Savannah from Baltimore has owned her day spa for 18 years. She’s seen the highs and lows of running a small business, including almost closing her doors during the COVID-19 pandemic. But today, she’s in what many would call a dream scenario.
She Makes Seven Figures And Barely Works
With 30 employees and a loyal clientele, her spa is on track to generate $2.5 million to $2.6 million in revenue this year. After expenses and addbacks, she clears about $800,000 in profit. And here’s the kicker: “I work probably honestly four to six hours a week,” she said on Dave Ramsey‘s recent “EntreLeadership” podcast.
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Savannah credits her strong, well-trained team for allowing her to step back from the day-to-day. “I’m making money finally. It’s not that I’m not doing anything, but… it’s just the entrepreneur’s dream.”
That success made her consider selling. She brought on a mergers and acquisitions firm to explore her options. “I started going down the rabbit hole looking for when is the right time to sell my business because we are on top now, right? I don’t want a fire sale,” she said.
Her concern? She might never get top dollar again if she waits. Offers she’s seen value the business at around three times earnings. That math didn’t sit right with her. “Why would I sell my business for 3x when in three years I can make that much money and then sell my business in three years?”
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Ramsey pushed back at her urge to sell the business at all. “Let’s fast forward a year and a half. You’re putting a million dollars a year in your pocket. Why would you sell it?” he asked.
“So when does someone like me get out?” Savannah asked before answering it herself, “Maybe never.”
Ramsey told her there’s no rule saying she has to exit just because the business is doing well. “There is no universal wisdom that says you got to get out just because you’re on top,” he said.
He also questioned whether a multi-million dollar check would bring her the same satisfaction. “If somebody writes you a $5 million check, I’m not sure it would give you the joy you think it’s going to.”
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Savannah agreed. “It was not fun for many years. I wanted to quit so much. It was awful, but I’m past that.”
She added that thanks to her husband’s job and another company she owns, she can put away almost all of her spa profit after taxes. “You start banking three-quarters of a million or $600,000 a year… that’s pretty cool,” Ramsey said. “I’m proud of you. Well done.”
As for when she might sell? Ramsey gave it to her straight: “If I’m in your shoes, unless I got $5 million, I’m not even looking at it because you don’t have any need to walk away.”
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