Limitless author Laura Gassner Otting wanted out of her business, and she wanted to get what she was worth.

But because she only wanted to sell to a certain buyer, she had to be creative in how she priced the enterprise to get what she really wanted.

The exit strategy

Laura: I ran the firm the entire 15 years, not for maximum profitability, I needed to make enough money, right? How do you pay your mortgage as table stakes for everybody and there's something between the need to make number, the how do you pay your bills, and the want to make number which is the do you drive a Hyundai or do you drive a Maserati? Do you stay in the Holiday Inn or the Four Seasons? There's a lot of space in between those two numbers, so I ran it for enough money, not maximum profitability, but for maximum legacy, for maximum flexibility, for maximum impact

“ I wanted to change the world, I wanted to make it a better place but I also wanted to be present for my family and community activity and other things that I was doing, that was how I ran the company. ”

And when it came time to sell the company, we had the company valued by an external source, and then the hard negotiation started which is when I got kind of stuck because my self worth became dictated by the number in that valuation document and whether or not the people who helped me build the company thought it was actually worth it and that I should get to leave with that pot of money.

Or maybe they could shut the entire thing down and start it again without me and be just fine, right?

It's very difficult to sell a professional services firm when the leader leaves because there's this question of is the value of the firm with the leader? Is the Rolodex with the leader? Was the firm synonymous with me? And I felt very confident that in fact it wasn't and that they'd be just fine without me. They were not so sure and they were confident in their work and they were confident in their reach but you just never know and that's a pretty big bag to be left holding if all of a sudden I walk out the door and the clients follow me, even though I wasn't still doing the same kind of work.

“ I spent a lot of time with my ego in a bunch thinking about I’m worth this money”

That's what the outside advisor says and we should do it and then my husband turned to me one day and he said, 'You never ran it for maximum profitability. You ran it to make an impact in the world, to have flexibility in your personal life, to create an institution rather than a cathedral,' and he helped me understand that that was the difference between the need and the want. That everything I've ever created as a serial entrepreneur has still existed to this day, 25 years later, and I'm really proud of that. That money was only one meaningful way to look at value and he really helped me understand that I could sell it for enough money, which would give me the kind of life I wanted to build and the kind of legacy I wanted to leave. P.S. the firm has done so well and probably, in small part because I didn't handicap it with this giant financial burden, that they've actually done better than the projections would have said.

So I ended up selling the firm to them for $1, selling the firm outright, $1, 100 percent of the shares and a percentage of revenue for the following five years which was as far as we've all agreed, I can put my fingertips on any possible success. And that percentage of revenue will in fact, it's on pace four years into the five years, to outpace the number that the valuation gave.

I think the lesson for this is to really think about how you think about value and are you thinking about money

But here's the thing, I bet on them for the previous 15 years because I employed them and partnered with them to serve clients on my behalf with my name on the door. So I'd already been betting on them. It was a pretty safe bet.

And you also gave them a big boost by not saddling them with the cost of buying you out in advance because they didn't have to either pull money out of the resources of the current company or be hampered by debt payments.

And I took a risk on them, they took a risk on me, we were very clear in the writing up of the exit strategy that if I'm out there and I'm bad mouth or if I'm supporting other search firms or I'm doing things that will get in the way of their success, then the agreement is null and void. But I think a lot of this worked because we had invested in each other in the previous 15 years. We had gotten to know each other, we believed in each other and we defined success in the same way. Not as maximizing payment at every single moment but in terms of maximizing impact.

Laura’s Money tip

I think we spend a lot of times when big things happen in the world, sending teddy bears. We send thousands of teddy bears every time there's a natural disaster and the truth is that most of those teddy bears get incinerated. And the money that we could be spending to ship and store and distribute and yet incinerate those teddy bears, we could actually be spending on other things like long term change. And I think that we can apply that to our own lives. We all go to parties, we all go to events, we all have things happen in our lives and we bring along gifts and a lot of times those gifts are just stuff. So I want us to be more thoughtful about the money that we're spending on all of these gifts, that for the most part just make us feel better. Either our egos or our grandmother looking over our shoulder telling us that we have to be polite and not show up empty handed and think about what really would matter to the person who you are in service of.

And be smarter about our money that way.

Bobbi: Can you give me a personal example? Of a gift you've bought for somebody that you really think was on target?

Laura: Oh boy. A lot of those times they tend to be experiences, spending money on doing things together rather than just giving them another thing. It will be spending money on tickets to an event that I know a star that somebody loves and bringing them along with me and sharing time with them personally. I think time is so much more valuable to other people, that's my love language, is spending time with people and really connecting and being present with them. So I think doing things where we can spend experiences together rather than just spending money together, is a great way to spend money smarter.

About Laura’s book Limitless: How to Ignore Everybody, Carve Your Own Path and Live Your Best Life

Laura: When people try to ask me how do you find your passion? People always say, 'You should do work that matters and you'll never have to work a day in your life,' and I actually love work. I know you love your work, any of your listeners know that you love what you do because you can hear it in your voice and you have passion for it and so how do you find your passion? You think about the things that you spend your attention on. So what are the things that you do that nobody pays you to do? What are the things that you do outside of work? Or what are the things that you do at work that are not actually specifically in your job description? That's really where you like to spend your time and the more time that you spend leaning into the person that you are in those times, that's really how you get to do work that you love.


Bobbi: Another theme that is in the book that really resonated is you talk about the metrics we use to measure ourselves and using the wrong scorecard.

Laura: At some point in high school or in college, we were told to pick a major, pick a trade, pick a path and we were handed a list of metrics of success by which we should value that path. And those metrics were things like the brand procedure of the company or the flexibility or the benefits or how many skills we will acquire or yes of course, money, there's a bunch of them that I talk about in the book and they're all given the same weight. And we're told if you make a big salary, if you marry the right person, if you live in the right house, if you drive the right car, you'll be quote unquote successful. And yet, we're all so busy chasing that and running on this treadmill and spending more money in order to do those things, spending money on things we don't love to impress people we don't like, that's not a place where we should be spending our time because what that does is it's forcing us to define success as it's given to us by everybody else around us.


And it's not until we figure out what success really means for us, that we actually will be happy when we find the success. So if you take the metric of money, you might be somebody who likes to go on beautiful cosmopolitan vacations and have breakfast in bed at the Four Seasons Hotel, right? That's going to cost a lot of money but not a lot of time. You might be somebody who likes to go camping and go out into the wilderness and wake up in the morning over a sunrise beautiful lake and make your breakfast on the camp fire. That's not going to cost you a lot of money but it's going to cost you a lot of time. So if you're taking this external definition and just saying, 'I have to keep going and have to keep getting more salary and more salary and more salary,' without thinking about what the money means to you, then all that quote unquote success is going to be meaningless unless it comes with the thing that you want, which actually might be more vacation time instead.

Bobbi’s Financial Grownup tips:

1. Saying goodbye should not be part of your exit strategy.

Exit gracefully, no take this job and shove it, obviously, but then work proactively, have a strategy to stay in touch and be remembered. And still be maybe part of the social network. Stay connected to colleagues from all stages of your life, that could even include school and, of course, jobs, conferences and so on. It's easier said than done but try as much as you can. First of all, it's obviously just nice, odds are you enjoy their company but it's also smart business. That former colleague you connect with once a year, may think of you for an interesting opportunity. So try to stay top of mine. This could even include being strategically active on social media.

2. Don’t send stuff just because

If you want to send something, if something tough has happened to somebody, maybe they lost a loved one, maybe they've suffered in some way, reconsider sending stuff just to send stuff and be aware that sometimes in this age where we don't want to have too much stuff, when you do send stuff, the recipients may feel obligated to keep it. So if you do want to send a thing, not everyone has time or wants to send experiences, maybe consider things that are splurge items that will be used up.

For example, a gift card. A gift card for a nice restaurant so that they can have a break from cooking or a credit to a babysitting agency for a guilt free night out. Or maybe they had a home damaged say by a flood or some natural disaster or something like that, maybe a gift card to a home goods retailer could be truly helpful. Something that they may not want to treat themselves to or they may be stretched to afford that alleviates a financial burden, that might be enjoyed and, of course, in many cases, guilt free because it came from you. Those kind of things can be really helpful.

Episode Links:

Blinkist - Summarizes books to just 15 minutes. In fact you can even listen to one minute chunks at a time. They are called these blinks. Try it out for FREE here.

Laura's website - www.LauraGassnerOtting.com

Laura’s book Limitless: How to Ignore Everybody, Carve Your Own Path and Live Your Best Life

Take Laura’s assessment quiz!

Follow Laura!

Instagram - @heylgo

Facebook - @heylgo

Twitter - @heylgo

LinkedIn - @heylgo

Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.

Shane Snow and his Contently Co-Founders had a booming business- that almost completely crashed after they found themselves strapped for cash and struggling to meet payroll. Plus the nutritional bang-for-the buck of popular diets, including the Keto diet and ramen noodles. 

 

In Shane’s money story you will learn:

-How he and his partners overlooked a key metric as they grew their business, Contently

-The importance of cash flow vs receivables

-The solution the company came up with that saved them, when they only had 2 weeks of cash left on hand

-How the experience impacted Shane’s personal financial plans and habits

In Shane’s money lesson you will learn:

-To pay attention to revenue, but also when it received as well as the net profit

-How to apply his business lessons to your personal financial life

In Shane’s every day money tip you will learn:

-Why Shane made a nutritional change for health and efficiency

-The financial benefits that came along with the experiment

In my take you will learn:

-Why reading at least a book a week is a habit of many successful people

-My advice on how to read a book a week, starting with Shane Snow’s “Dream Teams” 

-How removing every day decisions, like food and clothing choices, can free up your mind to be more focused on other things

Episode Links

Learn more about Shane Snow at shanesnow.com

Buy (and Review!)  Shane’s book “Dream Teams” 

Buy Shane’s book “Smart Cuts

Follow Shane!

Twitter: @shanesnow

LinkedIn ShanedSnow

Instagram: @ManEatingRobot

To win one of the promo video’s you see- be sure to share them on social media when you see them on my feeds!

Twitter @bobbirebell

Instagram @bobbirebell1

Facebook: Bobbi Rebell

Want to share your money story? Write to us and tell us about it at info@financialgrownup.com

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Transcription

Shane Snow:
We made this enormous mistake that almost killed the company a year or so into the business. We looked at our bank account and realized that we had two weeks of cash left.

Bobbi Rebell:
You're listening to Financial Grown Up, with me, Certified Financial Planner, Bobbi Rebell, author of How To Be a Financial Grownup. And you know what? Being a grown up is really hard, especially when it comes to money. But it's okay, we're going to get there together. I'm going to bring you one money story from a financial grownup, one lesson, and then my take on how you can make it your own. We got this.

Bobbi Rebell:
Close call for our guest but, spoiler alert, they did escape that near-death experience. The company, Contently. The voice you were hearing was co-founder, Shane Snow, who just released his latest book, Dream Teams. Before we get to more about Shane and the book, a quick welcome to our new listeners and welcome back to those who are returning. We try to keep our episodes to just around 15 minutes because we know you guys are so busy, but you can also, of course, binge if you're a commuter or you just have a little bit more time some days. The idea is that you invest the time and get an inspiring money story from a high achiever that gives you value and you also get an everyday money tip that you can put to work in your life or your work, right away.

Bobbi Rebell:
All right, you're going to get that here. Shane Snow is an entrepreneur, a journalist, an author, so much more. I wanted to have him on to talk about his most recent bestseller and that is, Dream Teams: Working Together Without Falling Apart. It's tough to get along, teams are hard. It's sometimes just easier to work alone and he talks a lot about that. Shane jokes that he hates business books, but this book is really more about people and stories and things that we can really integrate into our own lives. I learned a lot of things about history and the world that I thought I knew about, but there were nuances that people have never really shared publicly. And Shane is a master at research and revealing the full story when we didn't even know that we had part of the story. Here is Shane Snow.

Bobbi Rebell:
Hey, Shane Snow. You're a financial grownup, welcome to the podcast.

Shane Snow:
Thank you, I feel like a grownup.

Bobbi Rebell:
You're definitely a grownup, you have so many accomplishments. The latest one, and we're going to get to all of them later but the latest one is your new book, Dream Teams: Working Together Without Falling Apart. And you've had quite a week promoting it, lots of accolades. Congrats.

Shane Snow:
Thank you. Yeah, it's been a lot, a long journey.

Bobbi Rebell:
And it's basically of stories about how different teams work together, and often don't work together.

Shane Snow:
Yes, it's about that paradox. That normally group work is much, much harder than we think it's going to be, to the point that actually working by yourself is often more productive than group work. And yet sometimes we change the world when we work together.

Bobbi Rebell:
And one thing that changed the world is your company that you started eight years ago, part of team, you're a co-founder. Tell us about the company. And your money story has to do with what happened when you weren't really watching all the numbers, just some of the numbers.

Shane Snow:
Yeah. So the company started about eight years ago. The business model changed, it grew into something-

Bobbi Rebell:
And the name of the company is?

Shane Snow:
Contently.

Bobbi Rebell:
Mm-hmm (affirmative).

Shane Snow:
And it grew into a much bigger business than we thought it would, which is great. And initially the first piece of the business that we build was this marketplace for getting freelance journalists and photographers work and getting them paid. And a lot of the clients were brands, so it was this new branded content marketing thing. So Pepsi wants to hire some reporters to go cover a conference and write about it for their blog, that sort of thing.

Shane Snow:
So what happened, we started getting excited because the business was working. We're getting lots of work for these journalists and lots of clients, and we made this enormous mistake that almost killed the company a year or so into the business. We were looking at all the money that our clients were on the hook for paying us and realized that we had this runway for six months before we would need to raise money from investors again, or maybe figure out how to get profitable by then. So things were going great, but we then looked at our bank account and realized that we had two weeks of cash left. Nobody had been paying attention to cash flow. The fact that we actually pay these creative people who do the work for the clients and the clients take a long time to pay us, basically we were floating all of this money. And nobody had bothered to ... We didn't have a finance person, we were a start up.

Bobbi Rebell:
So basically there was a lag between the receivables and the cash that you were actually paying out.

Shane Snow:
Yes.

Bobbi Rebell:
You were basically acting like a bank.

Shane Snow:
Yeah. And the more successful we were, the worse it got. And so thank god someone checked and we were like, "Oh, no. We have two weeks left before we literally got out of business because of this problem." And so we founders cut our salaries so that we could put that toward payroll for our employees and we just sort of prayed for a miracle. And the miracle did come, but basically we asked our customers if they'd be willing to pay us upfront for what they excepted to be paying these freelancers. And basically everyone said yes and then we actually got a positive cash float, like a cash carry I guess?

Bobbi Rebell:
Yeah.

Shane Snow:
Where our cash flow was so good that we could grow the company even better. But that was just sort of this miracle. Also we-

Bobbi Rebell:
Well, you worked together as a team. You worked together as a team and figured it out, right?

Shane Snow:
Right. Yeah.

Bobbi Rebell:
And investors.

Shane Snow:
Yes, yeah. We asked the clients if they would do that and they all said yes and we got our investors to sort of float us for a few more weeks. But I learned this as sort of a personal lesson, that even through it's sort of obvious, that cash flow can kill you basically. And so I've started paying a lot more attention to my cash flow and my personal finances, as a result of this.

Bobbi Rebell:
So what is the lesson for our listeners, regarding your money story?

Shane Snow:
Pay attention to all of the numbers, not just the fun ones. The profit number and their income, that's the funnest number, but you really need to pay attention to-

Bobbi Rebell:
Well, it's really not profit, it was revenue was coming.

Shane Snow:
Right.

Bobbi Rebell:
The revenue.

Shane Snow:
[inaudible 00:06:20].

Bobbi Rebell:
Yes.

Shane Snow:
Right. The revenue number, exactly. But even in your personal finances I think, paying attention to just the salary number is not actually the one to pay attention to. And when you're getting money in and when you're paying money out is sometimes more important.

Bobbi Rebell:
I want to get to your everyday money tip because this is a really good one. I am personally very curious about this because I keep hearing about this and it's a little bit experimental. But let me let you tell it, go ahead.

Shane Snow:
Okay. So I really like doing personal experiments and gonzo journalism, so one time for GQ I ate only this "healthy", in quotes, ice cream for ten days and lost a bunch of weight. And anyways, so I like doing stuff like that. And there's this stuff called Soylent that came out maybe five, six years ago, that's basically like a meal replacement drink, kind of like the goop on the Matrix. It's not supposed to taste like really anything and it's supposed to have everything your body needs.

Bobbi Rebell:
Pure efficiency.

Shane Snow:
Exactly. And the guy who made it, I actually interviewed him about it years ago. The guy who made it, his reason for doing it was so that he wouldn't have to think about cooking or food. It sounds like the most boring thing ever, he was like, "I don't want to think about food, so I made this replacement food." It's interesting. But there's a version of it, I think a competitive company, called Ketolent, which is that, it's like a drink that instead of eating food you just drink this drink all day. And it's chocolate flavored, which is more delicious, but it also puts you in ketosis, which is like a low-carb basically, where your metabolism changes and it's very good for-

Bobbi Rebell:
Are you hungry?

Shane Snow:
No. So that's the thing is ketosis, it changes your metabolism. So that instead of burning basically sugar, it burns lipids, fat, and that's a much more stable energy source. The upside of this, so I started doing this for working out and it's good for blood sugar levels and all that, but the upside of drinking Ketolent instead of food is it's a lot cheaper than going to lunch every day. And you know, you need to take like-

Bobbi Rebell:
Do you eat it for every meal? Is it like a full on thing?

Shane Snow:
Yeah. I mix up two big bottles of it every day. Like on weekends, I'll go to brunch, you can't do it every day or you'd go out of your mind. But you eat it every day or-

Bobbi Rebell:
And how much does it cost?

Shane Snow:
It ends up being something like eight buck a day. If you want to do the pre-mixed ones, which is even more convenient, then it's a little bit more but it's still ... It actually reminds me, I had this friend, one of my best friends in the world, in college he was trying to micro-optimize calories for percent, or whatever, in his diet. And he figured out this optimum combination of oatmeal and rice and he was miserable but he saved so much money.

Bobbi Rebell:
People stereotype that people that want to save money, they eat only ramen noodles while they're paying down their debt. I wonder what the nutritional value per serving, per cost, is for ramen noodles versus this keto diet and all the other diets. That's just, I don't know, interesnting.

Shane Snow:
Yeah. Well, getting it right, because you don't want your brain to not function.

Bobbi Rebell:
Right.

Shane Snow:
I imagine that eating only ramen noodles is very bad also for your digestion I bet.

Bobbi Rebell:
All right, wait. Let's talk about your book.

Shane Snow:
Okay.

Bobbi Rebell:
Because I'm obsessed, I literally meant to just read enough to kind of get through the interview but I read the whole thing. I spent a little over four hours, you spent four years writing Dream Teams. One of my many favorite things about this is that it's almost like a suspense thriller because it told these stories where there's always these zingers at the end of each story.

Shane Snow:
Yeah. So I wanted to explore that paradox, that we say that two heads are better than one and, yeah, all of these things that you just said. And it turns out that research shows that's usually not true, and anyone that has worked in a group project at school knows that sometimes it's much easier to just do it on your own rather than in the group. And the bigger a team gets in business, the slower things get, the more communication is a pain, but there's all sorts of other psychology that basically says that group dynamics get in the way of productivity and progress. And so I wanted to explore that and kind of what does science and research tell us about our common conceptions about working together, so that we can actually fulfill that promise of becoming better than the sum of our parts.

Shane Snow:
So it's a non-fiction, science, and business book, essentially. But I hate business books and I-

Bobbi Rebell:
Well, I don't feel like this seems like a business book because you have everywhere from Wu-tang Clan ... Did I say that right?

Shane Snow:
Yeah, you did.

Bobbi Rebell:
The Russian hockey team, which, by the way, there's a zinger in there that I did not know. This whole miracle on ice with the US team.

Shane Snow:
Oh, yeah.

Bobbi Rebell:
I don't know if people knew what really happened on the Russian side but let's not spoil it for them, but you gotta read that one.

Shane Snow:
Okay.

Bobbi Rebell:
The Wright Brothers, the importance of play in being successful, and why a lot of mergers fail. And even you've got George Takei in there and how pop culture and people seeing things be normal changed our cultural expectations.

Shane Snow:
Well, thank you. What I wanted to do is talk about these things and the real research and the real science that can change our minds and, in some cases, blow our minds, about this. But I wanted to do it through stories that are fun, even if you don't care about the lessons. That for me, I wanted to write the kind of book that I would like to read, which would be more cinematic with surprises and twists and stories that I was excited enough to learn about that I would actually want to write about them too. So I'm glad that ... It is a nice compliment that you got through it so fast and enjoyed the stories.

Bobbi Rebell:
I think everyone will get through it so fast and then they can read your previous book, Smartcuts, so it's all good. So Shane, tell us where people can find out more about you and where they can follow you on social media, because I know your selective in your social media.

Shane Snow:
I'm pretty selective in my social media. So shanesnow.com has links to everything. And well, anyone that's listening to your podcast, I can give them my Instagram. It's not Shane Snow, it's maneatingrobot.

Bobbi Rebell:
Of course.

Shane Snow:
Yeah, of course. It's self-explanatory, I think.

Bobbi Rebell:
Of course.

Shane Snow:
I actually really like maneatingrobot because depending on the punctuation it's either a man eating a robot or it's a robot eating a man.

Bobbi Rebell:
Okay. I have to about about that.

Shane Snow:
Man, eating robot.

Bobbi Rebell:
Ah, ah. I'm a little slow on the uptake. All right, Shane. Thank you so much, this has been great.

Shane Snow:
Thank you for having me.

Bobbi Rebell:
And congratulations on the book and all your success.

Shane Snow:
I appreciate it.

Bobbi Rebell:
Wow, pretty rare to go from bad cash flow management at start ups to the financial versus nutritional value of keto diets and ramen noodles. Bu there you have it, the wonderful Shane Snow, so much fun.

Bobbi Rebell:
Financial Grownup tip number one. In Shane's book, Dream Teams, Shane has a lot of data. One of the data points that he talks about is statistics linking the fact that the most successful people in the world are also what I would call intentional readers, meaning they read at least a book a week and make a point of it. They really carve that time out of their day to make sure that they read because that's where they feel that they learn about the world and become interesting people. You're busy, I'm busy, we're all busy, but they're busy and they find time. I'm right there with you, I know it's hard, but try an experiment, maybe with Shane's book. I read it on my Kindle and it said, for example, that it would be over five hours, but because there were so many notes from Shane's research at the end it was really maybe four and a half, let's say.

Bobbi Rebell:
So this week, this is my challenge to you guys, pick up Dream Teams, you can do it with another book but Dream Teams was good. On your calendar, block 45 minutes either early morning or before bedtime, do it before you turn on the TV, before you reach for the phone and start going through social media, set it an alarm, book it as an appointment in whatever you use to book your appointments. By dedicating 45 minutes-ish, a night, for the week, you'll be done by the end of the week and you'll probably have some interesting takeaways from the book as well and feel like you really got value from that time, versus just mindlessly scrolling through your feeds on your social media. Maybe then go write a nice review for Shane, authors love reviews. I love reviews, you could write a review for the podcast too. But consider making it a habit to go through and read a book a week, once you do it, you might really enjoy it and it'll stick and it'll be a great thing adding to your life.

Bobbi Rebell:
Financial Grownup tip number two. Shane talked about how his keto-loving friend liked the idea of not having to think about what to eat, it just removed a decision. So removing decisions that are discretionary is something that a lot of leaders do. Consider that, maybe have the same breakfast every day, or buy all the same socks. Whatever it is that removes a decision, that removes having to do that one more thing each day. My son's school, for example, next year has uniforms, so that's going to be a new thing for us. He's pretty good in the mornings anyway, but it's going to be interesting to see how removing the decision of what to wear in the morning impacts his morning routine and, in turn, impacts my morning routine.

Bobbi Rebell:
On that note, we hope that you are making Financial Grownup part of your routine. If you like the promo videos that you see on social media, share them, you may even win one for your company or yourself. And just tell a friend if you like the show, and let them know so we can grow our community. If you want to be a guest, you have a great money story or money tip you want to share, tell us by emailing at info@gfinancialgrownup.com, that's info@financialgrownup.com, and you may be a guest on the show. Follow us on Twitter @bobbirebell, on Instagram @bobbirebell1, and on Facebook I am @bobbirebell.

Bobbi Rebell:
Shane Snow has come a long way from his cash flow crunch, so thank you Shane for helping us all get one step closer to being financial grownups.

Bobbi Rebell:
Financial Grownup, with Bobbi Rebell, is edited and produced by Steve Stewart and is a BRK Media Production.

Trade Bodge and her partners set out to build a business- that they knew was challenging before they even started. But they focused on funding, building a strong foundation, and learning from the past mistakes. 

 

In Trae’s money story you will learn:

-The market opportunity Trae and her partners saw when they created ThreeCustom.com

-The challenges the new business faced, including the difficulty of scaling up

-The creative way they funded the business

-Why Trae left the business

In Trae’s lesson you will learn:

-The challenge in finding the balance between waiting until a business is “ready” and moving forward while there is the most excitement

-Why she believes entrepreneurs should pay as much attention to how time their launch, as how they spend their funds

-Specific ways to research markets ahead of time, and during the early stages of a business launch including trade shows and how to get competitor insights. 

-How to use time to your advantage

In Trae’s money tip you will learn

-Where to find money, that is already yours, to fund your startup

-How they each saved $25,000 to put towards their business

-How to avoid feeling deprived when saving for a goal

In my take you will learn:

-The realities of start-up life

-What to do when you just aren’t that into your startup

-Tips to make sure you remain financially solvent even as an entrepreneur with a startup

 

Episode Links

Threecustom.com on Twitter: https://twitter.com/ThreeCustom

Traebodge.com

Follow Trae!

• Twitter https://twitter.com/truetrae

• Instagram https://www.instagram.com/traebodge/

• Facebook https://www.facebook.com/Truetrae/

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Transcription

Trae Bodge:
We had the best intentions. We wanted to get out there and start this business. We found out that customization is very difficult to scale, and so any business who has attempted to do bespoke or customized products can attest to this. It's very, very difficult to grow a business like that.

Bobbi Rebell:
You're listening to Financial Grownup with me, certified financial planner, Bobbi Rebell, author of How to Be a Financial Grownup, but you know what? Being a grownup is really hard, especially when it comes to money. But it's okay. We're going to get there together. I'm going to bring you one money story from a financial grownup, one lesson, and then my take on how you can make it your own. We got this.

Bobbi Rebell:
Hey, everyone. This is an episode about starting something really big, being all-in, and then finding out maybe it's not for you and having the strength to, well, exit gracefully. My guest and her partners were off to the races with what seemed like a genius idea: blend customer colors to replace makeup products that were no longer available. But, while the business is still chugging along, Trae Bodge left and is now a smart shopping expert that you can see all over the media and with her column in Women's Day. Here is Trae Bodge.

Bobbi Rebell:
Trae Bodge, smart shopping expert, you are a financial grownup. Welcome.

Trae Bodge:
Thanks so much for having me.

Bobbi Rebell:
Congratulations, by the way, are in order for your new Women's Day column.

Trae Bodge:
Oh, thank you so much. I'm really excited to be partnering with Women's Day as their financial expert. I'm covering everything from best buys month-to-month, how to maximize your tax return, how to save on your Amazon purchases, all sorts of things that savvy shoppers need to know.

Bobbi Rebell:
Awesome. We will definitely put a link to it in the show notes. I'm excited to hear your money story because, first of all, it has to do with the beauty business, it has to do with being entrepreneur, and it has to do with how much money do you really need to start a business? Do tell.

Trae Bodge:
Many years ago, two friends and I thought that we wanted to start a beauty business that specialized in the reproduction of discontinued colors. This is something that one of my partners and I had done for another brand that came on to the scene, blew up really quickly, and then fizzled out really quickly. Because, we found out, is that customization is very difficult to scale, and so any business who has attempted to do bespoke or customized products can attest to this. It's very, very difficult to grow a business like that.

Trae Bodge:
But we had the best intentions. We wanted to get out there and start this business and custom-blend products for women, and men, of course, and makeup artists. We started, for the first couple of years, creating our plan, saving our tax returns, saving our bonuses very-

Bobbi Rebell:
Saving the refunds from the tax returns.

Trae Bodge:
Yes, yes. Saving our tax refunds, and planning along the way. What this business was about was really about answering a problem that many women had, which was when you have a favorite product, like your favorite eye shadow or your favorite lipstick, and then that product is continued, we set out to reproduce those products as close as we could to the original color and texture. Then we kept that formulation on file so you can reorder it any time. Now, I [crosstalk 00:03:33]-

Bobbi Rebell:
I love that.

Trae Bodge:
It's such a helpful process for so many people because you finally find that thing that works, and then suddenly, you can't get it anymore. Forgive me, I do sometimes speak about it in the past tense because I'm no longer with the business. The business is still alive and well. You can find it at threecustom.com. My two partners are still running the business, but about four years ago, I decided that I needed to move on and do new things, which is where I landed as a smart shopping expert.

Bobbi Rebell:
Tell me, what is the lesson from that story? What is the takeaway?

Trae Bodge:
For me, and in terms of being a financial grownup, when we set out to start our business, there's this excitement and energy about getting the business out there right away. My recommendation to all potential entrepreneurs out there is I know you want to get out there and you want to get out there now; however, the time that it takes to save the money or to crowd-fund, for instance, if you're going to do Kickstarter or Indiegogo, or if you're going to look for venture capital or money from family and friends, the time that it takes to gather that money is time that works for you. You need the time to do your market research, to attend trade shows, to interview people and really flush out what you want this business to be because there are so many brands out there. How are you going to differentiate and set yourselves apart from the competition?

Trae Bodge:
For me, I would say to people, just take your time. Don't get frustrated by how long it takes to start a business, and use that time to your advantage.

Bobbi Rebell:
Give us a money tip, something tangible that people can literally do today.

Trae Bodge:
This is a tip that I think can apply to many things, whether it's going to be starting a business or paying off your student loans or any other debt is to take money that may feel like a windfall, and rather than spending it and going on a luxurious trip or buying a fancy handbag or even doing a renovation in your apartment, save that money. Save that money towards your business.

Trae Bodge:
What my partners and I did over the course of about two years is every tax refund we got, every bonus that we received, and then any extra money from if we inherited a little bit of money or anything extra like that, we did not take that money for ourselves. We put it in the bank. The three of us each saved over two years. We were in our early 20s at the time. We each saved $25,000. For the three of us, we were able to start our business with $75,000 after couple of years.

Trae Bodge:
That would be my money tip is that money that feels like something extra, instead of going to town with it and spending it, put it away towards your goal.

Bobbi Rebell:
But it's hard because you feel like it's found money.

Trae Bodge:
Yeah. It does. It is hard. It almost feels like you're on a diet. It's like you have that diet and you have the rules in front of you and everything you're supposed to eat and not eat, and you really, really, really want to eat that thing that you're not supposed to eat. To me, it's the similar feeling. You see that money, cross your hands, and you so want to go out and enjoy it and treat yourself because especially with, say, a bonus from work, it's like that's being given to you as a congratulations for work well done, and you want to enjoy that, but instead, put that away. You'll save money so much faster than you think you can.

Bobbi Rebell:
Trae Bodge, thank you so much. Wonderful story. Wonderful advice. We will all be checking out your column in Women's Day and visiting your website, which is traebodge.com, right?

Trae Bodge:
Yes, it's traebodge.com or truetrae.com, and definitely follow me on social. I'm truetrae or traebodge. I hope to see you all there as well.

Bobbi Rebell:
Wonderful. Thank you.

Trae Bodge:
Thank you.

Bobbi Rebell:
I loved Trae's story because it highlights the gray areas of startup life. Sometimes, a business is solid, but maybe not the future that you want. It's not a bad thing. It's just not your thing. Financial grownup tip number one: Leaving something that isn't right for you is like leaving a relationship with someone that you are just not that into. You could stay. It will probably be okay, but by staying with something that isn't for you, you're also not finding the business or career that is right for you. It's the missed opportunity cost. Don't get caught up in sticking something for fear people judging you or an idea that you are not a quitter. It's not about the exit. It's about what you find behind the door that you open as you leave.

Bobbi Rebell:
Financial grownup tip number two: As Trae says, whenever you start something new, don't rush in. Take the right amount of time to build yourself enough runway that you can be intentional when you do ramp up. You don't want to be scrambling for cash to fill an order. Be purposeful. Spend the time before you spend the money.

Bobbi Rebell:
Thank you all for your support. If you have not already, hit that subscribe button so you won't miss any episodes, and be in touch on Twitter @bobbirebell, Instagram @bobbirebell1, and of course, visit my website bobbirebell.com and sign up for our mailing list so we can keep you posted on what's going on at the show, and of course, spread the word. Tell a friend. Thank you also to Forbes for naming Financial Grownup as one of five podcasts that are getting it right. That was really cool. I hope you all enjoyed this episode with smart shopping expert Trae Bodge and that we all got one step closer to being financial grownups.

Bobbi Rebell:
Financial Grownup with Bobbi Rebell is edited and produced by Steve Stewart and is a BRK Media production.

Even the best money experts can make money mistakes. For nine-time New York Times best-selling author David Bach, it happened in college.

It is not that surprising that he got buried in credit card debt. That happens to a lot of students who get tempted by the easy credit available. But after paying off his debt, David went back and did it again! 

Things get really interesting when he goes to his parents to ask for help.

In this episode you will hear

David Bach’s Financial Grownup money story including:

• How David Bach got into credit card debt- twice- before even starting his independent adult life

• The tactic the credit card companies used that led to even more debt

• How David’s parents reacted when he came clean about his debt

• The common mistakes college students make when it comes to credit cards

• How that debacle actually led to his beginnings as an entrepreneur as a sophomore in college. 

• What David’s first business was and how it helped him get out of debt

• How Bach learned to automate his savings and investing

• How he has used those early in life lessons to build his own wealth, and teach others as well

David’s Financial Grownup lesson including:

• How damaging credit card can be

• Ways to avoid credit card debt

• Why he has not carried credit card debt since age 21

• How he has avoided borrowing for 3 decades

David’s personal finance tip:

• Why automatic payments are great for investing, but not always for bill paying

• The first thing david cut from his budget in 2018.

• How to decide what to cut from your automatic payments

 

In my take you’ll hear my controversial advice on credit card debt including when to use:

• The avalanche method

• The snowball method

• How and when to use your home equity as a resource

• How and when you should consider opening up a zero interest credit card

 

Links to things mentioned in this episode:

David Bach

Smart Couples Finish Rich

AE Wealth Management

Even the best money experts can make money mistakes. For nine-time New York Times best-selling author David Bach, it happened in college. It is not that surprising that he got buried in credit card debt. Listen to the Financial Grownup podcast on ways to avoid credit card debt. #CreditCardDebt #FinancialGrownup #Money #Author