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Unlock the secrets to business success and gain valuable insights from local industry leaders. Join us as we delve into the strategies, triumphs, and lessons learned of thriving companies, empowering entrepreneurs to elevate their businesses to new heights.
Sharon: [00:00:04] Welcome to It's Time for Success, the Business Insights podcast. I'm your host, Sharon De Koning. A huge thank you to Lori Power, who is episode 36 of our podcast for introducing us to today's guest, Mr. John Stevens. John is the co-founder of Camilla Group. John and his team are experts at helping business owners navigate big changes while they do everything from financial leadership to buying and selling companies, today we are focusing on how they help SMBs… I actually had to research that… small to medium business owners, turn their employees into owners. And let's repeat that… and turn their employees into owners. I think that's a cool concept. I'm really excited for today's episode. John, tell us a bit about yourself and why you're so passionate about helping small and medium sized businesses survive and thrive.
John: [00:00:52] For sure. Thanks very much for having me on your podcast today. So a little about myself, but if you go back 35 years ago, I actually articled at Deloitte as an accountant, and that's where my interest first piqued my interest in terms of employee share plan. We'll come back to that in a second. So then I spent 15 years with organizations as Chief Financial Officer, and then I moved into operations for the last 15 years of my career before starting Camilla Group six years ago. And I was the CEO for the second group of companies. And one of the things we had in common with those companies were we put in place employee ownership for the last, I think, three. And my interest started at Deloitte with employee ownership. I actually worked with the wife of the CFO of Marlin Travel back then, and Marlin Travel was an employee-owned business that started in Edmonton and over 25 years grew to Canada's largest travel agency. And then they sold to Thomas Cook. When they did, they had lots of employee owners that were business unfortunate for me. I actually after Rod Marlin sold his business to Thomas Cook, he bought another business called Eveready, and he hired me as a CFO, and we went on to implement a lot of employee ownership. It was a private company. We took it public, and when we took it public, I think we had about 180 owners in the business, and I think we peaked at maybe 800 owners in the business.
John: [00:02:17] And so that was my background. And then I got involved with the Canadian Association. I went to conferences in the US on employee ownership over the years. I was on the board for a long time with employee ownership. My favourite part about going to those conferences was learning about other companies that have implemented employee ownership and just the success they had and the difference it made in the organization. So I have a long history going back in employee ownership. We're based here in Edmonton and in Edmonton PCL, everybody knows PCL Construction. It's one of North America's largest construction companies and it started here in Edmonton. But in 1977, Bob Stollery and 25 managers bought the company from the pools who founded it, and then it went on to grow through employee ownership. And you see across Canada, a lot of companies in construction have employee ownership. So I guess to answer your question, my interest is because I think it really, truly makes a difference in how companies can grow. And we see that with our clients. We've been implementing employee share plans for clients over the last five years. And I just, I love talking to the CEOs and seeing the difference it makes in the businesses when they get their employees involved in ownership.
Sharon: [00:03:36] This looks like… So there's got to be pros and cons, and there's got to be some situations where it wouldn't work for certain companies, but other companies. So we're going to dig into that a little bit today. So I'm like, so for me, I must have had in my head where I basically work in these four walls, I guess, but I never knew it was even an option. I've heard of people selling to their, you know, general manager, their people, but not employee ownership. So anyways, I'm really excited for today. So Camilla Group specializes in strategic advisory services for small and medium sized businesses, SMBs. With a core focus on mergers and acquisitions, employee stock ownership plans, and fractional CFO services. That was a new word I learned too. But today I would love to focus on two topics, and that is EOTs, employee ownership trusts. And the other topic is ESOP.
John: [00:04:26] For sure. They're relatively new in Canada. We were the last G7 country to put in any type of tax incentive for employee ownership. And so the government introduced them. They were passed into legislation for a three year period, which expires at the end of this year. Unfortunately, we're hoping for an extension, but the real big carrot from a tax is you get a $10 million capital gains exemption. And so that was the driving factor why individuals might want to do this. They were a little bit slow on the pickup. We had our annual employee ownership conference last September in Calgary, and the first three that had done it in 2025 were there presenting at the conference and a few reasons for that. When they first came out, we had a lot of interest that presented probably half a dozen times on the topic, just because there was so much interest when it first came out. One of the things that the legislation did is a lot of entrepreneurs own their businesses and holding companies, and holding companies weren't eligible for the capital gains exemption. Fortunately, the government fixed that and changed some legislation last year, late in the year. And so now, if you have a holding company, you can do it. So we're really hoping that we're seeing an extension of the $10 million capital gains exemption. And it's, so it essentially is for the right business. And so the business is probably a business that has at least 25 employees.
John: [00:05:59] You probably need to, you know, be, let's call it 2.5 to 3 million, what we call EBITDA or cash flow in the business just because of the cost of putting the transaction together. And so if you do that, what you're essentially doing is selling your business to your employees over time. And T stands for Employee Ownership Trust. And so you're going to be paid out as an owner through future earnings in the business. So you're going to have to have a business that generates good cash flow. Maybe doesn't need a lot of growth capital. It's a mature business over the foreseeable next few years because some of that capital needs to go back to pay the owner of the business. And then the employees are going to become beneficiaries of the business. And so there's a breakdown based on what your salary is, your tenure, how long you've been with the company. There's different formulas you can use both for the income portion and the capital portion. So it really, we think is a good option for the right business. A lot, as you know, you deal with entrepreneurs and have discussions with them, is a lot of blood, sweat, and tears go into growing your business over time and your employees almost become your friends or your family because you expend a tremendous amount of time growing your business and working with your employees.
John: [00:07:23] And so for individuals that want to leave the right legacy and don't want to sell their business and see some strategic buyer come in and maybe close down a location after they buy it, it is a really interesting way of leaving businesses in Canadian ownership, especially in small towns and such, because the $10 million capital gains exemption is a pretty big carrot. There are also ways you can structure it to provide financing as well. There are several banks that are involved and would like to. We've talked to, I think, almost all of them about providing some kind of financing for the right business that… Obviously, if you're going to leave the business as well, another key characteristic you have to have is good management in the business, because once you sell that business, you know, a lot of times people are going to want to move on and retire. Doesn't mean you have to. You can stick around as the president of the employees owning it. But having that next level of management is a really important thing as well. And so I think what it's done as well, and we chatted about it, I think before we started the podcast, is this whole Employee Ownership Trust has elevated the interest in ESOPs as well. And so, you know, we're hoping to see more EOTs, but we like the interest that we're seeing with employee share plans of other types as well.
Sharon: [00:08:44] What are some of the, I guess, industries that are really embracing this? Is it multiple locations? You talked about 25 employees plus. We talked about 2 million to 3 million EBITDA. It's got to have like the growth. It's got to have good management. But is it like, because you also talked about construction, that's one that's popular, that's embracing this. Is there anything else that you see that it really does well in a certain industry?
John: [00:09:11] So when I talked about construction, that's ESOPs, not EOTs. And as I mentioned, there's only been a handful that have done this. I think service organizations where people are, you know, your core asset, I think would be ideal for EOTs. Like I said, you don't want it to be capital intensive. One of the companies, Taproot, is a company that is basically a people company. They provide services and people are the key. So businesses that… engineering, consulting type companies, I can see this working very well for. Those are… but any company could be eligible for the EOT and hopefully we'll see more uptake. As I said, it's a relatively new thing, but those are some of the attributes of business that would make sense.
Sharon: [00:10:06] Have you ever seen it not work? Have you ever seen a company that has embraced this and it didn't work?
John: [00:10:11] Well, again, that's probably more of a question for ESOPs than it is for EOTs, because the first three were just done last fall. And so definitely for ESOPs, I can give you all kinds of examples of pitfalls that happen with ESOPs and the reasons why ESOP implementation for employee share plans can work. Obviously, if the business fails, that's an example where… and sometimes that's outside things with industries or things that the strategy of the business might not be correct that can affect it. Another is lack of communication. When you don't have good communication to the employees. What is this all about? They don't have a good understanding of it. There's just not an uptake on it. So communication, financial literacy is really an important part of, whether it's an EOT or whether it's an ESOP, communicating that to the employees. But obviously through industries that have issues, other issues, whether that's the, you know, government regulation changes, whatever that may be, things can affect the business that can affect ESOPs. And that really can be a negative thing if the business, the business fails or the business isn't growing, or the value of the business is increasing over time. And so, yes, we've seen that happen on more than one occasion, but it's usually not the employee ownership that's driving that.
John: [00:11:43] Time and time again, all the studies that we see with employee ownership, it drives increased revenue, it drives cost control. Individuals will treat equipment differently when they know they own a little piece of it, all those type of things. And there's been not as many studies done in Canada, but there's been a lot of studies done in the US and the UK and other countries on the difference employee ownership makes to the engagement of employees. And we see that with our clients as well. Especially the ones we've done early on in their, into their third and fourth year of employee ownership. We talked to some of our CEOs, we talk to them on an annual basis, and they just can't get over the change in engagement with their employees, where employees used to think about, you know, their paychecks on Friday and when am I taking holidays and really thought of it as a job. But when they know that the part of their net worth is now tied to the performance of the business, they just think differently in terms of those things I talked about with revenue and cost controls and, you know, just treating the equipment differently.
Sharon: [00:12:48] That's so flipping excited. So you would still go ahead for even for both of these situations, the employee ownership and the employee stock ownership, you'd still get your business appraised, right? Probably for value. And then from there, you would find out which one of these would fit if they want to go that route. Is that how that works?
John: [00:13:06] No, no, no, that would not be the way we approach it.
Sharon: [00:13:08] Way off? See, I told you, I don't know what you think. I'm learning so much today.
John: [00:13:13] Yeah, so obviously valuation is important. We're not valuators. That's not something we do. But what we really, you want to ask the questions is what is the owner's…. and a lot of times there's more than one owner. That's what we deal with a lot of sole proprietors where there's just one owner in the business. What do they want to accomplish? Are they looking for employee engagement? Plus succession planning? What are they trying to accomplish? There's something called a broad-based employee ownership plan. So when I mean broad based, it means that every employee in the organization is eligible. Eligible for employee ownership. We do some where it's not broad-based, where they only want to bring in a certain level. In construction, for example, some construction companies do not bring their hourly employees in. They just want to bring their managers in. So what we really try to do is have a conversation with the owner to see what they want to accomplish. So valuation is important, but that really comes down the line in terms of the design phase. And that's what we do, is we'll design what makes sense. Does an EOT make sense? Does an employee ownership? And obviously there's different options with an employee, an ESOP program. So we can do, we'll do, maybe I'll go through some of the options your listeners might want to know those is so the first thing you decide is it something you want to look at? And if it is not, then do you want to look at just employee ownership program? And with those some of the accountants will do a standard tax freeze, will convert the equity in the company to shares and bring employees in as common shareholders.
John: [00:14:55] So that's kind of number one. But we'll see that a fair bit where there's sort of some key managers involved. What we, our two favorites though, are we like to do a share purchase plan where the employees actually purchase the shares from the owners, or if the employee ownership program is mature, they can actually purchase it from other owners of the business as well. We put in something called a mini market, right? In the shareholder agreement, where it's kind of once a year, there's an opportunity to buy and sell your shares or trade your sales. Think of it as an auction. It's not an auction because the price is set, but it's an auction from the perspective you can take your shares to market if you feel like selling them and you can be a buyer if you feel like buying those shares on an annual basis. And so the share purchase program. Obviously employees can need to get their money from somewhere. So there's several different ways how they can get their money. They can dig into their own pockets and purchase the shares through their own means. There's several banks that get involved with financing with larger companies that can be directly to them. With smaller companies, it'll be a loan to the company, and then the company will turn around and lend the money to the individual. It also can be a loan from the owner directly to the employees.
John: [00:16:14] We don't see that that often. We'll do a direct loan from the company to the employees. We even see payroll deductions. So there's a lot of different ways to get owners involved. What we really try to do though, is set up a system that doesn't discriminate between employees because you could have 1 or 2 managers, two managers in your organization that are in exactly the same role, but one is single and doesn't have a family at home. Another one maybe has an ex-wife or an ex-husband and, you know, a bunch of kids and just doesn't have the means to purchase the shares. And so that's why our preference is setting up some type of financing, whether that comes from the company and kind of levels the playing field where we put the financing in place. So that's the share purchase program. The other one we like to do, and this is more for engagement than it is for succession planning is a restricted share plan where we'll actually gift a portion of the shares on a tax efficient basis to the employees over time. And that plan is designed where you're giving the shares to the employees on an annual basis. And so they invest over a period of time. And so it is a great retention tool, but it also is a great engagement tool. And so we've done that with a lot of our clients where we've done the restricted share plan is what we call it, and in conjunction with the share purchase plan. And those that we think work the best, because what it does is you give a certain number of shares on a tax efficient basis, but you all the employees also purchase a number of shares on a tax efficient basis as well.
John: [00:17:53] And when you can put in place this mini market that I talked about, it really helps with getting employees engaged because if you're 3 or 4 years into the program and one of the individuals is able to sell some of their shares and they can take $50,000 off the table if the company is growing, that really helps with engagement and people understanding that's real. The worst thing you can do is just keep getting these shares and shares and shares and ten years go by and you just don't see any cash in your pocket from it. It's just a statement. Oh, I own a certain number of shares. And so that's what we really like the concept of having a robust annual mini market, where you exchange these shares between employees and the owners of the business. We have one client we're working with right now where they want to, over a ten year period, slowly sell off a portion of their shares to the employees. And so we're actually doing both the restricted share plan and the share purchase plan with them, where they're going to give a portion of the shares to the employees. Over time, the employees are going to purchase the shares, and we're going to have an annual mini market in that particular case. And so they'll sell some of their shares. Employees will sell some of their shares. And it just works really effectively.
Sharon: [00:19:07] Wow. So is there restrictions on that one? Like the other one was the 2-3 million EBITDA, 25 employees. Like is there a different criteria for this?
John: [00:19:15] No, I think any business… you probably need to have, you know, 4 or $5 million valuation for it to be a broad-based employee. We'll work with smaller businesses where they want to get more of a handful of employees involved. The problem with the restricted share plan is if you don't have a huge valuation, something called dilution, because it's dilutive. If you understand what that means is basically you're giving away, so instead of owning 100% over time, you're maybe only going to own 85% over a ten year period. So we can make it work for most companies, but it's probably best if you have at least a $5 million valuation for a restricted share plan. With a share purchase plan, it really doesn't matter. But again, you probably need to be, you know, have at least ten employees and be of a size of 2.5 to $3 million. It doesn't work well for real, real small businesses. That's more where you're going to just sell it to maybe 2 or 3 key managers. We can help with that, and I've done that before as well. But I consider that to be a broad-based employee share ownership plan.
Sharon: [00:20:24] Okay. All right. Holy doodles, This is a lot. And we talked about the tax. So all these will be… help you with tax for an employee, like for an employer. right? All these situations?
John: [00:20:37] Well the two tax benefits that are the employee ownership trusts with the $10 million capital gains exemption we talked about. But with the restricted share plan, we can efficiently gift taxes to an employee, which essentially is a tax deferral where you're not paying tax upfront with the share purchase plan, you're essentially purchasing shares with after tax dollars. Quite a few of our clients and structures where you actually utilize bonuses, where annual bonuses, you can take a portion of that bonus and purchase shares with it. So there's different ways you can look at the design to make it efficient. And that's what we do. These are not, these are not straightforward share plans. And that's one of the issues with Canada with the ESOPs is they're all a little bit different because they've gone to a lawyer or a tax accountant and they've designed them to fit their business. But when I say they're a little bit different, there are similarities. Where if you go to the US, US has legislation, all ESOPs are equal. They're all the same. UK, same thing. They're all the same. Where we didn't have any legislation in place. And there are some concerns with the EOT with certain individuals is you do have to give up control. There's some things you can do around that in terms of giving up control. Where in the US and the UK a little bit different. And so to answer your question, the tax basis or the tax question. Yeah, there's things that you can do to, you know, make them tax efficient with the ESOPs.
Sharon: [00:22:15] EOTs. I think it was that one. I think we talked before it was like, I didn't understand. It doesn't have to be all the employees that embrace this and they can do it later on. Is that correct? Or as you bring in more team members?
John: [00:22:28] Yeah. So you have to sell 51% and you can deal with the other 49% later. It's interesting because there are certain things you can do from a governance perspective until you're paid out. If you go on our website, we actually have a case study on EOTs. If you go into an employee ownership trust, you can pull down and you'll see that the PowerPoint that has the case study. But what we're seeing is, and again, it hasn't happened yet, but we saw a fair bit of interest with family offices, certain private equity firms that would be interested in investing a minority portion in the business because usually private equity wants control. They want to purchase control. But the employee ownership in the EOT is interesting enough that we've talked to several across Canada that do have an interest in partnering with the employees. So the employees have to purchase 51% for the EOT, but then you can bring in a partner. And this helps owners of the business as well, because they can take more cash off the table if you bring in an outside investor. And so that's something that is a possibility as well.
Sharon: [00:23:35] And so I've also just been speaking with Lori, I believe it was, that banks are actually embracing this as well. There's certain banks out there that are embracing this new or for me, it's new, this technique. Is that correct?
John: [00:23:50] Yeah. For sure. So, Bank of Montreal, has one individual dedicated to employee ownership financing. Scotiabank has their arm. Reinhardt that has, you know, talked about possibly financing efforts. A lot of the banks, finance companies like PCL where they lend directly to the employees to purchase shares recently met with the gal, the senior gal from Servus Credit Union. They're interested in providing financing for employee ownership. Her husband works for PCL. That's kind of where they got the idea. So yeah, several banks really like to look at employee ownership financing and several would look at EOT. And again, it's early on. And the case study example that I talked about, we actually do a case study in there where we show financing from a bank and how that could finance the 10 million.
Sharon: [00:24:47] Okay. Okay. So and you said there's a good track record. I get that because your employees are more dedicated into it. Like you had mentioned the, from the equipment to everything. But also, it's also, I'm very, a strong advocate for communities. So as a business owner, I created like It's Time Promotions from scratch. I didn't know how to get, I didn't know how to weed vinyl. I didn't know how to thread my embroidery machine. I didn't know anything like, I mean, I was so green. And then to have it 19 years later, it would be really sad, and I think for most businesses out there, be really sad just to sell it and then just to see it change names and go away because it is like a baby. You've grown it, you've nurtured it, you've got it going. And a lot of our employees, like I think two of mine for sure have been with me almost since the days we opened the doors. Right? So you want to be able to give back. And they've already embraced It's Time Promotions, they own it. They walk it. They're following our core values. They're doing everything right. So for me, I would love to be able to have that opportunity to pay it forward to them and to, you know, say it, say thank you and offer them something to carry on the so-called legacy, I guess. I don't know if it's the right word, but services to our community because there's a lot of people that rely on us.
John: [00:26:01] You summarized it. That's the biggest benefit for the EOTs right there is. And I think it's a lot of businesses in small communities right across Canada, that it's a great option to transfer your business to your employees, get the $10 million capital gains exemption. You'll sleep better at night because you know your business is going to the people that help you grow it, just like you said, that embrace your core values, do all those things. And so that is the biggest benefit of employee ownership trust right there.
Sharon: [00:26:29] Okay. Okay. So I think we just need to do a small recap on how our customers or our, sorry, our listeners, I guess some, some criterias of what, what would qualify them for this? Again, if you don't mind just repeating some of those things for them.
John: [00:26:47] Yeah. So like I said, probably 25 employees, EBITDA $2 to 3 million. Depends on on the industry is probably the minimum size. Obviously all the way up to $75 million EBITDA. You could look at it an EOT. For employee share plans, you've got to be a, you know, you know, probably value of somewhere minimum $3 to 4 million and up and you know, probably at least ten employees. And with the employee share plans, there's different things you can look at. You can look at a share purchase plan. You can look at some tax freezes. You can look at a restricted share plan. We didn't talk about it, but a couple other options we don't do a lot of is we consider options to be a certain form of employee ownership. You see that a lot in high growth companies. So it's a little bit different. It's something called phantom share plans. We see some of the tax guys do that. We're not big fans of those. So the two that we really focus on are the restricted share plans or the employee share purchase plans. And most companies, we could design a type of plan that would make sense for them. And that's what we do as a firm.
John: [00:27:53] We design and we implement employee share plans. Our engagement letters are broken up between design and implementation. And the reason for that is, as I mentioned earlier on in the podcast, is all the tax accountants, they do them a little bit different and the lawyers do them a little bit different. Obviously, there's lots of similarities between what they do And your listeners could go to their accountant and say, oh, we want to do this employee share plan. What's the best tax way to do it? Or they could go to their lawyer and ask the question. The problem is, isbecause it's so specialized, they may have a limited amount of experience in terms of what's structured. So we've seen so many of these plans over the years through our firm and implementing them and through the employee share plan associations, both in Canada and the US. We know what works for what you're trying to accomplish and for the size of the business. And so we really complement what the tax accountants and the lawyers do and we'll bring them in, you know, later on after we've, we've done some design phase. And most times it's truly a rubber stamp just because we've been working on these for so long.
John: [00:29:00] The valuation question I think you asked at the beginning is an important part. We're not valuators. And so when you're selling your business to your employees, you definitely have to get an evaluation, especially when they're digging into their jeans and purchasing the shares from you. And with an EOT, you have to do that. And in some cases, for smaller businesses that are simple to evaluate and you're only doing a restricted share plan, so you're essentially giving the shares to the employees, you don't have to go out and get a third party evaluation right away, but we do recommend it. And there are several different firms that we work with to provide valuations to our clients and the company. So valuation is a big piece. And so that's really the decision that needs to be made is, you know, is EOT something that makes sense for you? And we can, you know, help you through that process and through that discussion? Or is it an employee share plan? Are you looking for just engagement from your employees? Or are you looking for succession planning and taking cash off the table as well?
Sharon: [00:30:01] So if a person was interested, but they're not up to those, say the $3 million EBITDA. But there's something, is there something way that they can send you financials and you can say, you know what, that's not going to work for this, but this might be an opportunity. Is that something that, you know, a smaller based business that can help? Can you help them with that?
John: [00:30:20] I just want to clarify something. So with the with the EOTs, it's $3 million EBITDA, but with an ESOP, I was talking overall enterprise value of $3 to 4 million. So two different things. So the businesses that are eligible for ESOPs that we work with would be smaller. So, you know, probably a million, minimum a million EBITDA. So with an ESOP, a million EBITDA, that's probably the minimum, I would say would be $1 million EBITDA. And a handful of employees. You probably need, like I said, with an ESOP, at least ten employees. Not that we… we have done it for smaller ones. So yeah, you can reach out to us. CamillaGroup.com is our website. We have a form you can fill out and just tell us a little bit about your business, what you're thinking, what you're looking. And you know, we're happy to have someone have a conversation with you to see what makes sense for you.
Sharon: [00:31:15] It sounds like there's lots of different options out there for somebody. And like, if you are passionate about your business and you're in a stage like I'm at where, you know, I just want to say thank you to my employees and help them carry on. I think that would be a good, a good thing. So for the EBITDA, if I pronounce that correctly, also, it's something that, our listeners, they don't calculate. Their accountants or an appraiser can figure that out. Is that correct?
John: [00:31:41] Yeah. Look at it from a simple perspective is everybody understands cashflow. And so EBITDA is essentially cashflow. For your listeners who don't know what that is, it's the obviously before tax and depreciation, what does an amortization and interest? So what does your business generate? And so cashflow. And so to think of it more as valuation. So every business trades at a multiple of cash flow, whether smaller businesses, whether that's a three times multiple or a bigger business, whether it's a five times multiple. And so, when you look at valuation of the business, all things being equal, we're talking enterprise value because when we say enterprise value, what that's your value of your business before any debt that may be on your business. And so with EOT, you probably need to be at least $10 million valuation for it to make sense. Ties into this $10 million dollar capital gains exemption. With a smaller business for an Esop. Like I said before, call it $3 million, but it all depends a little bit on the business is kind of the minimum number from a valuation perspective. And so if you're a three multiple, you generate $1 million worth of cash flow, then your value of your business is $3 million.
Sharon: [00:32:57] Is there anything else that we should share with our listeners before we sign off here? John.
John: [00:33:02] I don't think so. I, you know, based on my experience of what I've seen, it really can make a difference in business with employee engagement and, you know, the success of the business growing the business. So, you know, I've been an advocate for a long time of employee ownership. And, you know, I think it's a great thing for companies to consider.
Sharon: [00:33:21] I'm really. Yeah, I think it's… I think it would be… just listening to you and listening to Lori as well. And yeah, I've never really thought about it. I've known about the shares, don't get me wrong. Like, I know, like there's different businesses that will give shares to their employees or however that works. But I've always been a little bit nervous about that because what happens as a business owner and you can explain that, so I'm always a little bit nervous about that until I'm ready to embrace and slowly, like, get out of the picture because I use a lot of gray areas. I hope there's no tax man listening to me. But, you know what I mean? So like they can question like, why? Because the bottom line is different because Sharon's taken advantage of the gray areas, right? So I always thought it's not really fair to do that at this point for me. Does that make sense?
John: [00:34:05] Yeah. Great question. So from the government's point of view, a lot of people do have concerns about bringing their employees in for several reasons, the reasons that you talked about, but also just from a control perspective, voting perspective, but there's lots of things that we can do from a governance perspective. Like for the most part, a lot of our programs are non-voting shares and things that we do with the employee ownership. Again, it depends on control and non-control those, those type of things. But from a governance perspective, yes, some of those things change. We're working with the client right now that, you know, I like to call it low hanging fruit for the tax man, but your employees now own part of it. So you've got to pay yourself a salary that's market, you know, if you have a vehicle in that's, it's totally personal or whatever those things may be, you can't do some of those things a lot of businesses do. Like we said, we hope CRA isn't listening, but a lot of businesses do those things. But you, from a governance perspective, you need to, to do things correctly. Because if you're putting, you know, you're paying yourself a salary that's not market is a great example. Happens all the time. You can't do that. You have to come up with what that market salary is. And those are some of the things that we help with as well. Looking at what those normalized cash flow numbers are. So we'll go back and say, okay, we're going to do what a market salary is for the president of the company. This wasn't market before. So those things need to be added back in order to understand what the real cash flow from the business or EBITDA from the business is.
Sharon: [00:35:32] Okay, John, what is a tip that you would like to share with any entrepreneurs out there? Doesn't even have to be anything related, but what's a strong tip?
John: [00:35:39] I would say this: is if you don't have an executive coach, go and get one. I just right around Covid, my daughter and myself went to Royal Roads University online, virtually. We didn't have to go there because of Covid and got our graduate certificate in executive coaching. So I do a little bit of executive coaching, but more importantly, I got my own executive coach. And so every two weeks I meet with my executive coach and there's lots out there. It's just individual executive coach. But obviously people have heard of tech or EO or Makay CEO forums. I think it's one of the most important things you can do as an entrepreneur. And a lot of them do it already. But having an executive coach. I didn't have one when I was the CEO of a company. I've only had one in the last five years. And I think it is, it's really a great thing. It holds you accountable. So that would be my tip is make sure you have an executive coach and you're meeting with them every two weeks.
Sharon: [00:36:37] Okay. What's the difference between executive coach and a business coach?
John: [00:36:41] It's kind of the same thing.
Sharon: [00:36:44] Okay, so have somebody in your corner that you can talk to and level up to basically.
John: [00:36:49] Yeah, I would say executive coaching is probably more formal. So like, so for example, I'm a Certified Executive Coach, CEC. And so it's kind of a formal process. You go through on a, it can be monthly or it can be every two weeks. So it's similar. I would suggest executive coach probably makes sense. There's a lot of people that talk about life coaching, business coach, executive coach. I think as long as you have a coach that holds you accountable, that's the important part.
Sharon: [00:37:19] Okay. I always said, you know, like what you heard many times for sports people, they have a coach. And business owners, we need a coach. And I have a, I embraced a business coach many years ago and he's changed my life. Literally. He changed my life.
John: [00:37:32] You know my tip. So you can say the same tip Sharon.
Sharon: [00:37:35] Oh yeah. I remember even investing. It's like holy doodles. That's a lot of money, but it's paid for itself. And I'm a better leader, I'm a better person because of it. So I think that, yeah, I agree with you. You need, you need help and these, and even like, you know, you go for I always say you go for coffee with your friend down the street and you go have coffee with a different, you know, your business owners or your business group. Those are two different coffees. So find the right group as well.
John: [00:37:59] Absolutely. You're bang on. Great advice Sharon.
Sharon: [00:38:03] What is a book that every entrepreneur should read?
John: [00:38:06] Well, a book I read years ago and I would suggest that everybody reads it is. And I've had a chance to meet the author. It's a book called First Break All the Rules by Marcus Buckingham. I had a chance to meet Marcus. He's got a co-author, too. I can't remember the co-author's name. But where Marcus worked is he worked at the Gallup organization. And what they did is they surveyed over 400 companies, and I think it was 80 or 100,000 managers. And, it was all about employee engagement. What made employees engaged. So it ties into the employee ownership piece really nice. I read this book years ago. It's a bit of an older book, but I think it's still all relevant to business today. And it just tells you the things that you need to do to make sure your employees are engaged. So it's one of my favourite books. I have lots of books. I'm an avid reader, and you always learn something from business books and different types of books. So I could go on all day and give you all kinds of recommendations. But that would be.
Sharon: [00:39:09] That's always one I’m like…
John: [00:39:09] Sort of ties into employee ownership.
Sharon: [00:39:12] I think as entrepreneurs, we need to read, we need to stay our, you know, we need to we can always learn something. So that's why one of my key questions are because I think as our listeners, I hope you do embrace these literature that our guests are telling us about and do that. So sometimes I also listen to audio. I mean, because I drive a lot. So the audiobooks are great, but I'd like to highlight and make notes. So unfortunately, the audio is okay, but I prefer a paper book myself.
John: [00:39:41] I do a combination of both.
Sharon: [00:39:44] Yes or, that's exactly it. So I'll get the audio and it's like, oh my goodness, then I have to go buy it, right? So there's… sometimes the audio is fine and then I don't need to go buy it, but usually I listen to it first and then I have to go buy it. Okay. If one of our listeners needs more clarification or thinks this may be an excellent route for them, how do they get ahold of you?
John: [00:40:05] I may have mentioned earlier, I mentioned again, Camillagroup.com is our website. There's a place on there you can go and fill out a form or just a question and put your email in and send it off and we'll get back to you.
Sharon: [00:40:20] That's perfect. So you fill out the form and then they go.
John: [00:40:22] Yeah, you can go to LinkedIn too. And, Camilla Group and the message there directly John Stevens, and message me on LinkedIn as well.
Sharon: [00:40:32] Perfect. Well, I'm definitely going to download that book. And well, I don't know if it's an older book, it might not be on Audible. I'm not sure, but I'll figure that out. So thank you for that. John, thank you for being a champion for small businesses and helping us understand how to share the success of our team with our team. Somewhere I want to get to someday. Hopefully I can get there sooner than later or even work towards it. That's kind of my goal right now. And to our listeners, thank you for listening. This podcast is truly meant to help someone out there and I'm confident that today's podcast with John Stevens, with Camilla Group has done just that. Got you thinking, at least, I hope. If you have any questions, please, please reach out to John and his group over there. Please subscribe and reach out to John at Camilla Group and share this episode with another entrepreneur. If you've had a learning curve or a question, reach out. And if you have a topic you want to share with our listeners, email me directly at Sharon@itpromo.ca. I'd love to hear your story and maybe get you on the podcast. Thank you, John, for joining us today. I really do appreciate it.
John: [00:41:31] Thank you for having me, Sharon. It's been great.
Sharon: [00:41:34] Thank you. Thank you so much.