Yvonne Heimann [00:00:00]
You've been building for years. Maybe it's been three, maybe it's been twelve. You've made payroll when you weren't sure just how to. You've hired people, you let people go, you rebuild things from scratch at least once, probably twice or even more times. The business runs, it grows, it has your name on it, maybe not literally, but in every other way that matters. And somewhere in the back of your mind, there is a question you don't say out loud.
What happens to me when this is over? Not the money, not the transition plan, you. Because here's what nobody really tells you about building a business to sell. The exit doesn't fail at the negotiation table. It fails years earlier. When the founder can't separate herself from what she built, when the business isn't an asset, it's an identity. And walking away from it feels like walking away from yourself. Only 1.37% of businesses that sell a majority stake are female founded. That number isn't about access or opportunity, not so much. It is too. But it's about the psychology and emotional work most women never do. We don't think about it.
My guest today did it. She built, she sold, and she's in the middle of her earnout right now, doing in real time what she teaches. She created Exette to change that 1.37 number. And this conversation is going to change how you think about what you are building and who you are beyond it. She Is A Leader is a podcast for women entrepreneurs who are done playing small and ready to lead in business, in life, and every room they walk into.
Yvonne Heimann [00:01:52]
I'm your host, Yvi. And this is the show where real conversations lead to real growth. So let me introduce you to my lovely friend who I got to meet in Scottsdale, Alisha Pennington. You build your company over 12 years, earned three Inc. 5000 recognitions and sold for multi-seven figures. And you are now in your own out and you are building Exette, a movement to normalize women exiting their business on their own terms. She's also a Forbes Business Council member in the author of Power of the Pivot. And we meet and met in Scottsdale, and I had a full-on girl crush on you from the moment on because.
Exiting a business is not just about exiting, is it? Right? We dove right into that conversation of ladies. If you were listening right now and you were like, Yeah, but I don't want to exit. There's a whole bunch of other things that even just thinking about exiting brings to your business. But I want to start with okay, tell me about this whole idea of removing yourself from business.
Alisha Pennington [00:03:00]
Yeah, first of all, that's an amazing intro. I I love everything that you said there because it absolutely is the truth, right? The exit doesn't fail at the negotiation table. It is long before that. And like you said, it's the psychological and the emotional components that I hypothesize and the research is backing me up that is the reason why women aren't even finding themselves at the deal table and so what does it mean to exit your business? What does it mean to step back? You know, this is a loaded question based on who she is, what type of business she runs, what stage of business she's at. And the most common thing I hear from women is I'm not ready. It all relies on me. I'm too early, I don't have that kind of business. And I say it doesn't matter to all of that.
Because we can start from the very beginning. Even a podcast is something that could be sold. People think, I'm the name, I'm the face, I'm the host, all of these things. Yes, and you could still transition it, right? So what does it mean to step back?
It means to allow our identity and our worthiness to not be completely defined by our output and our productivity and what we have traditionally deemed as success.
Success is something that we need to be identifying and defining for ourselves, independent of what the business is doing on paper, what our day-to-day looks like, how stacked our calendar is. And so pulling yourself out of that and exiting it, whether that is day-to-day operations or full ship and send and you know, sell to someone else, it looks different for everybody, but for most of the time, it's women saying.
I don't have to be defined by this anymore.
Yvonne Heimann [00:05:00]
And I think that was the moment where I got the whole hot ice when you were talking about it, because we often, when we hear exit, it's like, cool, we are selling the company. And that's not necessarily what it is. You can still sell and stay with partial percentages and get some get a little cut off every profit. Exit can mean you are just stepping away and you are not doing all the things 24/7 and just work in that, 24/7 job that you suddenly generated. Exit can be whatever it means and just stepping back and having a self-sufficient business. Now, I'm curious, as we already mentioned, you built for 12 years and sold for multiple seven figures. At what point of those 12 years did you start building for the exit?
Alisha Pennington [00:05:50]
A lot of yeah a lot of people wonder you know am i supposed to start with the end in mind and i don't know that that's entirely true but i think the idea of building for optionality and kind of like what you just said whenever life comes at us the way that we know that life does for us to have the option to step back, to hire an operator to sell if we need to. That is what we should be building for and towards. So the answer to your question, when did I start thinking about it? Well, I was probably eight or nine years into it. So this would have been, I started the company in 2012. And after COVID, so probably around 2022, I recognized that the market that I was in had shifted tremendously. The clients I had, the conversations I was having with those clients, it was looking very different than it did pre-COVID. And so that was the first time when I started to think, I don't know if I have it in me to apply myself as the leader, as the founder, as the CEO to what would be needed to take this to the next level. Can I sustain it? Probably. Do I have a pretty decent thing going here? Yeah. But the truth is simultaneously.
My identity had shifted completely within that eight to nine years. I came out of college as a sports medicine practitioner and clinician. It was a sports medicine staffing company that I had started. And in the first four to five years, I had so much success with building and growing and operating the staffing company that it didn't even make sense for me to be a practitioner and clinician anymore. So the thing I went to school with, to school for, I wasn't even doing.
That was already an identity shift. In being the business owner, I had great opportunity to speak and to share my success stories and to share my learnings and my teachings with other people. So I gradually started shifting into a consultant as well and a speaker and you know, a different type of identity. And so there was kind of these parallel tracks happening where the business was stalling out a little bit.
Alisha Pennington [00:08:22]
And simultaneously, I had outgrown it. I was no longer a clinician. I, yes, was still a staffing company owner, but I didn't identify as staffing company industry. I really wanted to be in the consulting side of it, the coaching side of it. I wanted to work in the more general population. And so I had made that decision for myself that probably the best thing to do for me, just Alisha at the time, would be to sell the business.
I then start looking at the other factors associated with that. There's financial, there's employees, there's, you know, other implications associated with it. And all of them kind of started checking out that, you know, because you're going to start stalling, now is a good time to have this conversation because it's probably going to take a solid two years for this transaction to go through. And so I started those conversations, and at no point did I feel like no, no, no, never mind. I just want to hold it. You know, if anything, while I was having those conversations, I was energized and invigorated. And it was a version of me that I hadn't experienced, but also headed in a direction of something that I never knew was possible. And I kept following that intuition and that feeling of this is where I want to be, this is who I want, this is who I want to be, this is what I want to be doing. And continuing to follow that, that alignment that I felt was just continued further confirmation that this was the right decision.
Yvonne Heimann [00:10:00]
And I think, as I mentioned, we we met, I don't think I mentioned it specifically, we met at Founder's Table in Scottsdale. So there were a couple of conversations going on when you spoke there and it came up on exiting. We had one fellow female leader on the table too who had just closed down business because it just wasn't the right thing anymore. And there is so many areas where my brain goes to
It's working. There is an asset. Why not selling it? As well as the side of things of my God, it's my baby. We are connected to it. It's it's kind of like helicopter mom, right? Where I don't want to let it go. It's all me. And there is so many aspects of it. So it's just interesting how much we connect and identify through our business. So I can completely see you being in the, you know what, I'm done with this. I've talked this through. And rather than just shutting it down, it's a full-on asset. Yeah, let's let's make some money with this. Let's you've put a whole bunch of of blood, sweat, and tears into this. There's a huge value in this.
Alisha Pennington [00:11:15]
Well, if I can share a little bit, if I can expand on what you're saying there. first of all, I think that the talk track around like this is our baby is one of the problematic ways that culturally as women we keep ourselves in it longer than we need to, because men do not talk about their businesses as babies. They talk about them as the assets that they are. And part of my intention and effort with the brand that I have now exet is normalizing the culture and conversation of women exiting their businesses. And one of the ways that we do that is to change how we talk about it. They're not your baby. Okay. Like you can feel like they are, but they're not. They are an asset, like you just said. And they are something that you have dedicated time and energy and resources and a number of other things too.
It probably has a brand associated with it. It has all of these things that have value. And to just simply walk away from that and put it in the trash because you're done with it, or because it has finished serving your season of life, which is perfectly permissible and exactly what we want to normalize, you can create something and put it out in the world and not have to keep it and nurture it forever and ever.
But just because it's done with you in your season of life or you've taken it as far as you know how to, doesn't mean that it doesn't have value. And that is the conversation that we do have to change with women because that's what we believe. We think that it's selfish to sell it. We think that we've failed if we sell it. We we think that it says something about us.
And not to compare us to men, but just to use it like culturally and socially, that that is not at all how they define this. And we have the opportunity to redefine what selling something that we created means to us. Why don't we see it as a success metric? Why don't we see it as an opportunity for another woman to stand on the shoulders of what we created? Why do we choose not to adopt that?
Yvonne Heimann [00:13:35]
And that's, this is why I love having you on the podcast because you came right around to the point that I lost. One of the things you mentioned when you were speaking is the whole exit conversation is completely different with men. Where it's like, yeah, you know what? I don't want to do this anymore. And one of their guys says, Yeah, cool, I'm taking it over. And it's not even a question. And often enough, we get put into a position of, but you did all of that. Why would you give it away? Why? I'm like, are you?
Really people?
Alisha Pennington [00:14:06]
We're so much more sentimental about it. And why?
Yvonne Heimann [00:14:08]
Let it fly. And it's I often come back, I'm like, not a mom, don't have children. I just get to be the crazy auntie of spoil them rotten, sugar them up, and send them back home. I'm the one. I'm the one. I will also buy the drum set for the birthday, just because you can you cannot get it back at me. Well, squeaky toy with the dog, maybe. but it's like it's I often use that comparison, right? Because I have seen friends of mine that have raised their children in a way that they are self-sustainable. And yes, don't get me wrong, I'm not taking anything away from sending kids to college. No matter how you raised your children, it's a huge change. It's a huge adjustment. I'm not saying it's easy. And also there's also the helicopter moms that, pardon me again, I'm not a mom, I'm trying not to judge, but that I'm watching for a year having an identity crisis and a meltdown because they are so connected to it. And I'm like, you raise them well, you raise them to stand on their own. And I make I I draw the complete connections between how people, some people raise their children as well as we quote, "raised our business".
Alisha Pennington [00:15:27]
Well, and in both of those scenarios, it's a choice. And I think that that's what we have to remember. Sometimes it feels like for women, they don't realize that they have the choice of selling their business. There's a story that they've told themselves about what it means to sell a business. Either their business isn't valuable enough that nobody would want to buy it. Well, I just make candles out of my living room and I sell them for $20,000 a year.
It's still valuable. You've still figured out a formula. You've still got a customer base. You've still got an email list. I mean, do you realize that you can sell email lists? I mean, so there's stories that we tell ourselves about what is valuable, how people are gonna perceive us.
Right. And that is what keeps us and prevents us from having a potential liquidation moment in our lives. And it doesn't have to be massive and massive amounts of money. It doesn't have be Alice and Ellsworth of Poppy selling for two billion dollars. $20,000 can change someone's life. Yes, yes. And so why do we think it's too insignificant?
Why do we think, why are we telling ourselves that it's not valuable enough? We just have to stop and reminding ourselves that it's a choice. It's a choice how we raise our kids. It's a choice how we respond when they leave the house. It is a choice what we do with our businesses. And you have the choice of selling it. And at minimum, consider it.
Consider what that could look like. And I'm not saying you need to go in some business marketplace and get a broker, and it doesn't have to be more than what you make it.
Yvonne Heimann [00:17:14]
Even and I I was I was talking with a friend of mine just just networking and she's like, you know what? I have built this community. I don't want to be the one constantly running it and doing it. And guess what? She's looking within her community, within her leadership group, for somebody to to match it. It's like just look around.
When I started my business way longer ago than I would like to to admit, and in all its stages it has been, if I could just buy past the beginning stages and past the initial lessons and lessons paid for, there's a value right there.
Alisha Pennington [00:18:02]
Consultant, I saw this all the time. You know, it takes a real, it takes a solid year to really get, I think, to figure out product market fit. You're you're taking a solid 12 months just to figure out product market fit. After that, assuming that you found it, you probably need another solid year to have any type of traction. Like momentum is one thing you can keep pushing something forward with momentum, but actual traction where there's recurring customers and people that are coming back and all of this, those two years are the most expensive ones. And so if someone has figured that out, and I don't care if you only make candles and sell it at your local farm, your local farmer's market.
Somebody else would have to start from scratch to do that. If it's a jewelry line, if it's an idea, if it's it doesn't matter what it is, there is nothing that is too insignificant from that perspective. That if you have found product market fit and you have some traction with some audience, it does not matter how small it is, and the next person believes and has the resources to then grow that.
Why wouldn't you give it to them? Why wouldn't you sell that? You've done the work. It's valuable.
Yvonne Heimann [00:19:18]
You know, somebody can just skip the line. It's like the VIP access to be in front of the row and everybody else is just gonna gotta buy their time. Now and
Alisha Pennington [00:19:30]
Well, right. And I was just saying, and simultaneously being able to buy something like that is incredibly valuable. And I think that as women, we think either it's selfish for us to want to sell this or we diminish the value of it because we don't want to take it any further or it you know we're at a a point in our lives where we don't want to do it anymore and we then associate that with what the next person would be able to do and that's why we don't think that's why we don't think to sell it but none of that is true. Again it is a story that you're telling yourself.
Yvonne Heimann [00:20:00]
The conversations we have about exiting, right? So you are in your earnout right now, and most people talk about exit like that finishing line. I think we have already done a great job through the podcast of the exit might not be the finishing line. Your finishing line might look different. And I'm curious, you chose the exit you chose to sell the business and i i want to talk about is it really that finishing line or what is the reality of living that exit.
Alisha Pennington [00:20:38]
Yeah, a really great question. And I think it's another misconception that we think we sell and then then we the next day we wake up and we have a we live in a completely you know alternate universe that looks nothing like the one we have today. And the truth is that most sales and acquisitions don't happen in that capacity at all. It is very common, at minimum for the CEO, the founder, whoever it is, to stay on for let's just say six months or like an operation handoff period. So at minimum, you're gonna have a handoff period. At maximum, well, then the next version of it is an earnout, which is a predetermined set of time. It's usually one to three years that you stay on, you're still functioning in your same capacity.
And you're continuing to ramp up. There's performance metrics and KPIs that have to be met that ramp up typically, at least maintain, but ideally ramp up the performance of what the business is. And the acquiring company is always interested in something like this because it reduces the risk of what they're purchasing.
The biggest concern around a purchase is, well, I'm going to take it from your hand and place it in mine. People aren't wanting to do business with me. There's going to be change costs, you know, all of these things. And they want to hedge against that as much as possible. So if you agree to stay on and say, I'll be with you for two or three years and make sure that all of the clients get transitioned over, we can gradually work me out of the marketing and things like that.
Alisha Pennington [00:22:15]
That's going to make your handoff much smoother. And you should expect to have to work one to three more years in your same capacity. And then on the furthest end of it is what's called an aqua hire, which are also very common. They're acquiring you and they're hiring you at the same time. So you're going to get absorbed into probably a larger portfolio company. You're going to get get to continue to maintain at your capacity for as long as you want, the most like popular version of this one was Bobby Brown when she got acquired by I think it was L'Oreal.
She stayed the face of it and the CEO of it for 25 years. So that is another version. And I bring up that one a lot with people who are fundraising and trying to get investment. If you're selling off a portion of your business anyway, why don't you look into an Aqua Hire situation? Because then a lot of the risk, a lot of the continued resources that you're gonna need in order to grow become their responsibility. And you don't just keep selling off.
Portions and portions of your business for a few dollars each time, you're actually getting infrastructure that supports you in your growth and scalability. And so yeah, I think that again, like there's like a disillusioned idea about what this looks like. And it doesn't necessarily have to be, it can look however you want it to be as the person who's selling it.
Yvonne Heimann [00:23:43]
And it's like it all starts again with with the conversation, with the communication, with having these talks of being okay, of I don't want to do this anymore. I don't have to do this. Sweet. What do you want to do with it? Do you want to completely hand it off? Do you just don't want to do the run the business anymore and you wanna have somebody else run the business and you just stay the face? There's so many different variations of what that can look like.
I'm like, we have seen so many people sell their business and stay on in a profit revenue share kind of setup. It's like you can literally make it what you wanted. If there is su there is going to be somebody interested in it. As you said, no matter how small or big, I would have loved to skip the damn line of the first three years of my business. Let's be honest. Which and it's it's I think that's why I also gravitated so heavily to you because I started my business out in the middle of taking care of my husband and literally having to stop my business because I was a cancer caretaker and didn't have any time to take care of my business. That's why I'm so invested in even if you don't want to sell your business, even if you don't want to do anything, whatever that looks like.
The business needs to be able to run without you. And even just having the conversation and having the planning to quote "potentially exit", it has such an impact on how you look at your business. And I think I mentioned it at the table. To me, what you teach is what 10X did to me for processes in my business.
Yvonne Heimann [00:25:22]
It puts such a core focus on what's broken in your business and what's too reliant on you to have something that you can call a business. Because I'm sorry, if you are 100% the business, you have a 24-7 job. That thing needs to be able to run without you. not that I'm passionate about this at all. Now.
We we here at the podcast believe, and I'm I'm a strong fighter for this. We can learn a lot, we can listen to a lot, and there's professional learners out there. So at the end of my podcast, we always ask for a specific action step. And I wanted to ask you for any woman listening right now that is into their business, how long ever.
And they feel like, okay, this is hitting. I know what you guys are talking about. I hear you. And chances are they might have never seriously thought about an exit. They might still not, but they get the they get the idea of why it's so important to have these conversations. And what would you tell her is the one thing she should do this week to start building differently?
Alisha Pennington [00:26:44]
Am I allowed to say join my community? Because here's what I think. How we think about things is how we act about things. And the only way to change our thinking is to continuously interrupt the previous thought patterns so that we can then change the behavioral and the habits, right? And as
As much as I love that someone might listen to this and feel inspired, quite frankly, this single conversation will not be enough. Maybe we're planting the seed. I would love to be able to water it. And every single week we meet on Wednesdays, 10 a.m. Pacific, 1 p.m. Eastern. It's a completely free community. And we're talking about the psychological, the emotional, the cultural.
Components that are keeping us in our business, sometimes operational. And we're discussing what that looks like. And it runs the damn it, right? There, this last week we had a woman who's about to sell her multi-eight-figure law firm. We had another gal who's purchasing a studio and hopes to make her first six-figure year. And every single version of it has identity and worthiness and value and questions around.
Who are we without this wrapped up in it? And we all come as vulnerably as we want to.
Sometimes you're just a fly on the wall and you're listening to it. But if we actually want to impact and for me, normalize the culture and conversation of women exiting their business, sometimes it includes us, but sometimes we need to listen so that we have that wisdom for the next woman. And so that we're not saying to her, "but it's your baby" when she says she doesn't want to run it anymore. Sometimes that's the training that you need, not to sell your business, but to support your friend that wants to sell her.
Yvonne Heimann [00:28:40]
And it's it's changing those habits. It's the same as getting into the rooms, it's surrounding yourself with the people that have done it to see and do what you might not know. There is this difference of what we don't know, right? We don't know what we don't know. You need to be in rooms, you need to be in the conversations that have these conversations that show you.
Where the issues potentially are and what's happening. And that's exactly what's happening there. That's why I'm like, yes, please invite them because again, you can listen, you can do all of the things, but it needs to be integrated, it needs to be implemented. The voices in our head need to be changed and we need to adapt, right? And we only do that by continuous practice, which is.
Having those conversations, even if you're just a fly on the wall listening in and doing the thing. So only, as I mentioned before, only 1.37% of businesses that sell are a majority stake of female founded. That number should bother all of us. And now you know what's really behind that number. It's not even just stepping into the rooms, it's us stepping stopping ourselves from stepping into the rooms.
Because of all the stupid voices we have in our head. The exit doesn't start with a buyer. It starts with you knowing who you are when the business is no longer the answer to that question. And if that hits you somewhere real, send it to one woman in your life who's been building for years and hasn't thought about this yet. She needs to hear it. And I'll see you in the next episode. Alisha, thank you so much for joining me.
Alisha Pennington [00:30:35]
Yeah, this was wonderful, thank you so much Yvi.