WEBVTT NOTE This file was generated by Descript 00:00:00.870 --> 00:00:06.600 Welcome to Resilience Talk hosted by Paul Spencer of Second Nature Solutions. 00:00:07.020 --> 00:00:07.860 Let's dive in. 00:00:09.568 --> 00:00:10.768 Well, here we are. 00:00:11.008 --> 00:00:14.968 We're on the last one, number eight, number eight of the key 00:00:14.968 --> 00:00:18.688 evaluators that we've been talking about within the ownership series. 00:00:19.048 --> 00:00:23.968 And just as a quick review, we have financial performance, we have growth 00:00:23.968 --> 00:00:31.048 potential, key dependencies, recurring revenue, right to win, corporate 00:00:31.048 --> 00:00:33.988 structure, key management and leadership. 00:00:34.468 --> 00:00:36.508 And then finally, what we're gonna talk about today. 00:00:36.913 --> 00:00:38.713 Owner involvement. 00:00:39.343 --> 00:00:43.453 Now, when we're talking about ownership, we're talking about 00:00:43.453 --> 00:00:47.113 creating an asset, owning an asset. 00:00:47.683 --> 00:00:52.663 And I know we've said this over and over again, but it's really important to have 00:00:52.663 --> 00:00:56.923 the lens that you business is an asset. 00:00:57.313 --> 00:01:03.313 So when we think about our family, family's on one side and 00:01:03.313 --> 00:01:04.632 our business is on the other. 00:01:04.693 --> 00:01:07.183 The business is temporary. 00:01:07.783 --> 00:01:09.073 Family is forever. 00:01:09.553 --> 00:01:10.873 You've heard me say that before. 00:01:11.113 --> 00:01:12.253 Family is forever. 00:01:12.583 --> 00:01:16.933 The business is temporary, but the business is also an asset. 00:01:17.263 --> 00:01:24.763 And so at some point in time I do not have the capability to run and own 00:01:24.763 --> 00:01:30.313 the business either because of health, because, uh, what we'll talk about, I get 00:01:30.313 --> 00:01:34.333 bored, or just because I'm getting older. 00:01:34.828 --> 00:01:41.098 And I have hopefully those around me to succeed and run the business 00:01:41.398 --> 00:01:43.648 or I'm going to sell the business. 00:01:43.948 --> 00:01:49.018 And so at any point in time, from beginning the business to wherever 00:01:49.018 --> 00:01:54.358 that decision has to be made or is made, um, you want to be fueling. 00:01:55.108 --> 00:01:59.818 The value of your company, of the business that you've spent so much 00:01:59.818 --> 00:02:06.268 time, so much effort, so much money into building, and it's a joy of your life. 00:02:06.358 --> 00:02:09.358 Hopefully it's a big accomplishment. 00:02:09.598 --> 00:02:14.668 Hopefully it's something that you're delighted to share and, um, 00:02:14.848 --> 00:02:18.838 something that you're proud to have created and potentially maybe even 00:02:18.838 --> 00:02:23.728 a legacy that you have instilled within, not just within yourself. 00:02:24.148 --> 00:02:29.728 Or your family members, but also within your employees and their families. 00:02:30.388 --> 00:02:34.438 Alright, so when we're the owner, that's the mentality that we have and that 00:02:34.438 --> 00:02:36.898 we would want to have as the owner. 00:02:36.988 --> 00:02:44.068 And the question that's gonna be asked as a potential buyer is how does the 00:02:44.308 --> 00:02:46.798 business perform without the owner? 00:02:47.878 --> 00:02:50.698 So how does the business run without you? 00:02:51.523 --> 00:02:56.412 Is the business operating with a management team, with an executive 00:02:56.412 --> 00:03:01.692 team, or is the owner involved in all aspects of decision making? 00:03:01.933 --> 00:03:08.563 Now, you've all been there before where, um, at certain points of the business, 00:03:08.563 --> 00:03:12.613 and sometimes, I know we've talked about this already, but sometimes that's 10, 00:03:12.613 --> 00:03:15.703 15 years in to owning the business. 00:03:15.942 --> 00:03:18.403 You're still very much heavily involved with. 00:03:18.972 --> 00:03:20.833 All aspects of decision making. 00:03:21.253 --> 00:03:26.382 All things come through you and all approvals go through you. 00:03:26.743 --> 00:03:34.873 And if um, some of those decisions skip you or don't make it to your desk and 00:03:34.873 --> 00:03:40.328 are made and they go poorly, you make it known that all things come through me. 00:03:41.188 --> 00:03:43.948 So there is a time for some of those things. 00:03:44.278 --> 00:03:48.238 Uh, there might be a per certain time in your business where that makes sense. 00:03:48.418 --> 00:03:54.538 There might be certain, uh, specific decisions that make sense in that way, 00:03:54.838 --> 00:03:57.478 but, uh, you're watering down the value. 00:03:58.018 --> 00:03:59.008 Of your asset. 00:03:59.428 --> 00:04:03.448 And really when you get towards the end of making the decisions to, to sell, 00:04:03.628 --> 00:04:08.158 the buyer's going to reduce a lot of value from your business if you are 00:04:08.158 --> 00:04:12.358 the only one who knows how to run it, who knows how to make the decisions. 00:04:12.928 --> 00:04:15.028 So we're gonna talk about a few things here. 00:04:16.048 --> 00:04:21.748 Um, another, another question is around the worth of your business. 00:04:21.853 --> 00:04:22.072 So. 00:04:23.248 --> 00:04:24.358 This is just another phrase. 00:04:24.358 --> 00:04:25.228 I'm just gonna read this. 00:04:25.618 --> 00:04:32.548 The business is only worth what it can make without the owner, right? 00:04:33.148 --> 00:04:40.738 So if, uh, if you're not available for one week, can the business run? 00:04:40.738 --> 00:04:40.828 What 00:04:42.868 --> 00:04:43.678 about a month? 00:04:44.368 --> 00:04:45.568 What about one year? 00:04:46.168 --> 00:04:47.488 What about three years? 00:04:48.208 --> 00:04:48.508 Right. 00:04:48.778 --> 00:04:52.948 It gets a little more difficult when we get to the, the one week for sure. 00:04:52.948 --> 00:04:54.238 I take one week off. 00:04:54.328 --> 00:04:57.898 Well, do you, are you still involved with decision making? 00:04:57.898 --> 00:05:00.058 Are you still checking emails? 00:05:00.058 --> 00:05:03.688 Are you still responding and replying to customers during that 00:05:03.688 --> 00:05:05.488 week when you're on vacation? 00:05:06.208 --> 00:05:07.108 What about that month? 00:05:07.138 --> 00:05:13.288 I would, I would bet a good portion of you have not taken a month, a solid month, 00:05:13.468 --> 00:05:16.768 four straight weeks off, um, as an owner. 00:05:17.743 --> 00:05:21.943 Then you probably can't even visualize or conceptualize what it would 00:05:21.943 --> 00:05:23.953 look like to take off a full year. 00:05:24.763 --> 00:05:28.993 And you may not want to, and that's okay because you love running the business. 00:05:28.993 --> 00:05:32.863 You love what you do, um, you love being involved. 00:05:33.522 --> 00:05:36.553 Um, but again, that's, that's a distinction. 00:05:36.673 --> 00:05:41.983 The distinction is can your business work run without you? 00:05:43.423 --> 00:05:43.723 Right. 00:05:44.143 --> 00:05:48.073 Can it run, can it make those decisions on its own without you around? 00:05:48.673 --> 00:05:51.553 Um, so here might be some scenarios you want to think of. 00:05:51.853 --> 00:05:56.143 So, and these, these are things that I've seen many, many times, 00:05:56.233 --> 00:05:57.433 uh, working with all of you. 00:05:57.823 --> 00:05:59.473 So there is no management. 00:06:00.433 --> 00:06:01.243 What does that mean? 00:06:01.723 --> 00:06:06.703 That means maybe you're a $3 million business, but the owner does everything. 00:06:06.973 --> 00:06:11.503 Maybe you're a 5, 6, 7, $8 million business and all 00:06:11.503 --> 00:06:13.903 decisions flow through you, right? 00:06:14.173 --> 00:06:17.593 There's no, when I say there's no management, this is that scenario. 00:06:17.773 --> 00:06:22.963 The no management scenario, and what that means is there's no second in command. 00:06:24.043 --> 00:06:27.763 There's, there's nobody that you've delegated and empowered 00:06:27.763 --> 00:06:29.923 to make decisions on your behalf. 00:06:31.153 --> 00:06:37.543 And in this, in this scenario, employers, employees tend to be 00:06:37.633 --> 00:06:40.273 order takers, not decision makers. 00:06:40.453 --> 00:06:44.683 So you've, you've essentially trained them through your culture, um, 00:06:44.743 --> 00:06:47.053 with, uh, with no management that. 00:06:47.923 --> 00:06:52.183 In order for me to decide on what to do with this particular customer or 00:06:52.183 --> 00:06:57.883 this particular project that I need to go through you as the owner, and so 00:06:57.883 --> 00:07:00.582 employees learn that fairly quickly. 00:07:00.853 --> 00:07:03.043 They're very, very quick to learn that. 00:07:03.342 --> 00:07:06.522 There's no point on me trying to decide, and there's no point 00:07:06.522 --> 00:07:08.113 on me trying to figure this out. 00:07:08.472 --> 00:07:11.722 I'll just go talk to Paul, and Paul will tell me what to do. 00:07:12.793 --> 00:07:16.783 And that's a, that's an order taker, um, mentality. 00:07:17.353 --> 00:07:21.643 And, uh, and maybe sometimes, especially when you get down to the lower side 00:07:21.643 --> 00:07:23.293 of the business, meaning the revenue. 00:07:23.593 --> 00:07:27.553 So we're in this, um, as if you're a startup, right? 00:07:27.553 --> 00:07:30.613 You're in this 800 K to 1.5 00:07:30.613 --> 00:07:34.903 million and even probably, maybe even up to 5 million. 00:07:35.473 --> 00:07:40.063 The owner is working 70, 80, maybe even a hundred hours a week. 00:07:40.543 --> 00:07:41.653 And, um. 00:07:42.373 --> 00:07:44.173 That lives in the no management realm. 00:07:44.443 --> 00:07:49.123 There may be some of you that are owning and running a $12 million 00:07:49.123 --> 00:07:56.143 business and spending a significant amount of time at work or on the work. 00:07:56.533 --> 00:08:01.003 Now, it doesn't mean that you can't enjoy the 70 hours and work a lot of 00:08:01.003 --> 00:08:05.863 hours towards your business, but if you are there because the business will 00:08:05.863 --> 00:08:07.783 not perform a run without you there. 00:08:08.353 --> 00:08:11.503 That's a, that's a, um, a red flag for a buyer. 00:08:11.983 --> 00:08:13.153 So here's another scenario. 00:08:13.573 --> 00:08:14.863 Weak management. 00:08:15.823 --> 00:08:18.253 So the weak management scenario, right? 00:08:18.313 --> 00:08:24.223 This is where the owner, um, is play basically playing three 00:08:24.223 --> 00:08:25.573 different executive roles. 00:08:25.573 --> 00:08:29.323 They're the CEO, they're the, the operations person. 00:08:29.353 --> 00:08:32.923 There's, they're the sales director, right? 00:08:32.982 --> 00:08:36.943 Um, and you st you may have hired. 00:08:37.468 --> 00:08:43.198 Uh, uh, what we would call a number two, uh, for some of you call it a gm, um, 00:08:43.198 --> 00:08:48.568 others would call it a president or some of you don't want to hire a president 00:08:48.568 --> 00:08:54.508 or a gm, so you call them the vp and there's not really a term after the vp. 00:08:54.508 --> 00:08:55.918 They just give them the vp. 00:08:56.518 --> 00:09:00.928 Um, and so you may have hired somebody and they've been there for a year or two 00:09:00.928 --> 00:09:06.718 or three, but the owner is still deeply involved and the owner is still deeply. 00:09:07.363 --> 00:09:12.583 Um, directing, uh, that, that, uh, number two. 00:09:13.033 --> 00:09:17.743 Um, so even the number two starts to learn that, oh, I gotta talk to Paul 00:09:18.073 --> 00:09:22.843 and before I go ahead and make any moves, I'm gonna get Paul's blessing. 00:09:22.933 --> 00:09:23.263 Right? 00:09:23.623 --> 00:09:27.913 Um, some of those things are okay, meaning you wanna, you wanna 00:09:27.913 --> 00:09:32.683 confirm and inform, um, but if the number two doesn't feel like he's. 00:09:33.313 --> 00:09:37.873 Or she is empowered or encouraged to take ownership of some aspects, 00:09:38.173 --> 00:09:39.583 then you have weak management. 00:09:40.453 --> 00:09:45.493 Um, and another part of this too, is you start to see that 00:09:46.243 --> 00:09:49.348 key customer relationships are directly tied to the owner. 00:09:50.007 --> 00:09:51.627 The owner built the relationship. 00:09:51.838 --> 00:09:56.038 The owner has known the, the customer for a really long time. 00:09:56.218 --> 00:09:59.247 They may even be good friends and they just have this type 00:09:59.247 --> 00:10:03.898 of a relationship that, um, the owner may not even wanna give up. 00:10:04.528 --> 00:10:09.568 Um, could be because they're friends, but most of the time it's 00:10:09.568 --> 00:10:15.928 because they're afraid that if they give it to the number two, that. 00:10:16.242 --> 00:10:22.303 They'll mess something up and I will lose that key customer that 00:10:22.303 --> 00:10:25.183 I've had for 10, 15 years, right? 00:10:25.483 --> 00:10:29.863 And so there's a lot of fear, um, and a lot of, a lot of white knuckling. 00:10:30.043 --> 00:10:34.573 So holding on tight, keeping the knuckles nice and white and not letting go. 00:10:35.502 --> 00:10:38.622 Um, another part of week management is there's no real 00:10:38.622 --> 00:10:39.793 documented succession plan. 00:10:40.738 --> 00:10:45.748 So may have hired the number two, but even if you talk to the number two, he, he 00:10:45.748 --> 00:10:51.088 or she doesn't really know what the path looks like when they're gonna start taking 00:10:51.088 --> 00:10:53.998 o over different aspects of the business. 00:10:54.328 --> 00:11:00.388 When the, uh, owner is gonna start, uh, reducing their own responsibilities, 00:11:00.388 --> 00:11:01.708 none of that is in place. 00:11:02.398 --> 00:11:05.668 So, uh, the third one is strong management. 00:11:05.668 --> 00:11:07.468 That's the strong management scenario. 00:11:08.308 --> 00:11:12.808 And here we've, um, we've got a business where we have some 00:11:12.808 --> 00:11:15.328 tenure in the management team. 00:11:16.438 --> 00:11:21.238 And you can call it the executive team, but this is where we've got a, we've 00:11:21.238 --> 00:11:25.079 got A-A-C-F-O or we've got A-A-A-C-O-O. 00:11:25.084 --> 00:11:28.738 And really you don't need to have the, the C terms, right? 00:11:28.917 --> 00:11:34.048 We've got a, we've got a director of finance, we've got a operations manager, 00:11:34.287 --> 00:11:37.167 we have a, we have a VP of sales. 00:11:37.527 --> 00:11:43.708 Um, and you don't even need to have those particular ones, but you've got a team of. 00:11:44.158 --> 00:11:47.248 Three, maybe four people, including the owner. 00:11:47.458 --> 00:11:52.708 So that four or five, uh, group that, that basically forms the executive team. 00:11:53.128 --> 00:11:55.198 And you have tenure within there. 00:11:55.198 --> 00:11:59.578 So you may have 10 years with a, with a particular, uh, person, 00:11:59.578 --> 00:12:03.148 maybe five or six with another, maybe three or four with another. 00:12:03.148 --> 00:12:09.388 And, uh, where we're, what we're looking at is we have some knowledge. 00:12:09.688 --> 00:12:13.468 Because we've got some tenure, we've got some new ideas because 00:12:13.468 --> 00:12:17.757 some are, are a little new to the business and they form a team. 00:12:18.298 --> 00:12:23.608 But at any point in time, if the owner steps aside or if we go back to, takes 00:12:23.608 --> 00:12:29.428 a month off, um, we're very confident that the, that those three or four can 00:12:29.488 --> 00:12:31.108 run the business without the owner. 00:12:31.708 --> 00:12:32.877 They can make decisions. 00:12:32.877 --> 00:12:36.928 They may not know all the ins and outs and history of things, and they may not make 00:12:36.928 --> 00:12:38.997 the same decision you would as the owner. 00:12:39.523 --> 00:12:41.803 They're fully capable of running the business. 00:12:42.013 --> 00:12:46.093 And in that month, when you get back on week five, the business 00:12:46.093 --> 00:12:47.773 is not gonna be outta business. 00:12:47.833 --> 00:12:48.943 You're not going bankrupt. 00:12:49.423 --> 00:12:49.723 Right. 00:12:50.233 --> 00:12:54.073 And at this point in time, because you have an executive team. 00:12:54.853 --> 00:12:59.293 It's almost outta necessity that you have to start documenting your processes. 00:12:59.833 --> 00:13:04.243 Um, only because in order for those things to work, um, you have 00:13:04.243 --> 00:13:05.623 to start communicating better. 00:13:05.953 --> 00:13:08.443 And that typically lives in different processes. 00:13:08.443 --> 00:13:11.533 And now you're starting to have a strong bench. 00:13:12.043 --> 00:13:12.253 Um. 00:13:12.668 --> 00:13:17.048 Underneath those executives who they're mentoring with and they're 00:13:17.048 --> 00:13:20.978 documenting processes, maybe even putting succession plans in for themselves. 00:13:21.098 --> 00:13:24.368 And that's starting to create a structure, right? 00:13:24.458 --> 00:13:28.238 When we're talking about, uh, key management and key leadership last 00:13:28.238 --> 00:13:33.848 week, this is that structure that really creates some asset value, a 00:13:33.848 --> 00:13:35.738 real high asset value for yourself. 00:13:36.248 --> 00:13:36.698 Um. 00:13:37.423 --> 00:13:40.753 And, uh, so then when we're going to have a couple more things I 00:13:40.753 --> 00:13:44.533 wanna talk about, which is, uh, what I just call the buyer's delight. 00:13:44.983 --> 00:13:51.703 So when, when the buyer walks into your house and sees that it's clean, um, 00:13:51.913 --> 00:13:58.243 that it's bright, that, um, it's well kept, and they can tell that not only 00:13:58.243 --> 00:14:03.133 is it well kept, but it's been well maintained and the furnace looks clean. 00:14:03.523 --> 00:14:05.203 And how old is this furnace? 00:14:05.203 --> 00:14:08.143 Well, uh, it's, it's six, seven years old. 00:14:08.323 --> 00:14:08.683 Wow. 00:14:08.683 --> 00:14:10.483 It looks like it's brand new, right? 00:14:10.992 --> 00:14:16.063 Uh, the appliances are nice, or maybe the, the appliances are replaced because we 00:14:16.063 --> 00:14:22.242 value, um, having a nice house and a nice home, even if we're not selling it right. 00:14:22.513 --> 00:14:23.863 That's a buyer's delight. 00:14:23.863 --> 00:14:26.653 They walk in, they're like, oh, I love this place. 00:14:26.653 --> 00:14:27.283 I love it. 00:14:27.313 --> 00:14:29.923 I wanna, I'm willing to pay. 00:14:30.328 --> 00:14:31.558 For this home. 00:14:32.007 --> 00:14:33.448 So that's the buyer's delight. 00:14:33.928 --> 00:14:38.308 And so some of these, some of these tests, I always call them tests, but 00:14:38.308 --> 00:14:43.647 from a, from a buyer's perspective, uh, if they get to hear that, the owner 00:14:43.647 --> 00:14:48.267 says, you know, honestly, um, I'm bored. 00:14:49.288 --> 00:14:51.058 The team basically runs everything. 00:14:51.538 --> 00:14:54.238 Um, I've accomplished what I want to accomplish. 00:14:54.777 --> 00:14:59.367 Um, I've set the vision and the vision has played out and. 00:15:00.133 --> 00:15:06.373 Um, the team is actually much stronger together, um, than anything that I can do. 00:15:06.643 --> 00:15:10.843 And they're, they have way different visions, different innovations, and 00:15:10.843 --> 00:15:14.503 they're moving this company beyond what I could have ever possibly dreamed. 00:15:15.433 --> 00:15:18.103 That's buyer's delight, right? 00:15:18.373 --> 00:15:23.893 Another part of, uh, the board test is the owner's taking some time off, right? 00:15:23.923 --> 00:15:26.808 They're taking six plus weeks off annually. 00:15:27.448 --> 00:15:29.008 Uh, have a client of mine. 00:15:29.398 --> 00:15:33.118 We were going through that, um, and just kind of reflecting and he's 00:15:33.118 --> 00:15:38.398 like, you know, one of those years we talked about sabbaticals and I 00:15:38.398 --> 00:15:41.938 was able to take off 15 weeks, right? 00:15:41.938 --> 00:15:43.708 16 weeks, I think One year. 00:15:43.708 --> 00:15:46.198 Even got up to maybe 18 weeks. 00:15:46.588 --> 00:15:50.338 Um, is he, uh, absent from running the business? 00:15:50.338 --> 00:15:51.628 No, not at all. 00:15:51.688 --> 00:15:53.188 He owns the business. 00:15:53.248 --> 00:15:54.328 He governs. 00:15:54.703 --> 00:15:58.453 The business, but it, uh, that's a different mindset 00:15:58.453 --> 00:16:00.703 than running the business. 00:16:01.273 --> 00:16:03.523 And, uh, and it's totally doable. 00:16:03.973 --> 00:16:08.203 Um, and I'll tell you, I know I've, I'm calling this the board test. 00:16:08.383 --> 00:16:09.283 He's not bored. 00:16:09.403 --> 00:16:13.183 He's loving it way more than when he was running it, even though 00:16:13.183 --> 00:16:17.413 he's skeptical that he could govern the business and not run it. 00:16:17.743 --> 00:16:20.173 So, uh, these things are possible. 00:16:20.683 --> 00:16:26.983 And, um, and in the those cases, uh, the owner is able to focus on key 00:16:26.983 --> 00:16:32.533 strategic initiatives and to be able to think and network and talk about these 00:16:32.533 --> 00:16:40.268 things and move the company, um, 2, 3, 4 factors forward than they ever could 00:16:40.268 --> 00:16:42.343 if they were in the daily operations. 00:16:42.492 --> 00:16:43.363 Again, buyers delight. 00:16:44.428 --> 00:16:48.778 So I already talked about this a little bit, but long tenure and a deep bench. 00:16:49.228 --> 00:16:54.628 So when you've got tenure inside your, um, your management team, 00:16:54.628 --> 00:17:02.428 your executive team, and tenure is not always about 30, 20 plus years. 00:17:02.488 --> 00:17:06.387 It's more in that sweet, sweet spot, which is more like. 00:17:07.168 --> 00:17:08.967 Eight to 12 years. 00:17:09.447 --> 00:17:15.448 Um, even when you get to 15 years, that's starting to get, um, a little too long. 00:17:15.538 --> 00:17:20.218 Meaning, um, from a buyer's perspective, if you've already been here for 15 00:17:20.218 --> 00:17:26.428 years, I'm wondering, uh, if the, when the owner leaves, when I buy, are 00:17:26.428 --> 00:17:32.188 you going to step out because you've been here so long and the the, um. 00:17:32.803 --> 00:17:37.092 The change in leadership, or maybe you're just ready to move on, right? 00:17:37.092 --> 00:17:41.863 But if you're in that eight to 12 years, um, I have more confidence that you're 00:17:41.863 --> 00:17:47.293 gonna stick in it, um, with me as the new owner and we're gonna go places. 00:17:47.983 --> 00:17:52.363 Um, and then another one about the deep bench is, um, you're 00:17:52.363 --> 00:17:54.883 looking to have two or three. 00:17:55.213 --> 00:17:59.803 Direct reports under each one of those managers that you have an, that you 00:17:59.803 --> 00:18:04.183 know that again, as the owner that could step up and take those spots. 00:18:04.303 --> 00:18:05.023 Do they have to? 00:18:05.053 --> 00:18:06.763 No, but we're grooming them. 00:18:06.883 --> 00:18:07.843 We're mentoring them. 00:18:07.843 --> 00:18:11.743 We're training them, and we have a nice deep bench long tenure 00:18:12.073 --> 00:18:14.383 that is high value to a buyer. 00:18:15.043 --> 00:18:18.312 So we've already talked about this, documented and transferring knowledge. 00:18:18.643 --> 00:18:19.483 That looks like. 00:18:19.483 --> 00:18:20.203 What does that look like? 00:18:20.233 --> 00:18:23.743 It looks like playbooks ownership, o or not ownership. 00:18:23.773 --> 00:18:27.103 Operation manuals, process documentation. 00:18:27.103 --> 00:18:28.668 It doesn't mean a thick. 00:18:29.368 --> 00:18:33.058 Big binder of 30 binders on how to run the business. 00:18:33.238 --> 00:18:37.558 But it is direction and it is visual, and it is transparent. 00:18:38.068 --> 00:18:38.398 Right? 00:18:38.398 --> 00:18:42.088 And those are the playbooks on how the business runs regardless of the people. 00:18:42.358 --> 00:18:46.498 It, it establishes the roles, establishes the processes within 00:18:46.498 --> 00:18:51.028 the roles, and then establishes the processes between the roles, the 00:18:51.028 --> 00:18:53.278 interactions over the actions, as we say. 00:18:53.698 --> 00:18:53.998 Right? 00:18:54.358 --> 00:18:56.458 Um, there's likely a CRM. 00:18:56.998 --> 00:19:00.298 That has detailed customer history, very important. 00:19:00.868 --> 00:19:04.858 Um, you have regular training programs for new employees as part 00:19:04.858 --> 00:19:11.518 of onboarding, but also as part of ongoing training for all employees. 00:19:11.908 --> 00:19:15.358 Um, that could be on the management side, could be on the strategic 00:19:15.358 --> 00:19:20.908 side, could be in the tactical side of how we do the work and, um. 00:19:22.378 --> 00:19:25.438 So when you have all of those things, you know, the buyer 00:19:25.438 --> 00:19:29.338 knows that you have systems over people for critical functions. 00:19:29.338 --> 00:19:30.238 And what does that mean? 00:19:30.478 --> 00:19:35.458 That means I still value Paul as the vp, but I know that behind Paul are 00:19:35.788 --> 00:19:42.238 well documented processes and playbooks, and that is how I know that this system 00:19:42.238 --> 00:19:46.378 is going to run, meaning this business is going to run regardless of Paul. 00:19:46.768 --> 00:19:48.898 Not that I'm discounting Paul, but. 00:19:49.158 --> 00:19:53.808 Again, I'm looking to mitigate my risk as the buyer and as an owner 00:19:53.957 --> 00:19:55.277 you should be doing the same thing. 00:19:55.638 --> 00:20:00.678 It's very, very valid for you as well as the owner that if Paul leaves and 00:20:00.678 --> 00:20:04.128 we don't have those things documented, those playbooks there, uh, then I 00:20:04.128 --> 00:20:09.197 have valued Paul over my systems and processes and we wanna reverse that. 00:20:09.828 --> 00:20:13.937 Um, alright, so then the last thing is leadership has skin in the game. 00:20:14.237 --> 00:20:18.678 So again, buyer's delight knows that I've got some long tenure. 00:20:19.062 --> 00:20:20.082 I got a deep bench. 00:20:20.082 --> 00:20:23.233 I've got an owner who's just focused on strategic initiatives. 00:20:23.533 --> 00:20:26.743 I've got documentations and transfer knowledge in place. 00:20:26.953 --> 00:20:29.623 I've got the playbooks, I have systems over people. 00:20:30.193 --> 00:20:36.223 Um, but now I have some of those key employees that we talked about last week. 00:20:36.463 --> 00:20:41.293 They also have some kind of profit share May, they may even have equity. 00:20:41.683 --> 00:20:45.823 Although I, I tend to, uh, try to reduce the amount of equity 00:20:45.823 --> 00:20:47.593 as owners as, as an advice. 00:20:47.683 --> 00:20:54.613 Um, you built it, you put the sweat equity in it, you, um, put your family into it. 00:20:54.973 --> 00:20:58.213 Um, you took the risk, you put the money in. 00:20:58.603 --> 00:21:01.783 Um, keep as much equity as you can, is my philosophy. 00:21:02.113 --> 00:21:04.813 Um, but you can definitely get through that with key employees, 00:21:04.813 --> 00:21:07.123 with profit shares and different um. 00:21:07.813 --> 00:21:10.423 Types of compensation plans for sure. 00:21:10.933 --> 00:21:15.013 Um, there could be some retention bonuses maybe that, that are built 00:21:15.013 --> 00:21:20.413 into, uh, any kind of deal, um, as far as a, a purchase or an m and a. 00:21:20.923 --> 00:21:25.453 Um, and then the other thing too is when leadership has skin in the game, 00:21:25.453 --> 00:21:27.283 they're excited about new ownership. 00:21:27.463 --> 00:21:27.793 Right? 00:21:28.213 --> 00:21:30.373 Um, they don't see it as a, as a bad thing. 00:21:30.373 --> 00:21:32.418 They don't see it as a, as, um. 00:21:33.267 --> 00:21:37.467 As something that's going to be a detriment to them, either personally 00:21:37.467 --> 00:21:39.598 or their careers or to the company. 00:21:39.957 --> 00:21:41.997 They're excited because why? 00:21:42.207 --> 00:21:44.098 Because we know how things are running. 00:21:44.308 --> 00:21:47.818 We, we are excited about, um, bringing somebody in. 00:21:48.728 --> 00:21:52.478 And seeing what kind of ideas they have and how they affect our systems 00:21:52.478 --> 00:21:54.758 and processes and let's go forward. 00:21:54.968 --> 00:21:59.648 There's so many fun things that involve with, uh, new energy, new people, 00:22:00.098 --> 00:22:03.128 um, within any kind of structure that we have, either that's at the, 00:22:03.548 --> 00:22:07.988 at the team level, at the management or executive level, or even lives 00:22:07.993 --> 00:22:09.518 up in the ownership level as well. 00:22:09.998 --> 00:22:11.978 So anyway, this is the last. 00:22:12.882 --> 00:22:19.033 Evaluator, um, it's the one that you wanna be thinking about for yourself, 00:22:19.303 --> 00:22:24.612 maybe even kinda recommend or encourage you to think of it a little selfishly. 00:22:25.213 --> 00:22:30.312 Um, and some of you do have a hard time of thinking of it selfishly, but really 00:22:30.312 --> 00:22:33.763 put it, put it into the frame of you. 00:22:34.303 --> 00:22:36.497 What do you get out of, um. 00:22:37.453 --> 00:22:40.543 Spending some time away from, from the business. 00:22:40.873 --> 00:22:47.233 What do you get by, um, bringing on one or two new executives, mentoring and guiding 00:22:47.233 --> 00:22:50.263 them and letting them run the business? 00:22:50.353 --> 00:22:52.993 They'll make different decisions that you ever would've made. 00:22:53.323 --> 00:22:55.963 They'll make, uh, they'll take the business in different 00:22:55.963 --> 00:22:58.783 directions and let that be okay. 00:22:58.873 --> 00:23:01.843 Of course, you govern and you keep them. 00:23:02.563 --> 00:23:05.053 Uh, within some specific boundaries. 00:23:05.443 --> 00:23:10.633 Um, but those are things that, uh, for yourselves you can gain a lot 00:23:10.633 --> 00:23:17.233 more understanding and, um, enjoyment after of just owning a business. 00:23:17.503 --> 00:23:20.623 Uh, it's a new level, it's an elevation for you as an owner, 00:23:21.043 --> 00:23:25.213 and I would encourage you to be thinking of that sooner than later. 00:23:25.333 --> 00:23:26.683 You can't, um, time. 00:23:27.538 --> 00:23:29.818 Is fleeting time, can't get it back. 00:23:30.058 --> 00:23:32.578 So the sooner you start it, the better off you'll be. 00:23:33.058 --> 00:23:36.568 And, uh, looking forward to hear some comments from you guys. 00:23:37.017 --> 00:23:41.338 Uh, I've already got some awesome feedback from, uh, the different valuations. 00:23:41.338 --> 00:23:45.527 A lot of people were responding back on, the corporate structure. 00:23:45.677 --> 00:23:47.477 A lot of things on right to win. 00:23:47.907 --> 00:23:49.347 good conversations on that. 00:23:49.347 --> 00:23:53.437 So always reach out to me, send me an email, reach out on LinkedIn 00:23:54.007 --> 00:23:55.997 and, We'll get back with you later. 00:23:56.507 --> 00:23:56.987 Thank you. 00:23:56.987 --> 00:23:57.467 Bye.