I want to protect value as I grow this asset. So that’s one type of client.

58:57
Another client is looking at their transition in a five to seven year time horizon. So it’s not imminent, but it’s coming. And they know that there’s some things that they should be doing and looking at. Whether it’s tax related, whether it’s team related, process, market, product service, whatever it is, we’ve got a runway to do so, but that window is going to close. And so that client is exciting to me because they’re mindful of the timeline and if they work backwards and we work backwards together, we’re looking at who might be the right buyer for your business, who might be that best fit for your business and why, and what do we need to do to make your business more attractive, less mitigate risk, less risky in some areas and transferable, and so transferability can merely be a hang up for some companies.

59:51
And then that third category is the ready now. The ready now is, I would say, from literally ready now to a year or two, if I hear somebody saying, oh, I want to sell in a year or two, that they’re technically ready now because they don’t have a lot of time to get ready. So let’s talk about the process. Let’s start working on the pre-M&A diligence that we need to do internally. What’s our data room? Let’s start to assemble that. Just finding stuff can just take so much time.

01:00:21
So they’re getting ready and getting organized. In the quote unquote ready now category is still. There’s pre-M&A work we need to do and, as an M&A advisor, we’re going to start building the marketing materials. We’ve got to make sure your financials are in order and consistent. There’s just a lot of things there. So those are the three buckets, mike.

01:00:43 – Mike Malatesta (Host)
Yeah, thank you for sharing that. And you said it near the very beginning of the podcast. And it’s too late to start planning when you’re ready to sell, and there’s nothing truer than that. And congratulations on getting these clients, these entrepreneurs and these business owners to come early and start realizing that they need some expert help to maximize the value of their business when they do want to sell and, even if they don’t, still makes sense to maximize the value of your business. But also, as you mentioned at the beginning and I’m a huge believer in this maximize getting ready and prepared to maximize their meaning and purpose after they sell their business. Because it’s such a trip up point, such a trip up point and I tell everybody like, hey, the people think, well, once I have all the money, I’ll be able to figure everything out, and that doesn’t work. It doesn’t work that way. In fact, money might just make it worse trying to figure things out. At least that’s been my experience.

01:01:49
So you’re just so smart what you’re doing. So, if you’re listening, you’re a business owner, you’re a spouse of a business owner, friend of a business owner, someone who’s got the best interest of a business owner that’s important in your life in mind. You should reach out to someone like Lori that the business transitions Sherpa. Talk to her and see if she can, you know, get you where you need to be Because, like you said, you know you spend the X on her, you’re going to get 100 X out of it. It’s just simple as that. So don’t wait, do it.

01:02:31 – Laurie Barkman (Guest)
Do it now. That’s good advice.

01:02:32 – Mike Malatesta (Host)
Yeah Well, lori, thank you so much for being on the show. It’s been great talking to you and learning about your journey. Thanks so much for sharing and by Lori’s book Business Transition Handbook on Amazon. Or you want the ebook, you can get it on our website, as she said, or text the number. What’s the number? The text on number again.

01:02:53 – Laurie Barkman (Guest)
It’s 762-320-2826.

01:02:59 – Mike Malatesta (Host)
2826.

01:03:01 – Laurie Barkman (Guest)
Keyword transition.

01:03:03 – Mike Malatesta (Host)
Transition. Well, there you go. Can’t be any easier than that. So thank you so much for listening to the show today. I really do appreciate you being here and I hope you found some value from it today and please maximize the greatness that’s inside of you today and every day. Thanks, and I’ll talk to you next time.

01:03:25
Hey everybody, thanks for listening to the show and before you go, I just have three requests for you. One if you like what I’m doing, please consider subscribing or following the podcast on whatever podcast platform you prefer. If you’re really into it, leave me a review, write something nice about me, give me five stars or whatever you feel is most appropriate. Number two I’ve got a book. It’s called Owner Shift how Getting Selfish Got Me Unstuck. It’s an Amazon bestseller and I’d love for you to read it or listen to it on Audible or wherever else Barnes, noble, amazon you can get it everywhere If you’re looking for inspiration that will help you unlock your greatness and potential, order or download it today so that you can have your very own copy, and if you get it, please let me know what you think.

01:04:09
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