Why Would You Want to Own a Business?

[Music] hello everyone welcome to the 21 hats podcast I'm your host Lauren Feldman this week Sean busy Jay goz and Jennifer Karen respond to a somewhat depressing view of business ownership offered by an investor who buys businesses for a living that view essentially is that for most owners building a business is a daily Knife Fight of long hours unexpected risks slow growth and meager returns in this episode I read most of the investors observations to Shawn Jay and Jennifer and get their reactions which Hit Upon a bunch of issues that are not widely understood including how fast growth can destroy a business how even a profitable company can go bust and why a good metric to assess the health of a small business just might be how many people have been crying in the bathroom this year while Shan J and Jennifer disagree vehemently with a few of the investor assertions kiss my ass says Jay in response to one they do acknowledge that he makes a lot of good points which leads to an obvious question why would anyone do this why would anyone subject themselves to this kind of life as you might expect Sean Jennifer and Jay have a response to that as well even in Good Times owning and running a business can be a lonely Pursuit our hope is that these weekly conversations brought to you by our principal sponsor the great game of business will let owners know they are not alone in facing challenges same thing with our daily newsletter the 21 hats Morning Report which Jak mag magazine named the best newsletter for business owners and which you can subscribe to for free at 21h hats.com where you can also find transcripts of our podcast episodes and lots of other articles and interviews joining me this week on the podcast our regulars Sean busy CEO of Kinesis which is based in Portland Oregon and works with small businesses on marketing culture and strategy J gos CEO of the gos group whose companies in Chicago include a picture frame business artist frame service and home furnishing store Jason home and Jennifer Karen who is CEO of SB Expos and events and events management business based near Baltimore the episode is titled why would you want to own a business welcome Sean Jay and Jennifer it's great to have you here I think we're going to have some fun today I recently quoted in the morning report from a post written by Brent bore Brent's a very smart guy who buys businesses for a living technically he has a a private Equity Firm but it's a different kind of PE firm he buys companies with no intention of flipping them or ating the founder that's why he calls his company permanent Equity he also introduced a big event last year called the main street summit which was really interesting for a lot of reasons maybe we'll get to in his post Brent wrote I've had the privilege of peeking behind the kuron at 10,000 plus businesses some observations and then he listed 12 or 13 I want to go through some of these observations and and get your reactions uh I can tell you they they paint a pretty bleak picture of Life at a small business and I'm wondering if it made sense to you guys the first one was all businesses are Loosely functioning disasters Sean you responded to the LinkedIn post that Brent wrote with a little bit of a pushback I would say want to take that one on first yeah I mean I I read his I read his list and and I was thought about it a bit and I was like wow this doesn't sound like any of my clients and and I realized like it really depends on who you're looking at if you think about the small business landscape 90% of small businesses are under a million dollars so you're talking a lot of organizations that don't have a lot of structure a lot of solopreneurs a lot of really really small organizations so I think yeah if I reflect back to my business in its early days if you were to look at it then when it was under a million dollars it probably would a disaster in a lot of ways but it's not today well let me say this though most of the companies that Brent looks at are probably not under a million dollars he looks at bigger companies yeah I mean I've definitely seen some larger companies that are a disaster but I I don't know I it just seemed it seemed pretty cynical to me um it it just hasn't been my experience it reminds me of what people saying about marriage too you know 50% of marriages and in divorce why get married well that 50% is also people who are on their second third fourth marriages and I feel like right that doesn't mean if there's one failure that if you Peak under or inside the house of someone's married at any given snapshot of a day that marriage might like look a disaster but overall it's functioning it's strong it's the marathon not the Sprint and I don't think that's fair right and I I also thought about like who's coming to Brent like who's giving Brent their financials so this is somebody who probably wants to sell a business I have seen in many cases that the people who are really eager to sell their business even urgent to sell a business they're often the ones that are not doing really well if you're running a really healthy business you're often in no hurry to sell it well unless you've gotten old which is the case in most of the people he's probably dealing with at some point you but but Lauren read the first few words all businesses what was the word he used all businesses are Loosely functioning disaster all we need anyone who this is my line everyone who speaks in absolutes is always wrong what a ridiculous comment for God's sakes all businesses really there's no businesses out there that AR I mean talk about hyperbole yes it is hyperbole I'm going to stop you there people talk that way you happen to be very precise with the language that you use and that's a good thing he says at the end it's really not all businesses so let's let's focus on the the substance and not the fact that he got I got it let's just say many business okay fair enough many is probably true sure yeah and I also think you know businesses are made up of people and people can be complicated ated they it can be human life can be messy if you look at any given business at the moment could it be a little messy I I think loosing functioning disaster is I think Sean you said this right is is a cynical view of it if you look at it from an outside could it look messy could it look not super functional but we're people and we're not robots we're not AI it's not going to be my argument is if they were that big of a disaster they wouldn't be in business so they couldn't be that better they wouldn't be in business so is there something to what he's saying absolutely I fully understand his point because until I join business groups I thought I was the only one that had problems and you know it is eye opening you think you're the only one that has problems with management you think you're the only ones that have problems with cash yes it's so his point is I got it it's just taken to I would agree with Sean cynical for sure it yeah it's like asking a divorce attorney it's like about marriage if you ask a divorce attorney about getting married there will give you a certain point of view and so I think that's the point that is important to consider I know Brent a little bit he's not a cynical person I think it's a matter of choosing the right word yeah sure no no there there's truth spoiler alert there's not one of these that there isn't some serious truth to I just I do take exception and I do react to the hyperboy that's built in that I don't think was necessary I think it would have been just as effective to say many businesses you know but yeah there's something to what he's saying for sure well you know actually I think Jennifer's got a really good point here there are points in the trajectory of my business where if you looked at it and you looked at the p&l you'd be like wow sea has got his together this business is so well run he's making good margins awesome growth etc etc but if you were to talk to me I would be like this is freaking hard I am miserable right I'd have people in my office crying people super sad you know just lots of things that don't show up on the p&l and then at other times you look at the business you be like wow Kinesis isn't doing so great I don't know I wouldn't buy that business and you talk to me i' be like you know what I'm really happy this is a great place you know the people care for me things are going well I mean that might be even a little bit of Jay's Arc right you know Jay you've talked about like super fast growth but yet how how unhappy you were or in your earlier earlier days or I don't want say just stress for terrible stress terrible stress yeah right so it's like I think Jennifer makes such a good point here because there's such a subjective perspective and and you know if you look at the p&l it's just through one lens you're seeing it and I think this is the Trap businesses fall into when they go through a merger or an acquisition or they buy a business is they're looking at it through a one dimension and I see this all the time oh this is going to be so great they buy a business they shove these two businesses together and it's a disaster and and that's because they're not seeing it in its full picture and you brought up a good point maybe one of the things that's not in a financial statements how many people have been crying in the bathroom this year you know that would be a good metric to keep track of because you know basically what I'm saying is we're all 100% right yeah and he's got a lot of hyperbole but there isn't one of these things that there isn't a point to that's true all right let's try another one go ahead small businesses don't stay small on purpose agreed got no problem with that one is that true yeah I don't think people consciously say oh I don't want to get big I think they're held back because they they're held back because if you have a restaurant you well that's true it depends on what kind of business you're in and what your goals are I mean we you know Lauren we had that interview with Cameron um you know a few weeks ago about talking about his Co-op you know switching his business to a co-op I think he was very clear on his choice of growth you know of of basically being a I mean his trory is going to maintain him as a small business for the next you know 50 years so I think he's made a choice you know for a certain level of stability I know a lot of owners who are like yeah I like it because I'm making a lot of money you know so they've made that choice but I think there are a lot of folks where their business is out of their control I largely agree again I think if you put most on all these it would make them better but this one's this one's pretty true I think that most small businesses would like to get bigger but can't what about about you Jennifer what do you think I I'm not sure about this one I sometimes they might want to stay small but they can't because of the forces around them competitive pressure you have to grow or you you'll wither and die or you get an incredible offer if you have you know these small tech companies they might want to form a certain Niche and then they get this ridiculous offer it's hard to say no to transformational wealth so to me I took that as a negative maybe some people would like to they just can't for the the purposes around them the competitive market so I don't know about this one next I know people who are solopreneurs and have chosen to to stay that way they don't want to hire employees they're happy with what they're doing I I think there are certainly exceptions to that one but again his I think his larger point is right next most companies don't make much money I think that's totally false oh I see I have to tell you I think that one could largely be true let's get clear here we're talking net income are we talking make money meaning money you get to keep versus Revenue yeah that's the way I would read it how many businesses make half a million dollars year net not many 300,000 a year if the the statistic right is most businesses are under a million dollars in Revenue most small businesses are under a million dollars 91% something like that so if they're making 10% net income they're only making $100,000 that's pre-tax so after tax what they're taking home 60,000 all right that's a good point I was thinking more of you don't stay in business if you can't figure out the money but I didn't think about how many small businesses are under a million you're right no Sean's 100% right because I looked into this most businesses are very small I mean that's a fact um that's a fact I me doing the ESOP stuff I looked into that and clearly 99% of businesses are too small to even consider an ESOP so that one I think is statistically just true and Jay I wonder if that is to Lauren's discussion of Consultants there businesses and almost name only because it's really just a consultancy and they have no intention of growing it past being a consultant so they have no intention of having employees and they can only take as much work as they can personally handle to me I know legally their businesses but I don't think of them in the same I think of as consultant is very different than a business well that clearly is part of the 99% I mean whether it's 10% or 20 but a lot of them are hair salons you know there's plenty of service business of landscapers there just you can make a long list of small businesses and that isn't an opinion that's a fact that that 99% are small so that one's that one's pretty true what money they do make is almost always reinvested back into the business probably true yeah sure that's fairly true yeah yeah I think that's true and I think that's the thing a lot of employees don't understand if you especially if you don't do open book management um you know hat tip your sponsor Lauren um I think the perception is often oh you own a business you're making big money yes yes employees and the general public don't just don't understand how much you're reinvesting back here's an interesting point I've spoke to several NBA classes it it big I'm talking a you know big Northwestern okay these are the smart kids quote unquote no one's ever gotten my riddle right it's kind of surprising to me I show them if you're growing at x% and you made x amount of money and you need x amount of money to fund the business how much is left none of these smart kids has ever said well you got to pay taxes on that money even though you didn't take it out that's the reality and I've suffered from that terribly over the years when you make money even if you don't take it out you got to pay the taxes on that money which makes this is what causes more cash flow problems so you're paying the taxes right but you don't actually have the money because you put it in inventory so I would say that one's that one's pretty true or you just put on Jay I don't have inventory you just put it in your bank account for a shitty day and you still have to pay taxes on it or or receivables or hiring new PE there's lots of things you put money into that are not a tax deduction that you end up paying the taxes and you yeah so that's I think that one's largely true I also think that unfortunately a few very very large businesses run by billionaires have done a disservice to the incredible work that small businesses do for this country and so a lot of people people have this view that we're all like Dr Evil right like we're all this billionaire with this yacht Spaceship Spaceship we're just trying to squeeze yes squeeze every penny out of it instead of reinvesting yeah into companies and I think that's an issue uh for capitalism in this country is that small businesses really help Define communities they're the ones who are giving back to the local baseball group or the girls soccer group right they're the ones doing it not these giant billionaire type compan and I think it's a shame that they set the the mood every six months or so Jay tells us he doesn't want to be known as a CEO anymore I think for specifically that reason yeah it's true CEO's got a bad you know it's got a bad connotation and in in my case I'm a little company I just heard me last year I paid literally millions of dollars in taxes between the real estate taxes sales tax payroll taxes I pay millions of dollars in taxes that even if I don't make money that's the key even if I don't make a dollar still got to pay the real estate taxes still got to pay the sales tax still paying the payroll tax so it's the small businesses of America that are funding cities there's no question yeah and I think I think you both make a really good point that I didn't understand back when I was all about demonizing the business world you know I was like this idealistic artist I was like I will never be in business right and what a lot of folks don't understand is that until you become super rich you are going to pay actually a maximum tax bill you're going to pay crazy amounts of taxes and when I mean Super Rich I'm talking hundreds of millions of dollars then you can afford to do all these crazy schemes that allow you to pay like no taxes and this is why I think to Jennifer's point we have this class of quote unquote business owner who the country kind of hates rightly so because they are not contributing to our society and then at the same time you've got this chunk of folks who make between you know Revenue let's say revenues of $500,000 to a hundred million who are paying huge sums in taxes like huge sums and there's just no way around it you cannot like there's no like game to get out of paying those taxes which is fine but I just I think there's a disconnect because we get lumped in with that class of business owner who none of us really care for well said Sean you said it much better than I did so what you're saying is I'll say you guys are all good guys uh that's what I was looking for La what I was looking for thank you we're like good yeah I don't I mean I'm not I don't want to say good guys and bad guys no I don't want to say that okay how about we're not the bad guys can we live with we're not the bad guys we're cont we're contributing we're contributing we're contributing and I don't think that's well OD here's one that I found really interesting most owners unknowingly tolerate a tremendous amount of risk true absolutely absolutely true yeah 100% well tell me about the unknowingly part what did you not realize L's like well more uh employe lawsuits uh someone slipped in came into your business slipped some company sues you because your website isn't um ADA Compliant I'm not going to say it's endless but there's a long list of exposures that you have when you're in business which is why when I talk to people that own picture frame shops and I say to them if you're making 30 some thousand a year running your store I have to ask you are you sure you wouldn't be better off having a job somewhere making the same money because whether you know it or not you're taking a lot of risk owning a store and they don't think about it a lot of them and owning any business you absolutely are exposed to risk and I think people don't always understand too that when you're a small business and you want to get a loan to help like even out cash flow that bank is going to require personal collateral right that my house has been on you know bank loan to statements that the the bank can come take my house and that never happens to an employee um and it's it's hard the understanding the cash flow is a critical component of being a small business one and and it's overlooked a lot it's certainly not talked about enough in any business class if at all if at all right Jay and then understanding to help your cash flow you might have to put up your house or or your firstborn child to the bank that's that's aous amount of risk right no they don't even want your firstborn child they want the house I a number of years back I got this threatening letter from this very large company informing me that uh one of our clients had been using their phot photograph uh without paying for it there's one so what had happened right I had an employee who was a shitty employee uh he had taken this photo put it in as a kind of a mockup for the website we're talking 15 years ago so puts it in the website shows it to the client client's like great let's go and what should have happened then is the uh client should have been bill for that photo or told hey if we want to buy this photo this would have cost that didn't happen it gets put on the website it's in the public domain I spent months and months and months at Great expense fighting this company and essentially I basically just had to write a huge check it's just one tiny example I would tell you it surprises me they wouldn't let you just take it down and they left I'm surprised it wasn't just a season assist order well they they had built a whole department a whole litigious Department basically around extorting small businesses for doing this because a lot of business owners would do it and not know what was going on for me this was just honestly this was malpractice on our part and so we had to cover our client you know of course um but like a lot of small business owners don't know about copyright law and they take advantage of that and so there's a whole predatory industry out there so the answer is yes there's risk in business that most of us couldn't even if if any of us I could make a list of every single possible risk there are risks that we're not aware of 100% right on that one people are taking aspirin now listening to this most owners work long stressful odd hours is that true Jennifer that is very very very true and you know what it is is you don't know what you don't know and business is not easily taught on the small business side what they teach in college I think or graduate school is big business no question yep so you spend an exorb amount of time just learning what to do I think I understand now why once you've understood the magic of how to run a business why people run multiple businesses and I think because they they figured it out and it's it's very hard to go through that process of figuring it out you're talking to that person that's exactly what happened to me I spent 20 years getting ground down and stressed and I finally 20 years I finally figured it out and that's when I started to start my other businesses and it's absolutely true cuz I'm confident not Tech but I could walk in to many different businesses and run them because it's largely the same you know I you both bring up such great points here and I was thinking about our conversation earlier about taxes you know what they teach you in business school is this really ill serving concept which is iida right so think about this right in business school they're telling you what matters is the money you make before taxes and interest payments wait and depreciation and but you cannot get out of paying those things this is the nonsense of how business school operates that doesn't work in the small business world just so you know Warren Buffett 100% agrees with that he says he he's and I like when I can agree with Warren Buffett he says ebaa he fully agrees with that for a running business it doesn't mean anything buying a business that's another story because the depreciation isn't a real cash item so when you buy a business eida does have a purpose because some value because the depreciation isn't a real cost so you don't have to pay for it what about interest I mean interest is a real cost well if a company buys you though and has the cash they don't have any interest expense so that's also one that like I said if you sell a business or buy a business that certainly has value but if you're just running your business day today you could absolutely con yourself into believing you're doing well when maybe you had to buy a $200,000 printing press and that no longer shows up on your income statement because that was depreciation so it is nonsense for running your business I also think though with your title of 21 hats right that's the whole concept of a small business owner they wear 21 hats because they have to do 21 different separate type of activities business school I think trains you to do one so you follow the finance model and you learn how to do the finance of a big company or you follow the track for marketing and you learn how to or you follow sales or you follow HR or you follow all of those yeah you can't do one thing and you can't do anything so badly that it topples your company so you have to be a generalist in 21 or more different things and business school I think is training people to be Specialists think if I use the medical school example right that the DAR of family physicians versus Specialists and and that's us we are the family physician and we're taking care of babies and you know older people we are doing everything and we have to be good enough to move to the next level on everything that is an indictment of Business Schools which they deserve the fact is the 21 hats that we're talking about they could teach that in school they absolutely could and they could do it in a way that's not driven by the concept of a tech entrepreneur if you're a small business person in the tech World who's hoping to get purchased in 3 to five years that's a very different it's a very different world than than the rest of us right I mean that's you're you're absolutely right Jennifer 100% and that's why I jokingly say go to Stanford that whole program is I mean maybe I'm being a little cynical but it's designed about getting Tech entrepreneurs to be rich but they're not teaching you how to run a profitable small business they're teaching you how to go get investors no they invented the term burn rates that's where I they invented the term when you're in business it's like what oh I'm supposed to be burning through money where's that money right it's other people's money OPM right yeah all right next okay I'm going to try to go quickly through these because we got some good ones coming up uh neither number of employees nor revenue is a good proxy for the success of a business Don absolutely age I agree with thate 100% 100% that's a greate yes which is a real problem for journalists I would point out because sometimes it's hard to even get those numbers out of businesses and it's very hard to write about a privately owned company where you can't go to Yahoo finance and look up uh everything you could possibly want about the business it's very challenging well all the awards the awards are for things that are associated with that right Awards how many employees do you have Awards around how much revenue you've grown you know and Publications do that because that's the only information they're they can possibly hope to get nobody's going to give them you know their their true profit numbers yeah joining a business group is a great way to understand that because when you are in some other business group you will learn all all the different businesses and how they defined a success and you'll compare it to yours and you're like wait they have a lot less employees or wait they have a lot more Revenue it's freeing up your mind when you see other small businesses so join a business group yeah absolutely okay next fast growth is counterintuitively more perilous than declining revenue and can quickly destroy a company ridiculous ridiculous ridiculous that could be true but lots of times declining revenue is a problem could fast growth put you out of business there's some truth to that but but just some but you can stop fast growth you can stop it it's harder to stop declining Revenue so you have more control over fast growth yeah you raise your prices and and you just don't take the business right like you have more control over it than the than the other one but as I said before there's some truth to that I think it would have been more interesting if he had said fast growth can be more perilous than slow growth yes yes which is every single one of these could be fixed with one word most can some that's all one word would fixed every one of these well I think the point he's trying to make is that fast growth can catch you unexpectedly it can it can Crush you because nobody talks about the impacts of it like it's it's celebrated right again to the awards it's celebrated but nobody talks about the cash flow consequence of fast growth that's this not discussed or just this personal stress or the personal stress or you know all the other stuff so I I he makes a good point I think it's I I remember seeing a finance guy like map out how to go bankrupt by growing fast and I was like whoa that's crazy I I didn't even I had no understanding again this is 15 years ago but I think most business owners don't understand that either they don't teach cash flow that's not a thing the other problem these days is people could talk about cash flow they use it to oh I've got bad cash flow no you're not profitable that's not the same thing the truest sense of you have a cash flow problem is you're profitable but the money is getting tied up in receivables inventory if you're losing money you have a profit problem and a cash flow problem so they use that now it's almost less embarrassing to say I have a cash flow problem that's saying I'm losing money but they throw it all into the same bucket and it's really not the same thing next culture is nothing more than what you reward and punish not what you put in your Mission Vision Values statement completely ridiculous I don't even know what he's talk I'll tell you what he's talking about I don't know this one I'm not so sure about Jay well let me pay off let me give you my opinion on this when you say culture he suggest he says in there basically it's all about what you punish and reward that's your corporate culture that's just absurd your corporate culture is how far do you go for customers how do you treat each other what are the values of your company how many hours are I think you're saying the same thing Jay he's just saying rewarding and punishing I think he says it in a in a a way to spark drama but I think the concept is accountability so if you have written words in your mission and vision and value statements but you don't hold employees accountable to that or yourself yes yes well let's talk about there's something to what he this one's the furthest one this can't be fixed with one word unfortunately but yes I understand his meaning of stop with the corporate culture and the vision statements but I just I have a problem with the punish and reward part I think it's accountability that's where he's going with it I don't think he's saying stop with them I think he's saying they don't mean anything unless you act upon them and it's what you say and what you do that matters okay well to Jennifer's Point replace punish and reward with accountable no problem done so it took two words to fix that one he's he's addressing the motivational poster I mean that's really what he's talking he's talking about the break room which I made a lot of money framing I have to add 25 years ago accessories with Chicago Company 30 years ago I framed hundreds of thousands of dollars of those motivational posters oh my gosh did you roll your eyes every time or you just like this is great I'll make some money on this no it was a good run it was a good yeah it was a good run while it lasted that didn't last either these days Tik Tock is littered with young adults of where companies are not using their mission vision and value statements to deal with employees I mean employees young employees will go to Tik Tok so quick to call out companies on the disparity between what they say and what they do and I I think I don't like the way he said it but I think in essence it's true there's something to no question there we all can interpret we got his point it just that one wasn't that articulate I I but but there's certainly the point of you can't just say we got a good corporate culture at the end of the day it's are you taking care of customers making money holding people accountable Jay I think you need to frame that one and see if it sells yeah that's what I'll do I'll run it up the flag pole see if anyone salutes okay next most employees couldn't tell you why they do what they do or how it contributes to the success of the business this is total horeshit I'm sorry this is I mean I don't know who he's talking to but like that is just I can we call that one cynical do some have a narrow perspective sure do do do new and entry employees have very little clue for sure do some roles have less Vantage than others yes but like Mo I mean come on yeah like not knowing what they do I mean ah this one drove me crazy hearing that really I mean is that true for Corporate America 100% is that true within the small business ecosystem I don't think so this reminds me does anybody do you remember the TPS reports from that movie right that's what this reminds me of that's an office space comment yes for sure yeah so Sean it's the corporate environment where somebody's doing a TPS reports and has seven supervisors I don't think it's applicable to small businesses but I misspoke for I said they all have this one no I don't think has any this one I would reject the rest of them so far okay there was something this one I don't think there's anything here reread it Lauren re please reread it because there's two parts to it like he's he's making two really extreme claims this most employees couldn't tell you why they do what they do or how it contributes to the success of the business and let me just say I me Sean I think that what he's addressing here is the reason you decided to open your books is so that your employees have a better understanding of what drives the success of the business right I don't think this is that far off that's the I mean that's the latter part of that question but the most employees don't know why they do what they do I think he's saying the same it's he's not saying that they're all walking around in circles and confused about you know what their role is that they don't have the broader picture and don't understand what their activities do actually contribute to the success of the business okay now you're putting words in his mouth putting broader picture okay there's some truth to that but that's not what he said all right you know what I'm going to do a poll of my employees I've decided I'm going to go ask them if they if they can do it hopefully that this Brent is not right hopefully my employees I mean okay look okay to our earlier discussion who is Brent talking to right people who want to sell their business and I think Jay brought up a good point a lot of people who want to sell their business are old people so we're talking about baby boomers who ran their businesses in a very different way than the current generation with Jay being an exception command and control for sure but so this is again this is selection bias right it's like that is not my experience with the clients I work with that is not my experience even within like when I was an EO that was not my experience with more contemporary businesses and business owners I would say of all of this one so far this one's the one that all three of us think is the least in my case I don't think there's anything to it but this one the rest of them there was something to this one not so much let's get a new Fresh one next the most dangerous time for a business is when the owner first experiences some financial success or significant notoriety few survive it oh for God's sake kiss my ass that's what I want to say to that one really oh they all just go crazy and they go out and start going on the lectures give me a break I mean that's just ridiculous I mean I could pick like three or four things that are more dangerous than that for sure like partner conflict yeah most dangerous time is when you have one client who's responsible for more than 30% of your revenue and they go away uh me got a big credit line and used it all yeah I mean I could just think of a lot more dangerous things I mean I won I won this like very prestigious growth award for five years in a row and that was pretty good I me like it was not dangerous it was pretty good I was growing I was making good Revenue when I read this I was thinking Sean to what you said I feel like sometimes the most dangerous time is like the first year and a half of a business but then the second part I would say is when a successful family business transitions Generations oh yes certainly for sure no ABS absolutely my point is I was on the front cover of Inc magazine I was featured in small Giants I've won awards like like really it goes to your head and you just become a Coke addict or something I mean what what a ridiculous what a ridiculous that one's just completely ridiculous Jay we're gonna have an intervention and we wanted to talk to you about your Coke problem on this episode and I was surprised he didn't talk about family businesses in any of these he didn't say that that to me that transition cuz I've seen it in some of my vistage groups Jay you've talked about that struggle absolutely is that there's a lot of family businesses out there in the US where where people are retiring and their children want to take it over and that's a critical time period of that and I'm I'm surprised he didn't talk about that at all well keep it no this is why those companies are going to him instead of transitioning to the family so he probably doesn't have any of them because why would they be talking to him yeah cuz they're going to sell y right or their kids are taken over they have no interest they have no reason to talk to him so I can understand that one is there some true to it could cause a problem sure but to suggest what was the last words F survive is that how it finished F survive it that's how is that what it said yes yep okay that's just that's preposterous I will say this there there is a point here in that I I did an analysis once of this fastest growing award um thing which I was talking about earlier and I did notice a trend where a lot of folks who are on that list were also on another list like two or three years later which was the business's closing list there's I don't think there's any aru I think they would admit that if you cornered them I I've heard 50% of those businesses are out of business and I I think that's believable yeah there's there's some truth there last one occasionally we see a business that breaks most of the above and it blows my mind how profitable it is how happy their employees and customers are and how well they serve their Community okay once again one word take out the word occasionally how about just saying sometimes we see like seriously it's just occasionally like one out of 50 companies are successful and hey give me a break occasionally seriously that's just ridiculous well statistically he's probably right you know like I said it's you know it's a huge market place and there's a lot of dysfunction in it we just don't again you know 91% don't get above a million right so I know but that doesn't mean they're not making six figure incomes and happy true true true true so I would like to finish with if you read this you'd think why would anyone want to be in business fors after reading this list and the answer is because being in business for yourself is a joyous rewarding luxury gift that you can make customers happy you can make a nice living for yourself or family you can provide career paths for your employees give them confidence give them security give them meaning owning a business is a lovely beautiful thing that's why well said Jay I agree I mean I I get incredible Joy from doing what we do for our customers I love my customer base I've kept it very Niche I love it I absolutely adore it when I've been able to train up um younger employees and see over the past 10 years then become leaders and and successful and and one of them who just bought a house because she's had this fantastic job right to do it that that inspires me personally and and and I think Jay that there are difficulties and stress but there's incredible personal satisfaction that we can give back to to our employees our customers in our community you brought up exactly what I was going to say I've I've helped 10 people buy houses over the last 40 years 10 people have bought houses raised families there's no greater satisfaction in the world so I would say my number one would have been business is like nature it goes everywhere from beautiful sunsets and lovely warm summer days to hurricanes that's business is but it's both if you read his list it sounds like it's a constant hurricane and that's simply not the case if it was you'd be out of business at some point unfortunately we are out of time but I want to thank all three of you you guys did exactly what I knew you would which is to talk realistically about what it takes to build a business so my thanks to Shan busy Jay goz Jennifer Karen and to our sponsor the great game of business which helps businesses use an open book management system to build healthier companies you can learn more at great game .c thanks everybody wait wait don't leave yet if you have a question or a comment that you'd like the 21 hats owners to address send it to me by replying to your Morning Report or by email at Lauren at21 hats.com that's l r n at21 hats.com do it now before you forget and don't be afraid to tell Jay what you really think you can take it and if you got something out of this conversation help us reach more business owners tell a friend subscribe and review us wherever you get your podcasts follow us on Twitter subscribe to the morning report at 21 hats.com this episode was produced by Jess thubron founder of blank word Productions okay now you can leave thanks for listening everyone [Music]