From Crisis to Cash Out: How To Turn Burnout Into an Eight-Figure Business Sale

Ivan Polic is the Co-founder of Jumpstart Your Exit, which partners with million-dollar brands to help them grow, scale, and exit their businesses. As a strategic growth specialist, he has acquired, restructured, scaled, and exited small-to-midsize businesses to maximize returns. Having founded his business with his wife Mariana, they have served as advisors to small- and medium-sized businesses and on over 300 board of directors meetings in various industries and economic sectors.

Here’s a glimpse of what you’ll learn:

[3:58] How Ivan Polic overcame a 95% revenue loss by exiting his business
[6:30] Ivan shares how his professional soccer career led him to start an aerospace engineering company
[10:59] The importance of managing cash flow during tumultuous times
[19:06] What was the turning point for Ivan’s exit, and how did he shift his business approach?
[24:03] Rebuilding a business with a supportive team
[30:39] Ivan’s business sale process
[35:28] How to maximize business value for an exit

In this episode…

Many entrepreneurs don’t even consider the possibility of a business exit during the launch and growth stage. However, when operations suddenly go awry, and they become too overwhelmed to continue, they realize their company isn’t primed to sell. How can you integrate an exit strategy into your business from the start, ensuring you can pivot during tough times?

After losing 95% of his revenue and risking bankruptcy, business exit strategist Ivan Polic realized he had to restructure his entire enterprise to prepare for an exit. He began by developing a report that allowed him to visualize and predict his current and future cash flow based on the company’s financial and operational conditions. Through this deliberate and conservative approach, Ivan kept the business alive to evaluate buyers before staging a profitable exit. If you’re facing turmoil in your business and want to exit fast, you must identify each possible risk to present buyers with an accurate representation of your business, ensuring a smooth and timely exit.

In this week’s episode of Destination Business Freedom, Pat Mancuso joins Ivan Polic, the Co-founder of Jumpstart Your Exit, to talk about how he developed an exit strategy to navigate a business crisis. Ivan shares how he rebuilt his business with a supportive team, the importance of disclosing risks to maximize business value, and the turning point for his eventual exit.

Resources Mentioned in this episode

Quotable Moments:

"If I could do it from the bottom, where I was just burnt out to a crisp and couldn't let go of the wheel, you can do it wherever you are."
"Your business and your business' value are only going to grow as much as you grow."
"We were rebuilding an engine in a car while the car was moving."
"We didn't just survive; we built a team and culture that's the best I've ever acquired."
"You've got to let the sun hit the skeletons in your risk closet if you want to maximize your exit value."

Action Steps:

Implement a 13-week rolling cash flow report: This provides financial foresight to make informed decisions and prepare for future cash requirements.
Build a resilient and self-sufficient team: A strong team culture can increase operational efficiency and make your business more attractive to buyers.
Conduct an honest risk assessment: Recognizing and preparing for potential challenges can help maintain stability and appeal during the sale process or unforeseen difficulties.
Take a sabbatical after a major business life or event: It's vital to allow yourself time for reflection and rejuvenation to ensure the next steps align with your goals.
Engage in continuous learning and growth: Personal development is crucial; staying curious and open to new knowledge will improve your business' success.

Sponsor for this episode...

This episode is brought to you by the Mancuso Consulting Group, a go-to resource for entrepreneurs, CEOs, and business owners dedicated to personal and business growth.

Our team of experts has coached, consulted, and trained over 15,000 entrepreneurs, C-suite leaders, and business owners in areas of sales, leadership, organizational development, and personal growth. Additionally, Pat Mancuso has launched multiple multimillion-dollar business ventures, giving him a firsthand understanding of entrepreneurs' daily challenges.

At the Mancuso Consulting Group, we are committed to exploring innovative ways to help businesses and leaders grow their people and improve their bottom lines.

To learn how the Mancuso Consulting Group can help you unlock your full potential, visit www.themancusomethod.com, email us at pat@themancusomethod.com, or call 651-503-7355.

Episode Transcript

Intro 0:00

Pat, welcome to Destination Business Freedom, hosted by Pat Mancuso. Join us as we explore success strategies and hacks from leading entrepreneurs helping you bridge the gap between financial success and personal freedom. Your journey starts here.

Pat Mancuso 0:23

Thanks for joining us today on the Destination Business Freedom. I am Pat Mancuso, the host of our podcast where we interview thought leaders, entrepreneurs, and business owners who have either exited their business or on that journey. In today's case, we're going to be interviewing a business owner who exited his business with an eight-figure exit. My goal is to help small to medium-sized business owners close the gap between their finances and their freedom and ultimately define where and arrive at that destination and exit their business, whatever that might look like. Because, of course, there's multiple ways to potentially exit a business before we get started, though I'm going in before we get started, I'm going to talk about our sponsor today. So this episode is brought to you by the Mancuso Consulting Group, where we are committed to helping entrepreneurs and business owners close that gap between their finances and their freedom. We created the Mancuso Method, and it encompasses over 30 years as a business owner in multiple businesses and his work with 1000s of entrepreneurs, he helps them rise above the daily grind and arrive at their desired destination, which is the reason that most business owners started their business in the first place. When you go to www.theMancusomethod and take their short assessment, you receive a powerful report with a personalized roadmap to your destination. Additionally, Pat will provide you with a 30-minute free consultation to review that roadmap and offer you valuable insights based upon his over 30,000 hours of expertise working with business owners. Pat believes so much in the power of the process that he guarantees he will add at least $10,000 of value to your 30-minute call, otherwise, he'll write you a check for $500 on the spot. So if you're ready, go to www.themancusomethod.com , take the assessment and then schedule your call. So ladies and gentlemen, I am absolutely excited to share our guest today with you, and we're going to talk about his background here in just a second, but I have to give a shout out to Roland, Frasier, Deanna Rogers in the Epic Group, because I met our guest today at the Epic Group, and it's an amazing mastermind group that I'm a part of. So I want to give kudos out to them. So without further ado, let me introduce to you Ivan Polic. His story goes well beyond burned out and tired to free and inspired. He ran a very demanding aerospace manufacturing business and was swamped with challenges and sleepless nights, and I'm sure most of our listeners Ivan can relate to that as entrepreneurs, he turned the corner, built a team and a system until he was ultimately working two hours a week. He eventually exited altogether and sold to a private equity firm for eight figures for a 98% cash deal, which is unheard of, and in the process, it only lasted six days, which, OMG, Ivan, I've gotta hear more about that, but congratulations and welcome to the show.

Ivan Polic 3:24

Thank you, Pat. It's an honor to be here. I love your approach and all the last experience of helping business owners. It's a hugely needed thing out there, a lot, a lot of pain out there. Oh, there's no doubt, pain for sure.

Pat Mancuso 3:40

No doubt, no doubt. So I always like to start with the first segment of our conversation. Where did you get the entrepreneurial itch? Like, did you own other businesses before the aerospace business? Or was that really your first venture into it? And how did you get involved with it?

Ivan Polic 3:58

Well, yeah, it's, I was a professional soccer player. That's something in my previous life. And so that's, that's where I started everything, you know, the competition. And that was a major quest that I was on, and I was able to fulfill that dream. And then once I finished my playing career, that was, it was time to go on the next journey of learning. I had an electrical engineering degree, but I never actually worked in that field at all. I got involved more on the business side, and then I had a very large learning curve on the business side, and then I was able to acquire the aerospace manufacturing business, and just as I acquired it, I was very pleased with myself. I had to, I had to, I earned my way through in that business, and then I was able to acquire it. And just as I acquired it, we signed an amazing five-year deal. We moved into a new location. I was very happy. I was very happy. And. Six months into that start, the 2008 crisis hit us. Oh, wow. We lost 95% of our revenue, and the next six months were pretty much preparation on how to best go bankrupt. And so that was, that was our start. You know, how do we preserve a little bit of dignity in this, in this whole disaster, and somehow, you know, we were really blessed with, with a very strong mentor and an advisory group that helped us through that process, because we were done. And you know Keith Cunningham. I don't know if you know Keith Cunningham. You know the name, yeah, so Keith Cunningham advised us and said, We need to cut all the way down into the bones and muscle and everything. We had a 24/7 operation prior to the blowup, and after that, we were running one shift three days a week. Oh, wow. It was a huge thing, and that was the only thing that enabled us to have enough oxygen to actually turn the whole thing around, and this is the business that we eventually exited. Wow. Well,

Pat Mancuso 6:09

you know, so there's a couple things there. I would be remiss, because I know people you know have curiosity. So you played professional soccer. So who's the most? Like I mean, obviously I recognize your name for my soccer cards, but who would be the most um, recognizable name that you played with in your journey?

Ivan Polic 6:30

Um, well, I played against Carlos Valderrama, okay, the famous Colombian long hair. Yeah, an Afro person. You know, I played with Kobe Jones and Luis Hernandez is a national team Mexican star, okay, cm, fuegos, Paul Cali jury, with someone, with some players. Well, yeah. I mean this, you know, at the LA Galaxy level, there's, there are a lot of really high level, high level, absolutely,

Pat Mancuso 7:04

absolutely. Well, I'll be looking for my signed, autographed I card, so I can hold on to it and watch it go up in value. Yeah,

Ivan Polic 7:13

We can make that happen, but I don't know about the value part.

Pat Mancuso 7:18

Okay, so let's talk about this, this aerospace conversation. So one of the things you said, which I always like to point out, things in case, you know, people listening kind of flat, you know, kind of go right over it is without that, without Keith Cunningham, your business might not exist today, which is the importance of

Ivan Polic 7:39

consultants, right? Yeah. Really experienced advisors that you trust and that have been through the wars and been through the tough times. Yeah, my first major wasn't a recession. It was a complete disaster. It was a collapse. And you know, having been through a few of those, you see things differently. And so, you know, I advise people now, and having lived through that, I know I know what to say, when to say it, and how to say it and how to actually make it through. Yeah, but back then, without any prior experience, you're completely disoriented, and there isn't, you know, at that time, there was no hope, there were no orders happening of any kind. I mean, it's not like you could have done something. You Just, you just had to, you had to, you had to make a huge adjustment, right?

Pat Mancuso 8:42

Your target client was airlines?

Ivan Polic 8:45

No, it was all we made. We were at the component level. So we made, we cut metal into machine parts, okay, precision machine parts that went into different assemblies, that went on planes and military applications, mission-critical parts, okay? And so that's, you know, all those people also, everybody kind of froze, sure, sure. Nobody knew what they were doing. And everybody else was preserving cash, yeah, and there were no orders to be had. And so we did, like, $1.5 million in the first quarter of 2009 off of the backlog that we had. And then in the month of March, we did 37,000 enrollments. Mg, oh

Pat Mancuso 9:31

my gosh. So

Ivan Polic 9:32

We were losing 200 grand per month for a while. It was, it was, it was very, very tough.

Pat Mancuso 9:39

Oh my gosh. And so. So if I, if I remember what you said, basically, you bought the company, or you were involved in the company, and five months later you buy it, and or five months later than the crash. So 2009 into and we're going to talk about the exit in a little bit. But just for framework for people, you're at the bottom, you're. Bleeding cash. That was 2009 when did you exit?

Ivan Polic 10:03

I exited 2022, 13 years later. Okay,

Pat Mancuso 10:07

so just so we have some perspective in this conversation, we're going to come back to the exit and all that. Yet, here's what I want to focus on. So as an owner, obviously you had some amazing experiences, both great in the growth and coming back from the bottom, but you were at the bottom, and so those experiences were probably not very pleasant. So what I want to ask you is this, as the owner of the business and as you know, our objective is to help business owners on this journey wherever they are to get to wherever they want to get to it. What do you feel like were one or the one or two of the most important things you had to keep focused on or keep in front of you when you were at the bottom?

Ivan Polic 10:59

It was, it was very the, this is a kind of an extreme, drastic situation, but I had to focus on keeping a very close eye on cash, yep. And then I had to focus on, you know, making sure that we can, we can withstand the long enough time until we can get some work in, sure, keep the lights on. And so we had to actually prepare for what if it doesn't work, right? So we actually prepared for going, actually under because if he had kept going and we couldn't get enough traction for maybe three more months, six more months, we would have been done, right? That's the value of early enough decisiveness, right? Had we hung on longer and wasted some of the resources that we had at our disposal, we wouldn't have made it. You wouldn't recover. Yeah, so we had to make the drastic cuts early, early. And that's that's something that's very important in a situation that are drastic like this,

Pat Mancuso 12:09

yeah. So, Ivan, I want to, I want to hammer this home, because I think people might hear what you just said and go, Well, I'm not in that situation. It's not drastic for me. But from a consultant's perspective, I think what you just shared is applicable no matter what stage of the business. That is, most and many business owners, a lot of business owners, whatever we want to characterize it as, don't keep an eye on their cash. In fact, a lot of business owners don't even know what a cash flow statement is, they look at their bank account. And so you know that, I think it is really important. And then the other thing that you said, that I want to kind of tag on to was, is that we don't respond fast enough, right, like we look. I was having a conversation earlier today in one of our prior recordings with an individual, and he was talking about exactly that point, that they were going through some challenges, and they waited too long. Now they, you know, they didn't, they didn't go out of business, but they burned through a couple $100,000 of cash that they wouldn't have maybe had to burn through if they would have responded earlier. So I just, I love those points, because I think they're applicable, you know, no matter where somebody's at,

Ivan Polic 13:26

Yeah, I agree with that. One thing that was very important is that we did something called a 13 week rolling cash flow, yeah, report and process in order to know and predict cash. Yeah, not only where are, where are we today, but where we're going to be 13 weeks from today, depending on the current conditions and the best assumptions we can make. And so that was, that was very, very helpful. It provided a little bit of certainty and predictably in a very unpredictable environment. You know,

Pat Mancuso 14:02

it's interesting that you say that, and this comes back to exactly what I just emphasized is that we're working on a product right now that we'll be able to roll out to our clients that does exactly that, like you did that 13, you know, week future, looking, forward, looking cash flow, because you didn't have a choice. If you didn't know what that looked like, literally, you would have been out of business based upon what you said. And yet again, I think every business needs to have that 13 week, 13, month, 13, year. And people go, Well, you can't do that. And we're going to actually be able to help companies with that, where you know you can manipulate that data. Because if you don't know, you know, in your case, let's use your case. If you didn't know what the third of the next 13 weeks looks like, and you made a decision today that would have sucked some cash flow 13 weeks from now, you might have needed that money and then made a different decision differently. So I love, love. Love that you brought that up. It's, it's. Huge. So let me ask you about this in that journey. So you know, over that period as a business owner, you probably had to make some tough decisions. And it sounds like maybe one of the first tough decisions you had to make was you had to probably lay off people and terminate people because you didn't have the cash to pay them. Were there other decisions, I mean, did you do that, and were there other tough decisions that you had to make in that journey?

Ivan Polic 15:28

Yeah, we had no choice at that point. We had to make a lot of difficult decisions. This was a very difficult business, yep, business that is in a kind of cascading abuse relationship, if you would, from the top Williams all the way down to the bottom, and we were on the bottom at the component level. So not a lot of control and pricing, not a lot of control and conditions on the quality, clauses, on the changes. So it was extremely difficult to keep up with that. And somewhere along the way, we had one of our biggest customers say, You know what? I think we want 100% 100% quality, the zero defect environment when we were making 11,000 components per day. So we literally, we literally didn't know that parts were good yesterday, parts are no good today, yeah. And so every day we had parts, we didn't know if they were good or not. And then I use a metaphor for this as we were rebuilding an engine in a car while the car was moving. I love that. It was, it was really, that was the second part where I didn't know if we were going to make it. Oh, man, I was really, really struggling. I was burning out pretty hard. There were major challenges. I remember one time driving up to the building and I couldn't I parked and I couldn't let go of the wheel. I was that burnt out. I thought I was like, if I walk in there one more time with those same stories and problems and things, I'm going to lose my mind. I felt that I was gonna, I was gonna have a heart attack or something. It was if I kept pushing, it might have happened. That was actually my turning point, yeah, of making a firm resolution with myself that I'm gonna build a team that can run this place without me. So

Pat Mancuso 17:38

I want to come back to that. And yet you use as an entrepreneur, we all face those, like sometimes those, do I really want to keep doing this? Is it really worth it? I'm lying awake at night. I mean, I think all entrepreneurs face that. And so just for perspective, oh, nine, 2000 again, remind me 2022 correct. Okay, so at what point did you hit rock bottom? What year?

Ivan Polic 18:08

Well, this was maybe 2020, 1718, when I had my complete Wipeout. I mean, I personally, I personally said I must do this differently, because I was pushing, pushing right was dependent on me. The team wasn't strong enough. I was plugging all the holes, firefighting, babysitting, everything you can in an operation that was running 24/7 you cannot do that. You just burn yourself out, which I did. And then from there I turned the ship around completely with a completely different culture and team and people. That was a major journey. But that's the part that I'm the most proud of. So

Pat Mancuso 18:52

Let's talk about that. So What? What? What was the cause, the deciding factor, the aha moment that you said, Okay, enough is enough. I need to do this differently. Like, what? What was that moment I just,

Ivan Polic 19:06

I described it for you. It was in the car. I couldn't get out, I couldn't get out, and I was like, I think, I think this is going to end me. I think I was somewhere. It was really existential, yeah, my kids won't have a father. Wow. Wow, my kids won't have a father. I mean,

Pat Mancuso 19:26

like you didn't want to end the business. You wanted to end everything.

Ivan Polic 19:30

My kids won't have a father because I'm going to have a heart attack next week. Yeah, yeah. Running on fumes completely. And then I was chasing some kind of standard that was impossible. I think it was some kind of I was trying to prove something right. I was trying to prove something and take on the world. And I was doing pretty darn good, but it was not sustainable at all. Oh, man.

Pat Mancuso 19:59

Yeah, well, man,

Ivan Polic 20:00

I had to make a major shift in my approach. So,

Pat Mancuso 20:04

So let's go back to that for a second. Like, what was that? So, you got your hands on the wheel. You're, like, deciding, you know, you might be, you know, like you're at that point. Like, okay, so now you go, Okay, I can't sustain this anymore. What's the first thing that you did after that,

Ivan Polic 20:22

I had to pause. So what did that look like? I had to pause. And I had to take, take some time, yeah, and I had to take a break. And, you know, obviously I was working insane hours, so my break was more like a normal, uh, normal human, but break hours. But I had to take a pause, and then I had to ask myself different questions. I had to say, is it worth it, right? And if I project doing more of this, what will happen, right? And all I could see was not good things. I mean, it wasn't gonna need a shift. And then I was considering what kind of shift it was. It was, I would say, a letting go process. So I had to let go, right the vision. It was some kind of Spartan commitment thing, the gonna warrior and I had to let go of that, yeah, uh, a warrior wasn't going to solve this. This. This was a major ship. It was a, it was a major, big old operation that was not going to turn on a dime. Uh, no, no matter what kind of warrior is going to tackle this, it needs more wisdom. Yeah, he needed more introspection and more reality.

Pat Mancuso 21:46

You know, you said two things there, which I think is really important in I want to, again, I want to kind of tag on to them for people, I think the first one is, as entrepreneurs, they we struggle with the taking some time, with the pause, with the you know, it's hard, no matter if you're, you know, an entrepreneur with, you know, 10 employees or 10,000 and then the second thing that I think you said is that reflection it caused you I think, I think every entrepreneur I've ever had On this program, and every entrepreneur I've ever come into contact with, including myself, is you hit ceilings where you have to give up. You have to give up. You know, whether it's leadership, you have to give up roles, you have to, you have to give up to get right. And I think sometimes what happens is entrepreneurs look at that decision, and they're, they're like, not willing to make it right. And sometimes that's ego. And I know in your case, there's no ego there, and yet, that is a decision that a lot of lot of entrepreneurs struggle with

Ivan Polic 22:52

making. Yeah, we cut, we go out a lot of times, and we are involved from the beginning, so all the things that had to be done, and decided we did it all. And so then sometimes we get attached to that kind of, you know, this business is me, and I am my business type of thing, identification with the business. And that was, that's a piece that that I have to let go of, yeah, because of this thing, this thing wasn't gonna, wasn't gonna turn around itself,

Pat Mancuso 23:24

and the ramification that would be, you know, significant, right? So, I mean, you really did. I mean, you had a choice, but you didn't really have a choice. So, I mean, I think if I asked you, probably, you know, one of the things you're most proud of, you're gonna tell me, you know, of course, that, you know, it's the coming from the ashes, so to speak, right? But if there was one piece in that journey that, aside from that, that you feel like was a big success, or you're most proud of, or, you know, really jumps out at you, whether it was a decision, you know, med was a decision not to do something, what? What would that be? What would stand out in that journey, the

Ivan Polic 24:03

the biggest success, the biggest success, is how we built a team, how the team came together, how we faced impossible odds, and how we prevailed. And so we pretty much, you know, facing the, you know, rebuilding the engine while the car is moving. You don't decide yourself. I remember walking into a war room meeting and saying, Guys, if I could have solved this one, I would have already solved it. Yeah, and if we don't solve this one, we're done. And so if you got any ideas, now is the time, and literally, that was really vulnerable, if it was the truth. And that was the turning point, the inflection point of me owning all the problems and me carrying all the problems and and including the. Including the team like that, vulnerable, everybody's eyes were open, and they were starting to realize that they need to participate in this if they want to be a part of it, still. And we built a team. We did that morning War Room meeting for three years straight, at the same time, and at the beginning we had all the 15 different leaders across our entire organization in the room. These meetings are 90 minutes long at first, and then they went down to 60 to 30. And eventually there were 15 minute meetings. Everybody was learning cross departmental things and how the business ran and all of these things it was a, it was an incredible process. But what was really rewarding about the private equity buyer seasons, you know, buyers said that this is the best culture and team that I've ever acquired. And the six day thing that you mentioned, that was a six day transition, they said, oh, we need, we need you to stay. And we said, you don't. You don't need us. You This is, this is good. It runs without us. You don't need us. He said, No, no, no, we need you. I said, No, we, we're not going to do it. I said, No deal. He said, Well, I said, maybe we can do a little bit more. So he said, six months? How about six months? We'll do two days a week for six months, and I think that that could work. And they said, Okay, let's do that. So in the third week of the transition, brought us into the boardroom and said, You were right. You were right. Thank you very much. Six Day transition, and that's the testament to the kind of team we built. And what feels the greatest is what that did, what that did for those people, the team members, the leaders that stepped up, what that did for their lives, what that did for their careers, for their people, you know, parent, family at home, what kind of what kind of potential was stopped through that, and what that proves to them in their careers and lives, that's the part that's the most fulfilling on the defying the odds together.

Pat Mancuso 27:11

Yeah, you know, you, you, you hit the thing that I think other leaders struggle with, and that's succeeding through others. And yet, there's no more rewarding thing for a great leader than to experience that right? You can't describe it when you know the team that you've built gets to experience that joy, that success, as part of the process. So let me ask you a couple of questions before we tap into the exit piece of this. So who are some of you you know, you mentioned Keith Cunningham. Who Are there any other mentors that you believe had an impact? You know, maybe you didn't know, maybe it was a book that you read of theirs. But are there one or two mentors that really have impacted your journey as an entrepreneur?

Ivan Polic 28:01

Tony Robbins is a big influence. Uh, both my wife and I became trainers for Tony Robbins, so Wow Tony's events and ran teams for him at Eddie's live events across the world. Um, another huge mentor is Bert Hellinger. Uh, he is a systemic and family and organizational facilitator. He started an entire modality of looking at systems and people and how to make things work. There's a huge influence, and a huge part of the reason why we were able to get through this. Dave Logan wrote a book called tribal leadership. Actually, Phil Jackson modeled some of those things in the triangle offense and the triads through that. That was a big part of our journey, because we built a tryout of leaders. Yeah, who replaced me? Most owners are kind of unicorns with multidimensional skill sets and characteristics and things. And so we always say that when they think of replacing themselves, they say, oh, impossible, impossible. And I have to agree with them, because it was impossible for me too. You're right. But what if we put three to five people exactly to replace you with complimentary skills? And so that's a model. So those are something, things and people that came to mind as you asked me that question.

Pat Mancuso 29:32

That's awesome. I love that. And all just a great number of those I've heard of. And then what I love about always asking that question is now I get to go and do some research on somebody that I don't necessarily have a reference point for, and that's why I asked that question. So one other question I wanted to ask you, just for a reference point, so what at the highest point, if you may or or during the journey, how many total employees were in the organization? Because you mentioned 15? Leaders, which tells me there were a lot more people, 110 people, awesome. Okay, I just wanted to have some perspective and make sure others had perspective. Okay, so we're going to transition to the exit. And the first question that I have is, so you exit in 2022 At what point did you start thinking about exiting, like, what year?

Ivan Polic 30:26

So probably 2015,

Pat Mancuso 30:31

so you're still in the you're still in the kind of the we got a lot of stuff going on mode. And so what Tell me about that? A little bit.

Ivan Polic 30:39

It was brain-damaging the old the whole way through. It was really demanding and difficult, and we always knew we wanted to, we wanted to create a wholesome situation, take care of the legacy and the team and people and all, and create some freedom for ourselves. But we didn't know how, and we failed due diligence twice. So we were in two previous processes, and we fell out of them because we were we've failed. I mean, we didn't, you failed, or the buyer walked away. Well, the buyer adjusted the valuation, which made it completely not so I call it we failed because, okay, I love it. I love it. We failed. I mean, but then when we could have sold, but not at the terms that were acceptable. So we know a lot about due diligence, and not because we like to, but because we have to learn about it. That's, that's part of the kind of funny thing that we say, and we prepare people for sale and and all kinds of things in that experience service really well. And we did ace it at the end with 98% cash deal, which, which is unheard of right in that type of company with equity, you know, private equity or venture capital firm, or, you know, any that's unheard of.

Pat Mancuso 31:51

So, how did the buyer approach you like you went through two due diligence. Were you marketing the business? Was a broker marketing it? Or was it just through word of mouth?

Ivan Polic 32:18

The first time it was an industry, industry expert, okay, was in a very narrow niche expert, and they knew, they knew all the major players. So we were kind of looking for a strategic buyer. That didn't pan out, obviously, because we, you know, we were not in the, we were not in a prepared state, yeah, but maximizing the maximizing the exit. And the second time it was actually an investment banking track, and that one didn't work either, because we were still not prepared enough, yeah, and we flunked out of due diligence. And then finally, the third time was the full on investment banking process. Yep, that went through. And we had the entire, entire process, by the book, to get interest and potential buyers and go through the process.

Pat Mancuso 33:18

What year was the first buyer? What was it for? What was the first offer? What year was that? I think, 2015 ish, Oh, really. Oh, wow. Okay, and then the last buyer that ultimately purchased it. What year did that process start? 2021 Yeah. So one of the things that I'm not telling you anything you don't know, but in in this process that that, you know, we're both in a mastermind group that's focused on business acquisitions, and you know, of course, in that case, we're on the buyer side, right? And yet, what you've shared with us today is that, you know, many businesses are not prepared for the exit. And the reason that that's such a huge, huge blind spot is that means then the value that they're likely going to get isn't what they likely expect to get. And frankly, they don't even understand, you know, like, if you sell a business for 10 million, everybody goes, well, I'm taking 10 million away. No, you're not, like you got a 98% cash deal. So you know, 98% of 10 million, you know, 9.8 million, but you've got 30 to 40% in tax. And people go, Oh, wait, I kind of forgot about that. So it just goes to the value of understanding. And I'm kind of tying into why these podcasts are so important to me. It's tying the understanding to we've got to get on that exit a lot sooner than business owners are thinking. Because in your case, you had kind of like, this was the kind of like, the 2015 I'm kind of done with this deal. And yet, if you would have exited in 2015 you would have gotten nearly the value that you got when you exit in 22 I'm guessing. Or. Sure, yeah, yeah, I love that. So what else would you share with listeners, owners, you know, let's just perceive they're at some stage of, you know, they have no desire to exit, not even thinking about it to I'd really love to give this business to somebody like, what would be two or three things in that journey that you you know, other than what you shared already that you'd share with somebody who's listening.

Ivan Polic 35:28

One thing I want to share to the operators that are very involved in their business, and that may be thinking to themselves, man, I, I'm so I'm so buried in here that I don't even see the possibility. Like I, I literally had only this much, like maybe it could work. The gap was so huge to actually building a team that I didn't, I didn't think it was possible. So I want to, I want to, first of all tell the operators, it's possible, right? If I could have done it from the bottom, where I was just burnt out to a crisp and couldn't let go of the wheel, walk in one more time and do my own building, if I could do it from there, you can do it wherever you are, okay, that's the first thing. It's possible, and you can do it one step at a time. It may take some time, right? You can do it okay. That's what those guys and the guys that have built a business that is doing pretty well, I want to tell you, if you're thinking of exiting, you gotta sit down and you gotta write down all the skeletons in your risk closet. So because you have some risk skeletons that you are kind of in the back of your mind, you know they're there, yeah, acceptable to you, because you've been running this business 20 years, right? Oh, the X will happen and Y will happen, and how you're going to deal with it. And even though you know how you would deal with it and you have a high level of confidence about it, let me tell you, the buyers will not have that no, no. And so you must write down and pull out all the skeletons, and you have to look at them. You got to let the sun hit them, and you got to get an outside perspective on them. You have to probably work with someone that can bridge the gap of what the buyers are going to think so you can hear that unfiltered perspective. And then you gotta actually address all those things if you think you're gonna get anything close to the maximum value for your business.

Pat Mancuso 37:46

Yeah, you know, it's funny that you say that. And, you know, just as an aside, you know, I get so frustrated with politics, and just the whole political thing, right? Doesn't matter what side of the aisle it is on. And I always think about running for office, and then I always think about the skeletons that I have in the closet. You know, the 17-year-old girl that I dated, and, you know, the dad didn't like me, and it's gonna come out of the woodwork. You know, I, when I, when you said skeletons, it always comes to mind, because that's why I'm not running for office. There are skeletons someplace that somebody will remember. And, you know, so when you say that, it just hit me like, yeah, exactly. And yet, and yet. Here's the thing, everybody's got them, right? Every company has blemishes. Every company has things they wish they would have done better. And I think the biggest thing to kind of pull out of that, correct me, if I'm wrong, is the skeletons aren't necessarily bad things. You know, like a skeleton could be 70% of your business is focused on one client, and therefore the buyer is going to look at that and go, if we lose our that client, our value, you know, dramatically decreases. Those are not, you know, we call them skeletons, but they're things we don't really think about, right? And that is so important for the due diligence part of the value. So, yeah, I love, I love that you brought that up.

Ivan Polic 39:03

Transparency with those things really helps you. Don't want to, you want to come out and tell them all these things, right? Find out by themselves your valuation is going down, or the whole deal might be tanked, because they can trust you for not disclosing that, right? They're wondering what else you didn't disclose. And if you have the skeletons, it could be the way you track inventory, the way you did the numbers, the way something is organized, though, maybe you have a key employee that they're not sure is going to be staying right, then you're in trouble. So you have to actually de risk the business, yeah, de stress the business in the actual facts that will make your business run better. You can actually exit without exiting. You can actually create freedom while still owning your business, which is what we did, which is what I recommend, and when the buyers come. Them. You say, Well, I'm not really involved in operations. That's music to their ears. And, yeah, it does incredible things for your valuation. Yeah, well,

Pat Mancuso 40:09

And you know, you, you've, I'm sure, heard this, I mean, like due diligence in some aspects, for some buyers, the whole goal is, how much would carry, reduce down the, you know, the price that we initially offered. So you just kind of eliminate that. Take it off the table. Oh my gosh. Ivan, you've been amazing today, like, by far. I mean, this has been an amazing, you know, insight in your journey. And, you know, I'm grateful that we have an opportunity to talk today. So what I'm going to do, we're going to put a ribbon on this conversation. So I want to ask you a question, and I haven't prepared you for this, and yet I know you'll be prepared if there was one thing you haven't shared with us today that you really feel like would be important to share. What would it be

Ivan Polic 40:59

about anything? By the way? Uh, yeah, I think I already alluded to it. Um, but I think that your business and your business's value is only going to grow as you grow. And so looking out to continue to have a beginner's mind, even though you might be at the top of your hill there in your business, you may be the Michael Jordan of your space. You might be the best of the best and maybe you can learn about how to roll other people in. Maybe you can build a team around you. Me, there's always something to learn. And if you continue to grow, your business will continue to grow.

Pat Mancuso 41:46

So I didn't ask you this, but it just, it just kind of triggered me. So you do the exit in 22 What do you been doing since 22

Ivan Polic 41:55

Well, funny that you asked. We thought that we're going to just go guns blazing into the next thing. But I learned, we learned that we did. We did a decade of very heavy lifting. So as much as we thought we're going to just keep going in the next venture, which is the Jumpstart Your Exit adventure, yeah, we learned that we needed a sabbatical. So we took about a year of just slowing down. We didn't plan for it, actually the opposite. We were actually planning to just go and we realized that we just couldn't. It was like, it was like an empty climax, and we were wiped out. Yes, we needed to pause and slow down and I actually didn't want to continue building the new business with the same kind of patterns from the old business. So I needed a pause there, in which we took and took a lot of actual silence and went into introspection to the end degree, because we wanted to see what really now that we have the space for what wants to happen now. And that's what was very, very useful. So preparing a little bit for that process after the exit is very, very smart. And after that kind of rest and unwinding. We've been sharing this information with other business owners in a similar position, like us and people that can learn from our journey. Get out of the grind the operations, free themselves up in their own business, and eventually, if they want to exit, they can also have that option, and that's what we've been doing. We're very active on LinkedIn, sharing these stories every day. There's a new story coming out from the wars of the past, and yeah, and being a part of an amazing mastermind with you, Pat also, and continuing to learn, because there's always more to more to grow into?

Pat Mancuso 44:01

Yeah, well, I love it, and I'm so glad that I asked you that question, because I think there, you know, there are people who prepare for the exit and whether they prepared to ride off into the sunset, or were they prepared to take time off, or whether they prepared to do something else, about 75% of the time, what they prepared to do isn't what they actually end up doing. So it's such a great way to end So Ivan, if somebody wants to get in touch with you, reach out to you, make a connection. Where would be the best place for them to

Ivan Polic 44:29

do that? LinkedIn is a great place. We're very active there on a daily basis. We're doing a lot of education there and sharing a lot of information. So there's already a lot of resources there people can get and beyond that on our website, jumpstartyourexit.com you can also see part of our process, part of the advisory board that we both are a part of, and all of the different things on how we do. We do, and the track record of our work.

Pat Mancuso 45:05

Yeah, I love it. I love it. I love jump start. You guys, that's just awesome. Well, Ivan, again, so grateful we had the opportunity to talk today. You've been amazing. You've contributed so much to our conversation. So I just truly appreciate your time.

Ivan Polic 45:19

Thank you very much. Pat. It's an honor and a pleasure. Yeah.

Pat Mancuso 45:24

Thank you and listeners. Thank you so much for your support. Whether you listen to us, you know, on the on videos, whether you listen to us on your favorite podcast, please, please. You know, go to your social media. Like us, follow us, share it, because we do what we do because of your support, and we so appreciate it, allowing us to bring great guests like Ivan to the table. So everybody, thank you so much again, Ivan, thanks so much. We appreciate you. Everybody. Have an amazing day. Take care.

Outro 45:55

Thank you for joining Destination Business Freedom with Pat Mancuso. May the insights and strategies shared guide you towards financial prosperity and personal freedom; continue to navigate boldly until next time, keep transforming challenges into achievements. Farewell and stay the course. You.

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