Welcome to Elevate with Elsner. Join us for inspiring conversations with individuals who have transformed their lives and are making a difference through the work that they do. And now, Welcome back to another episode of Elevate with Ellsner, where we talk real strategy, real growth, and real people making real moves. Today, we're diving into the world of business exits, but not just exits, intentional, profitable exits. I'm sitting down with a powerhouse entrepreneur who runs the O'Fallon Exit Factor franchise, a business that's helping small and mid-sized business owners do what most never even think about. and that's build a company that someone actually wants to buy. This episode isn't just for business owners though. It's for people looking to exit in their legacy. It's for anyone who wants to build a legacy that lasts long after the hustle. So without further introduction, Michael Schieffer, what's So tell us what, tell us a little bit about, um, you know, exit factor and the, the background that brought you into exit factor, because I'm sure, you know, when you entered the world that, that probably wasn't on your mind, right? No Not at all. Um, no, I got, I got about a four hour story. Um, but I'll, I'll condense it as much as possible. So exit factor, the gist of it is, is that we help business owners get to a position with their business where they can comfortably exit. So that's the easy explanation there. Exit can mean a lot of different things. It can be sell your business, step out of the owner operator role. exit a key role like a sales job or an operations job inside your business and just get to a state where you can just simply own or lightly manage your business. That's what exit factor does. How I came upon this is, I've been in the lending world. I was a commercial lender for 10 years with two different banks. And I've always had this entrepreneur spirit where I wanted to be on my own. I didn't enjoy working under the rules or the shroud of someone above me. So that's what got me kind of like into real estate. I flip houses, I do rentals. So that's fun. But I truly wanted to own my own business. So I was always thinking of ways I could enter this world. Several years ago, I came up with this idea. I was going to be a consultant, and my tagline was going to be making businesses bankable. Since I was a lender, I was going to make them bankable. I thought of this great plan. I was going to coach people, consult them, clean up their finances so that they could walk into a loan and easily construe to a loan officer that they made the money that their documents show. I didn't have the balls to do that, so it didn't happen. Then I got to nosing around on BizBuySell. I came upon a business, Assignarama, which is a franchise that makes signs. I got pretty deep into that, thought I was going to own Assignarama, turns out I didn't. Somewhere along the line, I decided not to do that. That same franchise group called me like 10 months later and said, hey, we kept your file. We see your past, that you've been a commercial lender, you have this business expertise that you have, and they started describing Exit Factor to me. Word for word, the salesman was saying what my business plan was going to be for my making businesses bankable business. Making businesses bankable, making businesses sellable, pretty much one and the same. It goes into a lot of cleaning up financials, processes, procedures. It was basically the same except for it came with this framework of a franchise where they helped me set up website, marketing, social media, it gave me all the tools that I needed to start my own business. So instead of just Michael Schieffer out in the world on his own trying to be a consultant, it was Michael Schieffer who now has this awesome franchise, this brand exit factor behind me. So that's how I got to where I am now. And it's incredible. I love the platform and what we're able to Yeah, I guess you're right, because you had the idea, you just needed some type of a Absolutely. I wish I didn't need, you know, you're familiar with Mike Kitko. So he's a guy that has helped me over the years with my mental state and to get me to where I am now. I wish I didn't need all that. But the reality of it is, is that I'm just human and I needed some sort of push to get me And yeah, shout out to good old Mike Kitko, because yeah, he's he's been an impact in my life as well. And it is true. Like, you know, just having. that, you know, push or that foundation behind you to just catapult that idea to like life, right? Or to actually transform it into reality. That's, it's interesting how, you know, you, you almost like wonder like, wait, did they take my business from me? How did they think of this? Well, I guess, cause you have other brilliant minds that somebody has that mindset to build the foundation while you're the guy that takes it Absolutely. Yeah. That. how Exit Fact of the Brand was formed is a lady in Denver, Jessica Fialkowicz, she was a business broker. So there's this statistic out there that 83 percent of businesses that go to a business broker don't sell. They never sell. So she had this idea like, what are we doing with these other 83 percent of businesses that we're not selling? So she created this consulting firm, Exit Factor. And then, um, it picked up steam so much to the point to where she decided to That's interesting. Would you say that, like, because that's a very high statistic. I'm guessing part of that has to do with, because it's just not organized when people go to buy a business, it almost be like going to buy a house or a car and like having three tires on there. And you're wondering where the fourth tire is And that makes sense. So that's why what only 17% of businesses sell. That's, that is a low amount. I'm guessing it's 17% are Yeah. And, um, there's a lot of things that go into it. One is simply knowing your value. So that, that might be. The number one, I don't know the ranking, but that might be one of the biggest factors, simply knowing your value. I mean, you run into it in real estate. People think they can get 400,000 for their house when all the comps suggest you're going to get 325. It's very similar. So sometimes a business broker might have urged them to go lower and they wanted higher. And so then it wouldn't sell because of that. But a lot of the other reasons are financials that don't support it, people not wanting to buy a business where the key player is the previous owner. I don't want to buy a plumbing business if I have to be a plumber tomorrow. I want to buy a plumbing business so I can manage a plumbing business or own it. Or, you know, a lot of them get to, to where they're almost sold and there's deal killers involved. Like maybe one partner was willing to sell at X price and the other partners not, or there's a lot of legalities along the lines that should have been a thought about a long time ago. So that's, that's why it's such a low number that there's, there's so many hurdles to get That's it. Yeah. That is interesting. I, I didn't ever really thought about when you price a business, obviously it's, it's negotiable. Right. And you got to figure out, Hey, how much is your business? We're in, there's no comps. Right. How do you compare like, Hey, if you're going to sell restaurant a and you know, how do you compare it to restaurant B and be like, this is the valuation. Yeah. Um, so part, one of the, uh, One of the packages I sell is simply a business evaluation. It's called an exit assessment. And that gives you a snapshot of where you are today compared to where you could be if we tweaked a few factors in your business. But how we comp this out is, one, from your profit and loss statement, your tax returns. We get your bottom line, add in some things that need to be added back in. And then we find a multiple. The multiple is dictated by comparables. We have a database of sales across the nation, and we can refine it based on an NAICS code, which is basically like a plumbing business or all real estate contractors. You can refine it as low or as broad as you want, and then you can you can find businesses across the nations that have different revenue levels, have different structures, and then what multiples they're selling for. So then you'll come up with comparables and it might say, okay, businesses in this sector are selling for a multiple between 2.5 and 5.5. So then the question is, okay, Is the business I'm looking at more so on the 2.5 side of this or the 5.5 side of this and that's where like qualitative factors come into play with where like management. clearly defined employee descriptions. Do we have contracts in place with service providers or sales contracts in place with people that we're going to sell to in the future? There's just so much that goes into it. That's what dictates between what's From a risk standpoint, What are some of the risky exit businesses right now? You're like, hey man, or hey you, or hey business owner, you are in a very high risk industry and you probably should have an exit plan in place. Is there, would you just one off the top of your mind? I would think restaurants, but Yeah, I don't think there's one off the top of my mind. I'd say, Well, restaurants, I don't know if I'd call it a high-risk because restaurants have been around forever and they always will be around. Some other low-risk categories will be your plumbers, your electricians, your handymans, lawn cares. High-risk, I would say, would be more so fad companies. I think people in the past thought tech was a big high-risk thing because it was a high-growth thing, but I think tech is probably around to stay. I don't know if I could put my finger on something that seems flighty or risky right now. I know if you're looking at the stock market, you're thinking, okay, how long is a business like this going to be around? Cannabis is another one. Something that the sales can easily be shifted by government laws. So that's the high-risk ones for me, I think, is anything that can be changed by laws. So cannabis would be a huge one. If they outlawed all them businesses, they need to think of something else That's true. I guess Bill, having somebody that owns a bunch of dispensaries on the podcast before, it's interesting that you say that because they can't touch anything from banks. Everything's cash, cash, cash, cash. And there's no loans, which also tells you those people that start dispensaries clearly have money or have some type of, they don't So coming from the banking background, that, uh, that particular industry it's because it's not federally federally. Sorry. It is federally legal. No, I don't know which way it is on that. I can't speak 100%, but state by state federally. It is not federally legal yet. State by state. It is. That's why banks who are federally backed cannot lend on Yeah. No, it is interesting. That's what I mean. So like when you look at a cannabis one day, there's going to be have to be exit strategies for that. Right. I mean, yes. So I'm sure you guys are already working on that one. Yeah. So tell me about like the little, yeah, because I was, I saw, you know, not to say like, Hey, we, of course we just had, um, awful tornadoes. Was there been 28 tornadoes within like the St. Louis area in Like I had never put that, that together until you just Well, and I, yeah. And then I see EF 0, EF 1, EF 2. I'm like, I'm like, is he talking, is it like tornado really? But it's The packages, the different consulting packages with exit factor EF 1, EF 2, EF 3. So, like I said, we have the exit assessment, which is just an evaluation and can give you some insight as to where you're going and what you could be worth. EF1, 2, 3, those are just the levels of consulting packages. So, EF1 would be simply you get access to our online platform. You get all of our worksheets. You can do it yourself. That's basically what you're saying with EF1. You get all the resources that I have to work with, but you don't get consulting hours to go with it. You can call me. You can email me. I'll answer some questions here or there. But then EF2 is kind of a next step up. You get quarterly help from me. So we'll get a couple hours every quarter and really dive in on those quarterly sessions and figure out what you achieved in the last quarter and what we need to focus on for the next quarter. EF3 is high level consulting, so we're going to be talking every other week and I will really get into your business. We'll get into That's a major part because having that, you know, outside set of eyes is it's crucial just for like anything. Like, I mean, not just, not just your business, but just like sometimes your own lifestyle, right? Like just having an outside. Source to, to just judge and to give you, you know, constructive criticism That's exactly right. A third party source to, to get a set of eyes on your business. I mean, I, I'll tell you, I'm one. I'm not the most receptive to somebody leaning over my shoulder and being like, hey, you're not doing this, this, and this. Normally, I'll bark back. But then if I take a step back and think, man, that was a pretty good idea, and then I'll roll with it the next day. So having somebody else take a peek at what you have going on and giving some insight is definitely needed. And that's just how we're, you know, that's how we're raised. Because like you say, like the, the boomer generation, they love to do everything by themselves. Like, Hey, I did this. I, you know, I'm the assistant. I'm the, you know, literally every single piece. And we watched it with our own parents growing up. Like we wanted to be like that. We want to do everything ourselves, be independent, but like, it's, it just doesn't work Yeah, it is. You know, I, I built this, I did everything with my bare hands and that's fantastic, but let's, let's, let's retain that now let's get it to where we can continue to benefit from this even in our later years when, when And you can tell like people, they get run down from working so hard and trying to exit that business. Like they can't because they have to just work until, you know, they're dead practically. That I think is what future generations are going to really understand this a little bit better. Like, hey, you do have to have an exit plan in place. It's not just leaving a legacy in the future. You are literally building one every day. Like you say, it's not just at the end, you're having to do the whole process Yeah, most small business owners, there's more value in the business than there is in their personal assets. That's pretty easy stat for me to say. I'd put money on that. Small business owners, for the most part, there's And you know, that's always interesting that you say that because some would look at that and be like, well, it could be a bad thing or it could be a really good thing that, Hey, these people are investing into Yeah. Then you got to capitalize on that and actually get the money back out. That's, that's where I come in and yeah. help you increase the value there and get it to a saleable state. So back to that percentage where the 83% never sell, I mean, yeah, a lot of them get down the road. they just walk away. They, they have assets that they own. So like maybe a business owns some trucks or like, uh, like a HVAC company might own some, uh, metal bending material and some inventory. And so they don't get down to the end and they'll say, okay, I'm going to sell my trucks, my, my inventory, and maybe they own a shop that they're working out of. So they'll sell the real estate as well. And that's, You know, a lot of times that's probably paid off, so they do get some money from that. But what I'm talking about here is the actual business itself, the selling the blue sky, the name power, the financials, selling not just the assets. That is interesting that you say that because that's so true. It's like, when you think of somebody selling a business, what do they do? They liquidate everything, right? Instead of selling the business, right? Yeah. That's smart. I mean, you're definitely filling a gap that Yeah. I just got to get the word out there to people that it's actually a thing and that it's okay to ask for help. It's okay to pay for help. I learned that. Back to the KitKo thing. I pay my KitKo to help me with my mental state, to help me with these emotional barriers and everything that I'm working on in my personal life. It's okay to pay another adult to help you with something that That's so true. That's a good point. Business aside, just ask for help, ask questions. And that's one thing I didn't do until last year where I invested. I went from spending $0 on myself to thousands because I realized I had to change and you have to get help. You have to literally have outside help. to get you forward or else you just can't do it yourself. I mean, you can, you can be lucky and Yeah. This, this, this journey that I've been on in the last couple of years, getting to the point to where I am now with, you know, in my own business that I don't know who said, but, but, uh, I think, I think a lot of people say it. Owning your own business and being on your own will answer so many questions about yourself. It will shed a bunch of light on yourself and how you operate, as opposed to just being in this routine of W-2. No, not throwing a shade on W-2 people. Some people are made for that and some people operate well in that. I Yeah. I can see. I remember looking at your desk on our calls. Right. And you're just like, Oh, I hate this sitting at that wooden desk that you're always at that chair. You're like this building. No Yeah. Well, I use building as a metaphor. It's just like the rules, you know, you're answering somebody else all the time. And yeah, and in business, you're answering to your customers, you're answering to your clients to a certain extent, but I still make the rules. This is the rule book we're going to follow. Are you Yeah. So I guess when you would pitch, you know, exit factor to someone on why they should, um, you know, start thinking about their exit as strange as it's, you know, as soon as you start a business, you start thinking about your exit, right? It'd be easier to do it right when you start, because then it's slowly packaged together and you'll never lose anything, right? You'll Yeah. So, um, A lot of people think about it when they're within a year from leaving. And when you get to that point, it's hard to change the way your financials look. Really, the reason we say we need multiple years to help somebody is because you really want tax returns to reflect what we've done. So if we start in the middle of 2024, you really want to have 2025 tax returns, 2026 tax returns, and then sell in 2027. Then you can say, hey, look at these last two tax returns. This is how I've been operating for this long. Instead of, there are situations where we can do like a quick realignment and they can have six monthly profit loss statements to present to a new buyer and say, hey, this is how we've been operating the last six months, but it's just not as impressive. as it is to show someone that, hey, I've been operating this way for years. Because consistency is also a big thing when it comes to value. It's like, I've been operating this way for years. So that goes back to what you just mentioned with, on day one of you owning a business, you should be doing these things. That's absolutely correct. Because if you implement processes and procedures into your business like you're going to be selling it next year. On day one, your business will operate more smoothly, less headache, you'll have key players in the right roles, you'll have more time for yourself. Maybe an owner is a guy that loves sales, so he wants to be the key salesman. That's fine, but have it set up to where you have a job description for yourself. And then when you know you're a year or two away from retiring, you can hire someone to replace yourself, step out, and then it's easy to explain to a new buyer. Hey, I was the key salesman. I hired a salesman in my That's a good point. Cause you meet so many people that are like, what do you do? I'm just the owner, right? Well, you don't have a role in the company. You're just, you're just the owner guy. There's the owner lady. Like, what are you? You're just an owner. Some people love I mean myself, if, yeah, if I own a business like this business exit factor, I want to be a consultant. I want to work hand in hand with people, but at the end of the day, I'm at the top of this pyramid and I am the owner. So what am I doing currently? I'm hiring other consultants. that I hope they're gonna do just as good of a job as I can do as a consultant. I have one consultant that is a former accountant, so I know that she knows financials as well as I do. I have two going to training that both have great backgrounds working with companies. One was with Boeing, the other one was a consultant in some other businesses. And then, Then I just talked to a man this afternoon on the phone that's thinking about being a consultant. He's been in corporation for 25 years, and he just realized that it's his passion to work with the same type of business owners that his corporation worked with. So you got to find people that have the same motivations and the same type of work ethic as I do, and then hopefully, a few years from now, I can say, okay, I'm done being a consultant. I have consultants that That's smart. Having someone from Boeing, I mean, talk about a company that truly knows about exiting. I mean, they talk about one of the best companies in the world, I would say, to work for in terms of benefits, retirement, and then you have a CPA. I mean, obviously, yeah. When you're dealing with retirement, it's a lot of numbers. So you combine those two people. Yeah, I can't imagine anything would go wrong with that. Yeah. Being in the business that I am, I have to structure my own business the way I'm trying to help others structure their businesses, kind of practice what you preach type thing. So I'm trying Yeah. You know, it's one of those things, it's kind of like when people say, Hey, don't buy real estate for somebody that doesn't own a bunch of real estate. And it's like, well, that's not necessarily true. Right. Because it's just, it's just like saying, don't, you know, buy food from somebody that just opened up a restaurant. Right. How, well, how do you, like, how do you know that's not good? Right. Um, so I always, I always tread lightly, like, right. And I guess. Going to, uh, another question about, um, exit factor is what I guess I want to say, like, what drew you completely, like finally go, Hey, this is exactly it. Besides obviously you, you thought about it, you kind of created the bankable business in your mind already. Um, was that really just kind of how it just like, just That's exactly how it happened. It's kind of like, uh, yeah. So doing a lot of the inner work, the inner inner work, it's always, um, throughout life, whatever you want shows up like. Whether you want to believe it or not, whatever you want shows up and whether you act on it or not, that's up to you. So if you want this truck, you're going to see this truck. It's going to be right in front of you next week. Guarantee it. Whether you go buy that truck or not, that's your own prerogative. But that's exactly right. So I had this idea of being a consultant with that idea and then A year later, it smacked me right in the face in the form of this franchise. No kidding, I think from the day the salesman called me to the day I gave my deposit, I think it was eight days. I think it was eight days. It was a $10,000 deposit. I said, man, this is it. Then I moved forward with it. So I acted fast there, but then the actual exit from my W-2, I think if you remember correctly, it took me six months because I kept on thinking, oh, I can do this while I work. I can do this while I work my job and I Well, it's a, it's a, it's a scarcity thing, right? You're, it's hard to leave something. Yeah. I mean, that's, it's, it's not easy. And that's why having the help from, you know, like groups like inner wealth, um, you probably, you know, you might not be in the exit factor spot if it's, you know, people aren't helping you, you know, pushing you along because it is true. Like you to you and I both know, like. We, I'll tell you, you didn't believe in this type of stuff. I didn't believe in this type of stuff growing up. And both of us now have changed our mindset to where like, when you say, Hey, just be open to receive something. It's true. Like, and coming from you and I both, we Such bullshit. There's a story of our greenhouse in our front yard. My wife wanted a greenhouse and she thought she had somebody who was going to give her three greenhouses. We went there and the guy had a price tag on them, like 50 grand that he wanted for these greenhouses. And I said, OK, well, you want a greenhouse? It's going to show up. No kidding. I bought a house to flip in Maryland Heights and it had this greenhouse in the backyard. And I was funny about the whole thing, because I knew what had just happened. It just showed up in life. So in my negotiation phase with the wholesaler, I said, this is the amount I'm going to give for the house. And he said, no, can you give $2,500 more? I actually said, you know what? I don't even want the house. I just want the greenhouse. Can you tell the buyer of the house that I'll come grab the greenhouse out of the backyard? And he said, wait, are you kidding? So you don't want to offer on the house. And I was like, no, I just want the greenhouse. A Wow. Wait, so you actually got that house too? No. So that's interesting. So wait, so you got the greenhouse and the house. Wow. That's pretty, that's Yeah, I actually did. I wanted the house to flip. I Well, I thought I was just going to bring my skid loader there and pick this thing up and put it on my trailer. Um, the, the greenhouse was eight foot wide and the, the width between the house and the fence was nine, nine feet. Are you good? Gotcha. Yeah. I was like, this is going to work. Perfect. But the way the hill laid in everything, it perfect. I had to cut it in three pieces. It was the whole thing, but it's That said, then you put it back together. That's pretty good. What do you got inside that greenhouse? She's in there right now. She started a bunch of seeds in there. Tomatoes, all kinds of flowers, potatoes. Talk about exiting a business and owning a greenhouse. That R&R. A little R&R. This is pretty cool. So give me the last thing. I'll kind of wrap this up. What would you say the most underrated part of just owning a franchise, just having your own business that you can implement the exit factor in? What would you say is the most underrated part of So like, do you mean the franchise or just business ownership Just business owners, just in general. I'm, I'm talking, yeah, just in general, like what, like to be able to implement an exit factor, like, what would you say? Like, obviously be having your own business is awesome. Like being your own boss, but you know, what would you say is the best thing about, um, It's absolutely time freedom. Time freedom is the number one thing. And that's what I was going for in all this is that I make my schedule. And I think a lot of seasoned business owners that have gotten stuck in their ways, they'll argue that point and say, no, you actually work more in a business. Well, that's what you did. I understand that. But what I'm doing is I am trying to schedule my day. to where what comes first is my family and what I want to insert into my day. And then I fill in the pieces elsewhere with business stuff. If that means I'm working on a Saturday, that's fine. I'll work any day of the week. I don't have days of the week anymore. That's the beauty of being your own boss, is that I don't have days of the week anymore. I work when I need to work, and I family when I need to family. That's my new schedule. And I try to prioritize, like I'll look ahead to my next week, and if my wife needs to go somewhere on a Wednesday, I'll say, you know what, I got the kids. I got the kids on a Wednesday, not a problem. And then I'll maybe take a call or so. And yeah, it's just time freedom is exactly what I was going for. Uh, yeah, I love hearing that because when I ask that question to people, it's always like the ones that are like truly understanding, they always say that time freedom, no one ever like the, the real smart ones never go like financial stability. It's, it's truly not about money. It's about having that freedom. Obviously, money gives you options. We It used to be money. It used to be money. I have some friends that talk about it's all, I got to have a$300,000 job. I got to have this amount of job. I'm like, I don't even know what I make. I honestly couldn't tell you what I made in the last six months. I Right. It's more, it's more than enough. We're, we're doing good. Do, do is, is it 200,000? Maybe I have no idea. And that's the beauty of it. That's what I, that's what I was going for. I think a year ago, if you would ask me that, I would have said, I want to make $300,000 a year. And by the time I'm 40, I want a $5 million net worth. Why? What do you need that for? That's the answer behind that question is, what do you need it for? What do I want to do? Those things that I want to do is, I want to go to the lake with my family. I want to have enough to afford a boat. I want to have enough to do some of these things and take a day off here and there. That's what I want to do. The money will follow. That's so true. It's just like making memories. It's not that you want material things. It's just that you want to experience things and have your kids experience things while you get to experience them with them. And that's a totally different mindset than just chasing money. And like you're saying, the reason why you feel comfortable and you don't have to look at what you're making is because you're able to do what you want to do already. Why do you have to pay attention if you're able to do the trip with your family, if you're able to It's funny, my daughter asked me, I'm about five weeks removed from the bank. My oldest daughter, she asked me at least a few times a week, dad, when are you going back to work? I'm like, I work every day. That's funny That's true. And I think that's just part of being when you're present. It's just kind of it's similar to kind of like how my kid is like, I think he only thinks my dad sells houses. And I'm like, dude, you know, I'm I'm in that same office, right? Like we're doing the same thing, but I'm just I know him, right? Yeah. I'm just so present. And it's like, you know, they think Well, I guess, do they even have a job if they're always around us, right? Like, which is That's right. That is right. No, I love this. This was actually, this was a really good conversation. And I think anybody that, like you say, if you enter a business, why not just have this as part of your business entrance? Because you're going to have to exit. Like you say, every partnership's going to end. It's not your wife. It's not your significant other. It's a business. And most of the time it's going to come to an end and you have to be prepared for that. And be prepared for what the next moves are. Yeah, that's true. I appreciate you coming on here and talking about this. No problem. Any final exit factor words? Yes. Besides the fact that legacy doesn't just happen, it's built with intention. The root of all this is the why, and I know you know this too. It's why do you want to do what you want to do. I mean, if you want to sell your business, why? If you want to stay in your business, why? So like, you know, that's the first conversation I will have with business owners is why do you want to sell? And a lot of times the answer is, I want to spend more time with grandkids. I want to travel the world. I want to go fishing every day, know what you want to do. And then it is so much easier to Oh, that's a good point. I have a vision. That's true. That is so true. So well, I appreciate you coming on here. And if you want to connect with Michael, learn more, see what an intentional exit looks like. Check out the links in the show notes and the description. It'll all be there. You can connect with him. So as always, build, scale and elevate. I'm Blake Elsner. Catch you on the Thanks so much for tuning into this episode. We sure do appreciate it. If you haven't done so already, make sure you're subscribed to the show wherever you consume podcasts. 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