From Scaling to Selling: Leadership Lessons with Dr. David Pennington

 In this episode of Career Coaching Secrets, host Rexhen Doda sits down with Dr. David Pennington, a business scaling and exit strategist with over 35 years of leadership and organizational development experience. Dave shares how he helps small to mid-sized business owners unlock hidden value, prepare for smooth successions, and avoid the regret that often comes with poor exit planning. From building complementary dream teams to understanding business valuation metrics and navigating the “silver tsunami” of baby boomer ownership transitions, Dave explains how owners can scale, sell, or exit with maximum value—and peace of mind.



Connect with

LinkedIn: https://www.linkedin.com/in/david-pennington-phd-35042714/
Website: https://penncoaching.com/

Transcript

David Pennington 0:00

And, you know, what's nice about it, if you're the owner, you know, if let's say you're younger and you come in, you have a little bit, you know, you have a nest egg, but you don't have enough to buy the business out. I'm just saying, say it's worth a million dollars just for the sake of it. You don't have a million dollars you can lay down. All right. You go out and finance it. You know, sometimes that's not so easy, but if you can meet an owner who wants to sell it and the owner is willing to finance it, then what happens is you can, you can get it right away. The owner will benefit because he gets the sell. Plus he gets the interest. Welcome

Davis Nguyen 0:31

to Career Coaching Secrets, the podcast where we talk with successful career coaches on how they built their success and the hard lessons they learned along the way. My name is Davis Nguyen, and I'm the founder of Purple Circle, where we help career coaches scale their business to $100,000 years, $100,000 months, and even $100,000 weeks. Before Purple Circle, I've grown several seven and eight figure career coaching business myself, and I've been a consultant at two career coaching businesses that are doing over $100 million each. Whether you're an established coach or building your practice for the first time, you'll discover the secrets to elevate your coaching business.

Rexhen Doda 1:02

Hey everyone, welcome to another episode of Career Coaching Secrets Podcast. I'm your host, Regan, and today's guest is Dr. David Pennington, a business scaling and exit strategist who helps small to mid-sized business owners unlock the true value of their companies and prepare for a successful transition within five years without overwhelm or regret. With more than 35 years in leadership and organizational development, David has guided high revenue business leaders through growth, team building, and succession. Through his gain framework, he helps owners to generate freedom by reducing their workload, assemble a dream team to run the business, ignite growth through empowered leadership, and navigate to scale and sell at maximum value. It's a pleasure for me to have him on the podcast today. Welcome to the show, Dave. Thanks, Rodger. It's good to be with you. I'm looking forward to this. I appreciate you coming in. I wanted to ask you about your beginnings when it comes to your coaching business. So starting off with, first of all, what inspired you to become a coach and then start your own business.

David Pennington 2:05

Actually, this is probably my third career. So I'll back up a little bit before that. Believe it or not, I started out in ministry, in the ministry nonprofit area. I did a lot in that area, built mostly mid to larger size organizations with private schools. So substantial employees, all the pieces and parts that go with building that. Nonprofit can be challenging because you're very much dependent upon people volunteering in a lot of ways. So you have less control, less ability to direct. Then I've also had a career in private education. in the States. Sometimes in Europe, it's called public education. But the idea is private funded schools. I think I've been a head of school of six or seven schools. I was an executive director with 37 schools in it, president of organization on a national board, done a lot of adjunct teaching. So a lot in private education and developing people. Really all my life, I've been working with getting the right people on the bus, getting them in the right seat, really developing them and helping them excel. And then the last 10 years, I've had pen coaching and consulting. And it was kind of a natural outflow of all the things I've done. I've always been good at administrative leadership development, those kind of things. I've always been able to cite good people, get those people on my team, help develop them and really see them excel. And that helps the whole organization excel. And so the coaching and consulting is something that just came naturally to me. I enjoy working with people. I actually enjoy impacting people's lives. That's probably, you know, this is kind of my third career, if you want to think of I like that. And like anybody, you want to make some income. But really, for me, it's as much about impact as it is anything else, because I really enjoy impacting people's lives. And I call it the pebble in the pond concept. I know when I can lean in and help a leader, and hey, leadership is lonely at times, but when I can help a leader grow and develop and excel, it functions as a pebble in the pond. There's a ripple effect where everybody in that organization benefits from that leader growing, developing, becoming a better leader. And so that that multiple impact for me

Rexhen Doda 4:08

is really what it's all about. Beautiful. And so when it comes to your coaching business right now, when working with people, you did mention that you are also driven by impact, which is something that we talk about a lot in this podcast. So I wanted to dive a little bit deeper into the ideal client profile. If we have the right people listening, just like I mentioned earlier, we mentioned this on the intro as well. So we're working with small to midsize business owners. Is there a specific industry or a specific demographic or psychographic? Do they have some common goals or other commonalities that you see?

David Pennington 4:41

Yeah, I've not really tied myself to a specific industry. I've had clients and I mean, I've had printers, plumbers, medical doctors, accountants, all kinds of different people in different verticals. So, you know, to me, it's kind of leadership. A lot of times you can be good at a craft or at a skill and maybe you're even good in starting something, but not everyone is good at growing, scaling, developing something. And it's hard to recognize what you're good at doing in many cases when you start a business because you've never done it all before. You have a trade or a particular skill set that you're good at. You're good at that. But you've never had to do all the things that are required to be a business owner. The marketing, the sales, the deliverables, the financials, all the kind of pieces and parts that really grow into having a good business. And usually you find pretty quickly, you know what? I like this one, but I'm not so good at that one. And you have to know what you're good at doing And I always say, lean into what you're good at doing, focus your attention and your energy there. And then you want to surround yourself with what I call a complimentary dream team, which are people that are compliment you, but they're good, really great at what you're just sort of okay at. I usually say it this way, believe it or not, they're actually people that love doing what you hate doing, and they're really good at it. You need to find those people and get them on your team. And when you do that, what it does, it takes a Mm-hmm. You have to restructure and reorganize so that you have more volume, more capacity to be able to grow and to excel. And sometimes business owners see that, sometimes they don't. There's all kinds of factors that go into whether they're willing to do that or not as well.

Rexhen Doda 6:51

Yeah. Well, how is it like for these small to mid-sized business owners to work with you? Speaking of the engagement they have with you, is it one-on-one coaching, group coaching? Do they have some sort of a program they go through? How would you describe that?

David Pennington 7:05

Yeah, mostly I do more one-on-one. It's what I like doing. You know, it's not always the most financially rewarding, but once again, the finances are just part of it for me. I like investing my life in the people. And so what I typically do is I customize how I work with people. And so I get to know the person and really understand what are their pain points? What are their strengths? What are their weaknesses? What are their goals? What are they really wanting to accomplish? Because not everyone is trying to accomplish the same thing. And then we put that into a package on the short side, usually six months. I've had clients two, three years, longer term clients. So it just depends on what they want to do. I like to customize what we're doing to fit them so that they reach their objectives, their goals, that transformation that they're after. But it's sort of customized to them versus forcing them to fit in sort of a boilerplate, just one size fits all, because I really don't think that's true. And it just works better if I customize it to them. We spend time on what they need. We avoid things that they really don't need and we move faster and usually we have more results better results because of that

Rexhen Doda 8:14

yeah and so it's mostly one-on-one and so when it comes to them finding you or you finding them marketing wise this topic we like to talk about too is what have you seen working really well for you in terms of marketing and finding your clients

David Pennington 8:33

well i have a whole bunch of social things that i do i'll tell you what i currently do and i'll tell you kind of where i seem to get the best results from. I do a lot of video shorts. So I do 12 video shorts a month. I write four blogs or articles a month. I usually have at least a couple of testimonials of people that I've worked with, maybe a leadership statement, something I've found that's kind of catchy that catches people's attention. And then actually being on podcasts, I usually share one or two podcasts that I've been on so they can kind of, you know, get a feel for me and my vibe, so to speak. And all of that goes out almost every day. There's something that goes out and it's a really four platforms, LinkedIn, Instagram, Facebook, and YouTube. Probably the one that works best for me is LinkedIn. And it's just because that's kind of more where business leaders hang out. I also have the potential and will periodically run kind of a, I'll call it a drip funnel where I will do a search and sales navigator, really kind of zero in on the people, the size of the company I'm wanting, what I'm aiming for. And then I can put it in a program that will, first of all, just connect with them if I'm not already connected with them on LinkedIn. And then we'll kind to nurture them to a point where they then will begin to respond, maybe DM me in LinkedIn, or they maybe set up what I call a discovery call. I'm not a pressure kind of guy. I really, I always say it kind of needs to work for you and it kind of needs to work for me. There are times where they have a need, but it's maybe not quite what I do. And I most say, well, look, I could probably help you here, but I have a friend who is better designed or better equipped to help you. Let me direct you to him. Or sometimes it's just not a good good vibe, you know, not a good chemistry. I've been at this long enough now that I know that, hey, the last thing you want to do is work with people that you don't want to really work with. And it doesn't matter what they pay you. You're thinking, oh, I got to meet with him again today. And I don't like to be in that role. So I prefer, you know, to have that chemistry there where I feel like, hey, we have a good understanding. We see, we get each other and we

Rexhen Doda 10:34

can help each

David Pennington 10:34

other.

Rexhen Doda 10:34

Absolutely. And so the thing about LinkedIn being that kind of, I believe that probably referrals is a big one for you too, right?

David Pennington 10:42

Yes. I've got a lot of clients through referrals and that's often the case. You know, you can't really rely on them because there are people that make it a point to constantly kind of push the referral part. I like it a little bit better when it's more organic because, you know, you don't want to knock on your previous customers or friends to kind of constantly refer you. It's better for me to just do my prospecting and do my connecting and It is somewhat of a volume game. I know the last year or 18 months, to me, this coaching space has gotten fairly noisy. A lot of people jumping in and doing similar things. One of the things I've done to differentiate myself is I've added a valuation and acquisition component where I now have the ability to give access to an assessment where a business owner can understand the value of his company, what he could sell it for. That's based upon eight metrics. Those eight metrics, you get a score from zero to a hundred. And most people come in, these is, you know, kind of mid range. And if you, if you're familiar with selling and the valuation part, often you have what's called a multiple. So let's say you have a million dollar company, you got a million dollars coming in. Usually a multiple will be somewhere around two and a half to three. So that million dollar company, everything else being even is worth about $3 million. Now on these eight metrics, if I can help you move them from a 47, say up to an 80 or a 90 on that score of zero to a hundred. Now that multiple can get to be six or seven. So now you have a million dollar company that can be worth six or seven million dollars versus three million dollars. So a lot of value by just knowing what levers to move and how to improve your company to position it where it has greater value. And it's actually more sellable as

Rexhen Doda 12:29

well. Absolutely. Where are you like thinking about your coaching business? Where are you headed for the next one to three years? Do you have any specific business goals in mind?

David Pennington 12:37

Well, I'm actually more on the exiting part. There's something called a silver tsunami. Some people are aware of this, some are not. It's basically baby boomers. I'm a baby boomer, so I understand the boomers that are aging out. So the idea is in the next five plus years, they estimate that some 10 trillion with a T dollars are going to exchange hands. Because baby boomers are going to either close their business down, they're going to pass it on to their kids or they're going to sell it. And a lot of them don't have an exit plan. Yeah. They don't know what to do. They don't know how to do it. You know, they've been good at building the business, maybe okay at maintaining the business, but they don't know how to get out. And so there's kind of a blue ocean there to be able to come alongside of them and help them see that, you know, for example, I have a client right now who's a printer and he's been a client for a couple of years and he's decided that he wants to sell his business. He's been at it for a while. He's actually still fairly young. He's in his early 50s. But he's just tired. He's done this a long time and he's ready to move on and do something else. And so he's decided he wants to sell his business to his son. And he's actually not only going to sell it to him, but he's going to finance the sale for his son. So that allows him to get some interest on top of what he gets for his company. He actually has a separate LLC that owns the building that his business meets in. So that will continue to rent from his other LLC. So that'll be additional income. And we put a whole package together so that literally he can actually go on a Friday, he could walk out of the business and he sells it to his son. And on a Monday, he still has adequate income, maybe as much or more income than what he had while he was working. But now he doesn't have to go to work. And we're beginning to talk about, okay, what are you going to? And probably he's going to go into some property management and some things like that. But there are all kinds of people out there that have equity and value in their company. And you don't have to ride it out until you're just exhausted and dead and you're tired of it. You can take an early retirement and actually have a second career that may be more lucrative than the first career. So it's not always just with older folks, but even younger people. And some people actually design a business even just right from the get-go where they're going to take three years, build it, and then they're going to sell it and they hope they can sell it for a high value and then go on to their next career that they want. So all kinds of opportunity here.

Rexhen Doda 15:04

And there's so many young people, too, that are trying to buy these businesses as well. So there's like a big opportunity here.

David Pennington 15:10

Yeah. And, you know, what's nice about it, if you're the owner, you know, let's say you're younger and you come in, you have a little bit, you know, you have a nest egg, but you don't have enough to buy the business out. I'm just saying, say it's worth a million dollars just for the sake of it. You don't have a million dollars you can lay down. All right. You go out and finance it. You know, sometimes that's not so easy. But if If you can meet an owner who wants to sell it and the owner is willing to finance it, then what happens is you can get it. right away, the owner will benefit because he gets the sell. Plus he gets the interest off of the sell. That helps him from a tax perspective because it spreads some of that all over time. And what happens is it's kind of a win-win for everybody. And so, you know, those kinds of opportunities, I look forward to kind of marrying up where you, you, you know, be someone already on his staff, you know, that he's known for a long time that he positions them to buy him out or buy her out. So there's all kinds of ways you can do this. And it's kind of, it's a little bit like putting together a puzzle. It's kind of fun you know

Rexhen Doda 16:07

yeah it's so interesting uh you're in a very good space and so right now with your your business just say is a you mentioned you want to exit too right so kind of like you're in a way yeah what i'm doing is

David Pennington 16:22

i'll just you know i have i actually for me because it's not like a ton of income so i actually limit the number of clients i try to limit my clients to 12 12 clients a year not having more than 12 at a time throughout the And that's very manageable for me, very reasonable in terms of time and effort and energy. I see me doing this for a while. I like doing it. I like helping people. I think I've done with it. And what I will do is if I get more opportunity where I just have a bunch of people that want to work with me, then I will just probably elevate my pricing and still reach my 12. Because it's not like I'm in it for the money, but obviously I want to make some money. One of my goals, I'll just tell you, I have, believe it or not, I have seven children and I have seven grandchildren. Oh,

Rexhen Doda 17:11

you're lucky.

David Pennington 17:11

Yeah. And one of my goals is I want to provide a down payment for a home for all of my grandchildren. I don't know what that'll be, maybe $1,500,000, something like that. So once they get married, they're all younger still, but once they get married and they're ready to buy their first house, then I want to be able to help them buy that first house. Because for a lot of younger people, being able to own a home has become a challenge. So I feel like that's something that I could do for my grandchildren. children that would really be meaningful to me. It would be a big help to them.

Rexhen Doda 17:39

That's amazing. That's amazing. You're there like you two at the same time. This is great. So right now, when thinking about your business, what is the challenge you're facing? Like, where would you say is the bottleneck for you? And you can tie it with either maintaining it until you sell it or even with selling it. Where do you see the challenges?

David Pennington 18:01

I think for me right now, you know, it's, I've kind of re I'll say reoriented my, my to more of people who want to sell. I can help people sell. A lot of people want to scale, but there are a lot out there that focus on scaling. That's one of the reasons why I'm focusing more on the exiting. And it doesn't matter what age they are. Exiting is exiting. And if you know how to position your company so it has high value and is very sellable, it will sell for a higher amount and it will sell quicker, which is really important when you get ready to sell. So that's really what I'm focusing on And that's a little bit of a newer market for me, trying to get my foot in the door there and really connect with the right people. I'm finding a lot of people are saying, well, I'm not really ready to sell. Well, what they don't always understand is you can't wait until you get ready to sell to prepare to sell. Sometimes it will take a couple years or more, maybe three years to actually prepare your business to sell if you want optimum value. And even if you're passing your business off to your kids, there's a lot they don't know about the business. that you have spent a lifetime learning, and it's kind of like passing a baton when you're running track in a relay race. You don't want to pass the baton off to your kid and he's not really ready to receive it and drops it and it just bounces all over the track and messes the company up and messes your retirement up and messes his life up. You might need to spend a year, 18 months teaching him how to run the business, all the pieces and parts of all of that. So it just depends on, once again, the customization of where you are and what you want to do, I think is really important.

Rexhen Doda 19:40

Interesting. And right now, do you think that... In your case, with your children, is that like a goal for you too as well?

David Pennington 19:47

No, you know, I don't, my own kids, they're pretty, all seven of my kids are pretty successful. You know, many of them have, you know, advanced degrees. They have their own companies, their own businesses that in some cases they're better than I am, which is fine. You always want that for your kids. I don't, you know, for me, I see myself doing this as long as I'm healthy. I'm really pretty healthy. I have a good lifestyle and I live by kind of four principles, which are, I try to get good sleep. I try to eat healthy. I exercise regularly and I try to have low stress. Those are my four goals. And so I see myself going for a while and then maybe eventually, you know, it may be something I would pass on to one of my kids or maybe sell it, you know, sell the business down the road, but it not something that I'm looking at doing necessarily in the next few years, maybe 10 years out, I would be thinking about.

Rexhen Doda 20:36

Beautiful. Interesting. Okay, cool. So that makes a lot of sense. And so for all of these, either small to mid-sized business owners, but also other coaches who are listening, what advice would you give to them when they're trying to scale their impact? Since you're also driven by impact.

David Pennington 20:52

Yeah. You know, a lot of it is, okay, I look at it from the standpoint of, okay, what do people need? You know, here's what I found. I call it the three stars. When you're trying to really develop your business, you need to find a space where people know they have a need. In other words, sometimes people have a need, but they don't know they have a need. So when you're trying to sell them on what you do, you've got to convince them you have a need. Then you have to convince them you can help them with that need. So it's kind of like a double sell, which is harder. But if they have a need, a pain point, a problem, they're already looking for a solution. And so they're kind of looking for you and you're looking for them. When my kids were little, we used to play this card game where you would turn all the, they were like square cards and you would turn them all down and you would look for matches. You know, you were, nope, nope. Oh, there's one. What sales becomes like. You're just trying to find people who have a need. And then my second star is I have the ability to meet that need. So I have the expertise or the skill to meet that need. And then the third star is they have the ability to pay you. Those three things, when they align, you have a, you have a decent business model, you know? So the idea is I'm trying to get out there and just help people to give thought because business owners, particularly mature business owners, they're beginning to think about their end game. Okay, what am I going to do? Or sometimes they have either a personal health issue or maybe their spouse has a health issue and it's requiring a lot of time for them. And so therefore the business is kind of on autopilot and businesses don't stay on autopilot very long. So they're thinking, I need to figure out how to step out of this and what's the best way. And then you don't, think about this, but for most business owners, the most highest valued commodity within their portfolio is usually their business. That's where a lot of the money resides, even if they've invested in other things. So if they can walk away with a sizable chunk that allows them to retire, if that's what they want to do, or start another business, if that's what they want to do, all that's got to work. Everything's got to kind of align. And sometimes they just need help thinking about, well, I'm not even sure where I would go or whatever. And they need some help just thinking about what would work for them. So it's kind of a little bit like coach consultant. You wind up

Rexhen Doda 23:10

in a lot of different spaces and helping them. Thank you. Thank you so much, Dave. Thank you for the amazing advice. Thank you so much for connecting with us today. For anyone who wants to find you or reach out to you, they can go into your LinkedIn and they can search Dave Pennington. They will be able to find your profile as well. I believe there's also a website, right? Sure. It's It's

David Pennington 23:30

PennCoaching, P-E-N-N coaching.com. Or if they just want to reach out to me personally, if they want to email me, my email is Dave at PennCoaching, P-E-N-N coaching.com. So any of those places we can connect. And really, I like to just have a conversation and see if we kind of vibe together and see if we can help each other. Sometimes it works, sometimes it doesn't, but you don't know if you don't have the conversation. Absolutely. Thank you

Rexhen Doda 23:55

so much, Dave. Thank you for coming to our podcast. You're welcome, Reggie. It's good to be with you today.

Davis Nguyen 24:00

That's it for this episode of Career Coaching Secrets. If you enjoyed this conversation, you can subscribe on YouTube, Spotify, Apple Podcasts, or wherever you're listening to this episode to catch future episodes. This podcast was brought to you by Purple Circle, where we help career coaches scale their business to $100,000 years, $100,000 months, or even $100,000 weeks, all without burning out and making sure that you're making the impact and having the life that you want. To learn more about our community and how we can help you, visit joinpurplecircle.com.