From Burnt Out To Bought Out

(00:00 - 01:02)
Here's a simple test. Leave for two weeks. Phone off, no email, tell no one how to reach you. If the thought of that made your stomach drop, that reaction is the whole episode. The vacation was never the point. A business that can't survive two weeks without you isn't a business you own. It's a job that owns you, and nobody can buy a job. Two years ago, David Todd went off the grid for two and a half weeks for his 30th wedding anniversary. And the business was fine. He mentioned it last week like it was a footnote. Ask him what it took to get there and he'll tell you ten years. In this episode, the two week test, what it exposes and the four handoffs to get an owner from nine years without a break to David's two and a half weeks so you can finally build a company that runs while you're on the beach drinking a margarita.

(01:02 - 01:32)
Welcome to From Burnt Out to Bought Out, the podcast for business owners who are tired of being the hardest working, lowest paid employee in their own company. I'm Jon, joined as always by Ryan and together we've spent years inside owner-led businesses helping founders go from running on fumes to running a business that actually runs without them. Every episode we break down the real problems nobody talks about, the burnout, the bottlenecks, blind spots and show you what it looks like to build a business that's profitable, sellable, and doesn't need you in the building every day to survive.

(01:32 - 02:25)
Whether you're grinding through a plateau, thinking about an exit, or just trying to take a vacation without your phone blowing up, you're in the right place. Let's get into it. Well that sounds good. Right? Having a business that doesn't own you. Mai Tais, margaritas, señoritas, sunbathing. I had to keep the rhyme going. Our wives don't listen so we're probably good. Nobody listens so we're definitely good. Good point. Yeah, margaritas are kind of essential. I feel like they're required throughout the nine years beforehand, the nine years prep to keep you sane. No, absolutely, right? It's so hard running a business and then knowing that even when you try to go away you can't.

(02:25 - 02:56)
Yeah, there's nothing like needing the break desperately and then not being able to. This is off the back of our last episode which was a great episode with David. Yep, our one and only listener David Todd. He came on and told us a lot and what it took to get him there and all those things and then he went away for two and a half weeks, not a care in the world because he had built the company to be able to survive his absence.

(02:56 - 03:27)
Yeah. And he talked through that process. So definitely listeners do spend some time in that episode because David kind of walks through the process. He tells it better than I think we've told it across multiple episodes, right? Because it's kind of compressed into his life story. And so yeah, David, we said thank you, but thank you again. It was a lot of fun as well. It was very informative, and I think it kind of put this episode together, which is, well, how do people do it?

(03:27 - 03:48)
Like, how do we actually get there? Because it doesn't seem possible in certain situations, right? Like early on, there's no way you feel like you can get away. So let's give us a test, Ryan. Give us a, obviously we'll have a composite story, and we'll, I don't know, we actually You tried to vacation and what happened, but what's the test? How do we kick this off? Sure.

(03:48 - 04:49)
So, you know, let me use the example of a $5 million business owner that didn't unplug for nine years, like the cold open said, right? Finally booked two weeks and the phone was supposed to be off, dedicated time with his family, right? Day three, a big quote, needed approval, nobody could pull the trigger. Day five, client escalation, day eight, cash timing because he told nobody what was going on, what they could do, what they couldn't do. By day nine, working on the beach, right? And that's on a vacation. It's an office with sand and his family's doing stuff without him. Right? And that's the problem. So I think the test is, you know, it's not that I relax on the vacation, right? It's more of what got caught fire the moment you stepped away. And that's what we're going to be talking about here, right? It's fires. And so whatever breaks when you're away on vacation is your roadmap to how to fix it, right? And we're

(04:49 - 05:19)
going to show you how to do it with systems, roles, and decisions that only you can make and how to get away from that trap. Because a lot of owners hold that as a badge of courage, you know, a badge of honor, but it isn't. It's a trap. Absolutely. I mean, can owners actually take this test? You know, how many people can actually even... Is this a real test? Is this something that, hey, you know what? Go out there and try it and watch it fall apart.

(05:19 - 06:18)
Yeah, I mean, that's what the choice is, right? Like, you take the test, even for a day, what breaks? Three days, right? God forbid you have to go away at a funeral, right, where you should be grieving and then you have stuff breaking all around you and stuff you have to set out, you know, step up for. Or what's worse yet is that, you know, you ignore it for the three days, you come back and the whole place is on fire. Right, right. So yeah, I mean those fires, there are lots of different types of fires, right? They're really not the problem, they're the symptom of the issues. So let's walk through some of those fires. What are those fires telling the owner? So every fire tells us three things. It's either a lack of system, role, or a decision right. Someone's right to be able to make a decision, right? So the missing system is, you know,

(06:18 - 07:20)
only you know how to do something, right? The process lives in your head, it's not written down, it's not a standard operating procedure, you can't go ahead and hand something off and have somebody else do that, right? Or there's a role and it's missing because nobody owns it so it defaults to you, right? Like only I can take care of the stuff because nobody else knows how to do that. And then it's the right to make a decision or decision right is that they're not allowed to. I can't order a part over $250. I can't approve a contract for X amount because it has to go back to the owner. And what happens is that the third one of a lack of being able to have your leadership team or whoever, your trusted people make a decision, it's really sneaky because you hired good people for what? We're not allowing them. And then, sometimes it's just pure dumb bad luck, right?

(07:20 - 07:48)
But that still counts because it's generally handled by you or I'll take care of it. I have no one else do it. But if we're going to work on one thing, the most common fire that we see is the approval. It's the decision right and being able to have those things in place. So what we're talking about is not necessarily fixing the fire, we're fixing the pattern.

(07:48 - 08:12)
Right, gotcha. So obviously, we just said it, the most common is the approval process for being able to make these decisions. Bad luck I feel is, I mean those are curve balls, right? Curve balls are always going to happen. Your team should be able to deal with the fastballs that come in. Hit the fastballs out of the park every single time. And that's just training and making sure that the team's prepped.

(08:12 - 08:45)
So speak a little bit more about the system. What does a missing system look like? Well the missing system essentially is that I have everything in my head. I've been doing it for a while. I've seen every aspect of my business, right? But I haven't told anybody about it. And so, what good is it if it's just in your head? And it's more of an ego thing at that point.

(08:45 - 09:05)
Only I can do this. It's all up to me, right? Because I'm the only one that knows how to do this X, Y, and Z, right? And so, what we need to do is say, well, what happens if something happens to you? Or if you want to go on vacation, right? That's always the question I ask. And the answer is, well, I just have to do it myself.

(09:05 - 10:04)
No, actually what you need to do is demonstrate it in front of people, have them demonstrate it back to you, and have a good level of confidence that it's going to get done. That is my Achilles heel. I'll admit, hands up, I find it very difficult to hand things off, and that's not because I don't trust the team. I find it very difficult to process eyes a lot of stuff that I do because I just do it, right? So I think all owners have that challenge. All right, fun fact! Fun fact, surveys of small business owners consistently find a large share, more than half, either take no real vacation at all or work through the one they take. The owner who can't unplug isn't rare, it's actually normal. So basically owners are living this episode. Right and treating it like a badge of honor, right? So I can't take a day off isn't dedication. It's a business that failed a stress test, right? And the owner never admitted it.

(10:06 - 10:29)
All right. So listen to the episode. Take the steps at the end. Let's go. All right. Time for a quick break. Brought to you by Expo Marketing out of California. And it fits because this whole episode is about things running without you. Expo Marketing's Beacon Line booths are tool-less. They set up without a crew. Which is the dream, right? A booth that goes up without you flying out to babysit it?

(10:30 - 11:00)
Portable and easily assembled means low freight costs show after show. They do the whole range, ready to ship displays in 5-7 days, and premium rentals where they handle the logistics and you just show up, plus full custom booths, islands, and double deck builds. Their line is we don't just build booths, we build trust. And the receipts back at 99% of their clients the year after year. A vendor that runs without your constant involvement on thing.

(11:00 - 11:41)
That is expomarketing.com out of California. They're great as ever. That's not. That's a good number. Yeah, yeah, on purpose. I know you're not. I hate numbers. All right, back to it. Ryan, you say owners kind of hoard four specific things without really realizing it. What are they? So the four things are decisions, relationships, knowledge, and approvals. So, decisions, the calls that only they can make, right? Most could, these could be done if you just actually trained your people on rules, right?

(11:41 - 12:09)
Relationships. Now, this is where the ego comes into play, Jon, right? It's the key client, the key vendor, right? They know my smile, right? And that's the problem is that they live and die with you, right? And then knowledge, right? And we always talk about concepts and understanding the concepts, right? It's the same thing, right? The history, the context, the concepts, why we do it this way, why it's the aligned way, why it's the Expo Marketing way, right?

(12:09 - 12:33)
People need to know why they're doing these things and that way they can apply it. And then approvals, right? I'm the only one that can keep the sign off. I'm the only one that can write those checks, right? Because it's either out of habit or fear. But what it does do is it creates a bottleneck, right? And a lot of those do create that bottleneck where it's only me.

(12:33 - 13:10)
And so, you know, the thing is that we always talk about delegate and elevate, and that's the exact opposite of what's happening here, right? We're keeping it to ourselves. So we need to really understand these four, you know, specific items that are keeping us from enjoying life outside the business. Right. OK. So those four things, and again, to reiterate decisions, relationships, knowledge, and approvals, how do you actually hand those off without it all falling apart?

(13:10 - 13:41)
Owners feel the standard slip if they hand something over and it's not. They don't do it to the owner's standard. How do we hand those things across? So each one is done in its own specific way. Decisions become rules. And so you write the rule down. If x happens, do y. If it's bigger than that, then let's talk about that. Let's escalate that to where I need to be and get someone to make that call.

(13:41 - 14:10)
Relationships need to become shared. I think I used an example of in a previous episode where I have a financial advisor, I only deal with that financial advisor, he leaves the firm, I'm going with that financial advisor, right? Because that's the relationship. Well, now when we have a shared relationship, we can — now the client or the vendor or the customer, they feel special because now they've got a team working for them, right?

(14:10 - 14:41)
And so they're getting another face, they're getting another knowledge point there, right? And so how we do that is we need to co-run it with that person, so we can establish that. Knowledge becomes documented. Do a video. Write it down, whatever you need to do, but we need to get the why out of your head. And onto a page, a checklist, whatever that needs to be. But your institutional knowledge needs to be passed on.

(14:41 - 15:04)
And then the third one is approvals become limits. We can set spending and decision thresholds. You can do all the things that you want to do up until a point. Go ahead and do those things. But when it gets to that point, we're going to talk about it. There's going to be an additional layer of approval. And I think that the next thing is we start with the approvals.

(15:04 - 15:37)
That's the most important thing, and that's usually the biggest bottleneck and waste of time. All right. So I mean, really, start with approvals. The goal isn't zero involvement really, it's about chosen involvement, right? Instead of it absolutely mandatory involvement and you just run through that process. You know there's, David said last episode, proof that this works was not a process document. Middle manager took his casino scooter rental, it was a job that lost money because it was a four hour road trip.

(15:37 - 16:04)
He found a retired guy nearby to deliver it and he set up a poker chip, a QR code so guests could book on the spot. I don't know if you remember that specific statement he made, but David's words were, he did nothing with that. All he had to do was sign off on it and that's an approval turned into a limit. And really that's what we're after at the end of the day, setting up our businesses and our systems to be able to achieve that.

(16:05 - 16:43)
Well think about that job. And I actually was there and she did a great job, right? But she took, so he has a core value and it's about extreme ownership, right? By setting the limits, by setting processes, by setting the systems he allowed her to go out and try and find more business because that's her role is in sales, right? And she took it upon herself to not only find the business but to set up the whole operational process behind it, right?

(16:43 - 17:09)
And how it's gonna work, mapped it all out, here's the financials, those kind of things. I was actually in that meeting when he went over that and there was such a smile in his eyes, right? It's like a proud Papa, right? And so he's — and he is really encouraging his team to step up and work without him and they're really taking off and finding ideas that he would never have thought of.

(17:09 - 17:37)
Right. That's awesome. That's what we want. Devolving the responsibility and having more brains, you know, pulling it all together. All right, time for my two cents. Canadian 1.4 cents US. It's on theme because it's about building something that runs without you babysitting it as well. So this is a little detailed, but a lot of people like to advertise in the Meta platform, Facebook and Instagram and they just do it by hitting the boost post button.

(17:37 - 18:09)
Boosting the post is really the platform's way of kind of just taking the money for their weakest form of advertising. If it optimizes for likes and comments it's not really set up to create leads or sales. So the engagement looks nice but the bank account doesn't move? It is exactly right yeah. So a proper campaign, when you set up a proper campaign in the ad manager, you optimize — you set up your conversions and leads and this will be boosted post many, many times over in the same budget and it's the correct way to set it all up.

(18:09 - 18:29)
It runs without you touching it daily as well although you've got to keep an eye on it. So my one step this week is stop boosting every single post, take some of that budget, build a conversion or lead based campaign in the ad manager. If you don't know how, that's the best thing you can hand to one of your team, an administrator or somebody that looks after your Facebook environment.

(18:29 - 18:56)
So do that, don't hit the boost button. You know, Jon, that was worth more than $0.02. I'm going to say it's worth $0.04 US, because not only is it good advice, but you saved people money and wasted money. So good for you, man. You're really starting to really get into your groove with this marketing thing. Awesome. It's only taken about 30 years. Maybe in another 30, you'll be there.

(18:56 - 19:30)
I'll be excellent at it. Be marketing under the grave. Be the wrong side of the dirt to take advantage of it. With AI, we're going to live forever. We'll see. See about that. All right, time for another ad spot, right? Yep, one more from Expo Marketing. And the angle here is the hidden cost, because that's a systems conversation. You are right. Every time you exhibit there are costs that quietly eat away at the budget, labor to set up, freight, drayage. Expo Marketing's Beacon Line is engineered to reduce and eliminate a lot of that.

(19:30 - 20:00)
Toolless setup means no crew fees. Lighter, smarter engineering means less freight. It's the same money leak logic we hit in every finance episode, just on a trade show floor. That is right, and as a Canadian, I respect anyone who takes drayage seriously, mostly because I had to Google what drayage was and learn how to pronounce it. And now I have opinions. That's my one. That's your one and an educational one and don't forget the number this time.

(20:00 - 20:27)
Buy a ready to ship display, rent a premium one, go full custom. expomarketing.com, 949-250-3976, award-winning and some of them are made fully in the USA. Okay, back to it. Bring in the exit angle here Ryan. What does all this owner dependency do with what the business is actually worth? So we talked about the vacation test, right? Well, that's what the buyer does as well.

(20:27 - 20:58)
They just call it key person risk, and they price it. We've done this on owner dependency before, so this is pretty much what's going on. So they're not just looking at your run rate, your three years of revenue, last year's revenue. They're really buying confidence that what is happening in your team, in your business without you, right? And so if the business needs you, they know that you're not really selling a company, you're selling yourself.

(20:58 - 21:26)
And that's the problem. That's what they're going to price in the deal. And this is going to cost a turn, turn a half on the multiple at least. Two big things that buyers price in is owner dependence and customer concentration risk, right? And so the thing that they're saying is, if you're saying I'm a great operator, that's exactly the trap. And that was a key word saying, OK, so how does this business run without that person?

(21:26 - 21:54)
When's the last time you took a two week vacation without checking in? That is one of the due diligence questions that they should be asking. And it goes down to those three legs episode that we talked about. It's that one leg. And they're asking if that business is transferable or not. And if it's not, that leg is wobbly. So the idea now is to fix it on your terms, don't discover it later during this process.

(21:54 - 22:21)
When it's gonna cost you. Big time. Yep, yep, you've got no chance to fix it. So, okay, owners driving home right now, they just realized, holy moly, I can't take a vacation. What is the one thing this week? Well, Jon, as you know, we are very much contrarian to a lot of things. So book your vacation now. Within the next 90 days, book it, put it down, make the deposits, you have to go.

(22:21 - 22:50)
Then work backwards. Talk to your team. If I'm unreachable for two weeks, what breaks? What are the things that are gonna happen that we need to look at now to fix? That whole list is what you wanna build and roadmap and start getting done, right? And build your systems, fill in a role, get you the right decisions being made, whatever it is that you need to fix will come from that list.

(22:50 - 23:16)
And if you can't leave yet, then at least try a one day version where you're unreachable for eight hours. Then see what happens. See where the fires are so that you can understand, okay, I can put these fires out now, then I can try that one day again. And then what breaks then? Pretty soon, you're gonna fix all those fires And it's going to tell you what you're missing.

(23:16 - 23:56)
And that's the biggest indicator that you can have. But the first thing I would do is set three approval limits for the week, whether it's signing contracts, paying bills, issuing POs, whatever it is that you're going to do, set three of those. All right. That sounds good. That's what you've done, right? That's what I've done. And we're still working on a couple of things, right? Because when fires happen, bad luck fires, whatever that is, that's just an opportunity to learn and put it as part of a process, put it in someone's role, or let someone else make the decision for it.

(23:56 - 24:24)
Awesome, great, yeah, you're away for a few weeks in December, so I think we should have a follow-up to this episode in January. We absolutely will, and I'm actually leaving, not for a day of being untouchable, but for three days to actually spot check it. Now I know why you disappeared a couple weeks back. That's right. That's what it was. See guys, he tests this out on us.

(24:26 - 24:50)
On myself first, then I give you, hey it does work. Yeah, that's awesome. It's not just theory all the time. That's it. All right, give us a take away Ryan. I think we're close to a wrap. The vacation was never the point. It's just the cleanest test to tell whether you've built a business or a very demanding job. Whatever catches fire the moment you step away is your roadmap.

(24:50 - 25:26)
Take it as a learning experience, right? It's either a missing system, an empty role, or decision right you've never handed over. And get it out of the habit. Hand each one off or replace yourself with a rule, a person, a document, or a limit and the fires stop being yours. They start being somebody else's that they can clean up for you. But do it now on your terms so you can get your business so that you can leave, sell, and actually enjoy the family trips with your family, doing those family things.

(25:26 - 25:53)
Family, family, family, family, right? Not laptop, laptop, laptop. Skip it and a buyer's going to make you pay. And your life is still going to continue to be the same, right? How chained are you to this business? So, you know, a business needs to run without you. And if a business runs without you, it's an asset, not a liability. So book that trip, be like David, and then go build that asset.

(25:53 - 26:36)
Love it. Google, three week fly fishing trips in Patagonia. Go. Oh my God. Put down the deposit, Jon, talk to your team, start building the roadmap. That's too expensive. Three day trip fly fishing in Patagonia. Three day fishing trip at local ponds. Yeah. Definitely do that one. But make sure that you don't hurt yourself. Safety first, everybody. That's right, that's right, yeah. For the record, I got a fly trapped in my arm.

(26:38 - 26:57)
Hit myself on a back cast. Yeah, that was great. Had to go to hospital. Had to go to the hospital and get it removed. Don't forget that part. That's the part. That's the most important part of the story. I'd have done it myself. I just thought it was in my tendon. They had to check. So yeah, that's it. Got it for free though. Canadian health system, love it.

(26:57 - 27:29)
Well, it's not necessarily free when you're paying a lot of taxes. Yeah, that's not that much. First rule of economics, there ain't no such thing as a free lunch. 2%, man. I've done the homework. Come up here. Everybody, come up here. Hang out. Take your vacation, preferably away from Jon in this podcast. Enjoy yourself. Do something fun. Don't listen to this. Awesome. That's a wrap. Thanks, Ryan. See you next time.

(27:29 - 28:02)
Hasta luego! — and start building something you can actually sell.