Welcome to Car Talk. This is not talking about cars. This is talking inside of a car. Today’s topic is about choosing a legacy. Now what do I mean by that. I have built a decent sized business, quite profitable, provides a nice living for my family and I and I recently kinda had a wild hair and thought, “I wonder if I were to sell this business, “what it might be worth at this stage of the game.” So went along that route for a little bit, trying to figure it out. Had a business broker from a local St. Louis company come by and talk about it yesterday, looked at some numbers to give a rough estimate valuation of what it might sell for, a multiple of seller discretionary earnings, SDE, which is about what I expected. I did my research online before anyway but I wanted to get a pro’s opinion and if I wanted to, I could easily walk away with enough money to live comfortably the rest of my life at 35 years old, something most people, the vast majority of people, never get to experience, to think, “I could stop working at 35 “and never have to work again unless I wanted to.” I could do that. I’ll be honest. I could easily sell it and I could walk away and live not an extravagant lifestyle, but a comfortable lifestyle, the rest of my life. Provide for my family, send my kids to school, the whole thing.
But, after that person came by I thought about it for awhile. I talked about it with Karen for awhile and had to run an errand to the bank and then on the way back, it kinda hit me. I heard Gary V say one time that when you build a business to keep versus build a business to sell, it drastically impacts your choices in the business. I already found myself trying to do what I could to legally manipulate a balance sheet to legally manipulate a profit loss statement to try to inflate this year’s numbers. I thought, “Well that’s what happens.” It makes perfect sense when you think about actually selling it because whether you make that hundred dollars this year or next year, most of the time you don’t really care about it as a business owner. But if you’re looking to sell you want this year’s numbers to be big so that multiple is higher if you’re gonna sell for three or four times your SDE, then you want that SDE to be as high as possible logically. And I don’t have any problem with selling the business.
I was thinking they might give some extraordinarily ridiculous number that I would think I would be stupid to pass up this chance. It wasn’t that high but it was plenty, it was about what I expected for high that I could live comfortably at the stage of my life from what I’ve already managed to earn and make and save and invest. I realized I was already acting and thinking differently about selling it and I realized that’s not what I want to do and I think there’s so much more opportunity and I love this game so much and I just wanna keep going and I think I have a real chance to build not a product but a brand out of this that can grow so much bigger than it is right now and maybe some day, so maybe not, and we can do a good, a higher trajectory of earnings, maybe again, maybe a year from now, if selling is an offer that I can’t refuse, but I had to choose legacy.
I think I can build something that can have an impact on some little mini, mini part of the world and as a byproduct make money for me and I kind of like the idea. I have one employee now, Ben, you guys’ll meet him once in awhile, and bring another employee, Josh, on in January. And I’m thinkin’, “Well I like that.” Maybe what I should do instead is have a legacy and once I am able to secure enough money to know that my four important people, my wife and my two kids, are covered pretty much no matter what, then maybe I could just focus on actually creating jobs and I don’t need much money at all then. What am I gonna do with it then.
Maybe that will be a much more meaningful legacy to leave with myself and yes, I like to make money. Who doesn’t like to make money? But after awhile you realize that’s not even the part of the game anymore. It’s about trying to build something of use, provide a good value for a good or service and if you can do that and execute that well, the money’s just the byproduct that comes anyway. I realize at this stage in my life I’m pretty good at making money. There’s not really any challenge for me anymore to do that so just tryin’ to make money is kinda boring, whereas trying to actually tackle something of significance, trying to contribute to the world, trying to build something that someday maybe my kids could be a part of, who knows. This kind of legacy, that is what yesterday I decided to do. Karen was already, “It’s too early to sell. “You don’t wanna sell. “You’re not gonna like if we sell.” And she was already right. She knows me well enough that sometimes she’s a step ahead of me on how I react to things. But I knew when I was driving home from the bank that it just hit me, popped into my head. This is not the right choice. I can grow this into a real brand of significance.
I got home and I told her I decided I don’t wanna sell. And she’s like, “Yeah I already knew it. “I already knew you weren’t gonna want to sell “once you came to that realization.” She’s a little more emotionally intuitive than I am. So that’s what happened yesterday. And no, they weren’t looking to buy it but just like with a house if someone sells your house can sell it for a couple million bucks and you thought it might sell for a couple hundred K, it could be an offer you might not refuse. That did not happen yesterday. It was, they said it’d probably sell for about what I thought it would, and that is not an offer that I could not refuse. I thought about it, popped around in a pinball in my head for a while and realized that is not the path that I want to take. For some people that could be the path of a lifetime, a dream path, and more power to ya if that’s how you wanna roll. I have no, I have no down speaking or criticism of that choice in life. For me, I want to build this into something of significance, a real actual brand, and I have chosen legacy. Car Talk, Tyler Douthitt.