In this episode - I interview Steve Storkan and their approach at EOX, an organization founded out of the NCEO to develop state employee ownership educational resources to support companies considering ESOP as an option. Their approach is in response to research that shows - states with education on ESOPs have a lot more ESOP companies. Steve has an interesting ESOP background and leading the initiative to have more state centers throughout the U.S.
In this episode - I interview Steve Storkan and their approach at EOX, an organization founded out of the NCEO to develop state employee ownership educational resources to support companies considering ESOP as an option. Their approach is in response to research that shows - states with education on ESOPs have a lot more ESOP companies. Steve has an interesting ESOP background and leading the initiative to have more state centers throughout the U.S.
[0:10] Hey everyone welcome this is the ESOP guy and we are on a journey to an ESOP this season of season 5 so we're calling it journey to an ESOP and Beyond, very excited to um go through this topic today because uh 1 of the things that we we do run into throughout the ESOP Community there are multiple resources for, for folks to get information of course the podcast is here but there are other resources that I think are really helpful and so part of our job, in educating people about esops is related to kind of educate them about the resources that exist in the community and so today we're going to get to talk to Steve storken, who is the executive director of eox and really understand what their resources and how they fit into all of the different resources that are available to companies to really consider and help them understand Employee Stock ownership plans.
So with all that Steve Welcome to our podcast for the first time thanks for having me I really appreciate it uh being fun to talk.
[1:09] So um Steve can you tell us a little bit about like first off how do you got into the ESOP world I mean a lot of companies and and individuals you know they got into esops in different ways how did you get started.
[1:22] Yeah I think we all stumbled into this I don't know anybody who came into the ESOP uh Arena knowing what they were getting into um I spent uh 23 years or so, as a third party administrator uh in the midwest I was headquartered out of Minneapolis Minnesota and um by the time I was done uh we had about 50 esops that we were the third party administrator for, um but my main role besides running the third party Administration uh group where we had 5 or 6 employees was we were inside of the banking channel so I started, uh my own small business is a third party administrator we were purchased by uh a regional bank and then that was purchased by another 1 and so my career I spent a lot of my career in the banking Channel.
And what I was doing was I was going alongside the trusted advisor so the the bankers who had clients business clients um so many as you know so many business clients depend on a trusted adviser whether that be an attorney.
[2:18] Uh CPA or their major and so I was the guy that they would take out and say hey this is Steve he'll tell you about esops, hi if you're ever interested in exit plan or even a business growth tool let them call you about it and uh oh by the way our bank does a lot of ESOP work we lend we do third party Administration so.
Uh I spent a ton of time doing that um felt absolutely in love with the first ESOP I ever came encountered with at in 1996.
Became deeply involved in the Minnesota chapter Minnesota Dakota's chapter of the ESOP Association has a volunteer and just um yeah employee ownership has been my life for the last.
[2:53] While we're almost at 30 years now so uh wow goes fast it goes fast doesn't it it goes fast yeah it goes way too fast yeah.
Um as we get started real quick 1 of the things I like to do is we invite people into the podcast is like tell us your favorite movie and and why.
[3:10] Yeah my favorite movie I I can't think of the last time I went to a movie theater so, don't have an answer for that um I think my wife wants me to say it's the Barbie movie but no no seen it because I have not seen it yet she continues to try to get me to see it but uh I think I'm more of a series guy I guess the the thing I could think of the last great movie per se is the Yellowstone series that really got me sucked in well I got a lot of people are into, wasn't that it could have been should have been a movie but yeah the Yellowstone Series has got me hooked so that's pretty cool that's that's probably me awesome great, well so as you started out your career in esops um you know the eox as you sit there and think about like what is eox and then how did you get involved in starting up.
[3:55] This organization yeah so ux stands for the employee ownership expansion Network.
Uh it was an idea uh inside of the national Center for employee ownership for so an idea inside of n CEO, I was working obviously very closely with n CEO and ESOP Association that whole entire world but I had no idea that this was going on inside of n CEO, and so between Lauren and Corey and Tim and all the folks at ncel they established a um task force and the task force mission was to find out.
Why is it that Vermont and Ohio have the highest per capita.
Concentration of esops or you know some of the highest if not the highest and they just happen to have the longest standing State Centers for employee ownership there has to be a connection there and if there is a connection there.
How do we make sure that we can create more than 7 State Centers for employ ownership because back then in 201415 uh there were only 7 State Centers and so that task force was put together to figure that out, and the first thing they did was first of all they realized yes State Centers are uh vital to this.
[5:02] And then secondly they established the Pennsylvania Center for employee ownership so a couple people on the task force, or from the Philadelphia area um they started you know Jim Styer and Ken Baker uh helped start the Pennsylvania Center brought employee on companies together with service providers to get funding, and the CEO had a bit to do with that and they started the Pennsylvania Center just decided you know let's see what this is how do we start a state center what should a state center do, uh and from there um you know I can get into more history of what that was but that was really the start of eux eux did not exist at that time it was inside of the ncu that's pretty cool like that's exciting that they would, see a need and then just say you know what we're going to Branch out and have that need met.
1 of the statistics that floats around is like how many ESOP companies are in the country I kind of always tell people it's about 7,000 I don't know if that's.
More or less right now what would you say like how many actual ESOP companies are there right now in the United States.
[6:02] You know they go back and forth um I think the the latest data that I've seen is you know somewhere in that 640063 yeah and then and what's shocking about that I think hopefully it is shocking to people like.
You know millions of businesses all over the country right that could be an ESOP.
Um art right so it's a very small fraction of what really could exist and I think what is interesting about what you said too is we have concentrations in different states like Ohio and Vermont.
Um and it's got to be like intuitively because those states are educating people.
[6:38] Exactly yeah I did the math once for a presentation and my maths says that 0 1.
9.1 but 0 1% of all businesses that have more than 1 employee so all non sole proprietorships, 001 percent of them are esops which is just absolutely crazy to me you know you've been in the business a long time I have and we think of this is this you know this.
[7:02] Wonderful and it is a wonderful community and everybody does this and we are such a small little minute part of the business World which is unfortunate but, it's also why ux and the state center Network exists um I am convinced that the number 1 reason, that there are more esops or more employee owned companies is the lack of education and Outreach and the myths around them so both the education and the wrong education.
And that's what eux was created to do so that task force inside of nceo they saw the success of the Pennsylvania Center they saw um, big opportunity and that task force ended up forming you know this its own nonprofit uh July 4th 2018, uh in our our country's birthplace it wasn't you know it wasn't a coincidence it was July 4th in Philadelphia we incorporated and then uh I was hired on January 1st of 2019.
And I was drawn to the organization 1 I was looking for a change but a long time is a third party administrator but it was just this new challenge, and really letting me do what I love to do which is preached the gospel of employee ownership and do it across the entire country.
Um so it's been 5 years now we hit our fifth year anniversary of my higher anyway uh a couple weeks ago on January 1st of 2024.
And uh at this point today as we speak there are 21 State Centers across the country uh We've helped to open you take the 7 that started at Pennsylvania you get 8.
[8:32] And uh in the 5 years eox has helped to open 13 other State Centers across the country wow so we've made some significant progress uh even during Co so I'm pretty proud of that that's a lot of yeah that's a lot of work I mean and a lot done in in a few years really only 5 years goes by we all know it goes by very fast.
[8:48] Yeah for sure you know and and I want to talk about like exactly what eox State Centers do let me ask you like if somebody just comes right off the.
You know you meet him in an elevator or you meet him at somewhere and they're like hey why should I even be an ESOP what would you say what would be your answer to that question.
[9:04] So from a business owner's standpoint I always start with the Legacy stat the Legacy the Legacy side of it, um Legacy might be overused word I met with a business owner and used that and he said Ah that's BS so you know you're using the wrong word I understand what you're saying but you know you're using the wrong word and so I haven't come up with a better word but to me Legacy is the word, um a business owner who wants to keep what he.
And his business partners his wife her husband maybe their grandparents or their parents it's been built it's it's something that they have put their heart and soul into.
And I would submit that 99% of business owners care.
About what happened to that especially the ones that are in the exit planning stage right now if you think about businesses.
That were created a while ago that even on first generation but second third generation they weren't thinking about starting a business scaling it up selling it going and doing something new that that wasn't a concept as far as I know sure so all of these business owners that's what I tell them employee ownership in esops are a way for you to ensure that what you built.
[10:12] If you built a good company and you have a good management team that what you built can almost be guaranteed that it will continue.
And probably will be improved because you've given the keys to your employees so here you built this great thing.
It can be improved and you can look back 5 1015 years ago you know what Johnson Johnson manufacturing still looks like Johnson manufacturing um.
[10:34] Quick story I had a a woman in Wisconsin uh in a when I was back doing my job uh as a third party administrator with the 1 of my Bankers she was just.
[10:43] Inside herself that if they sold their business.
She wanted to be able to still come to that small community uh during the summer they winter in Florida but she couldn't imagine coming back to that Community if she had sold to somebody else who had closed the.
She said I couldn't even go to the grocery store I'm sure people would be talking behind my back like well they you know they got millions and look what they did to our community so I I never forget that that was early in my career I never forget that story and I share that story with business owners all the time I think it resonates, yeah now that's a really good story because that's that's really what happens is people are considering the opportunities they have.
And I think when people really start to dive into what they want to get out of selling their company.
[11:25] You know 1 aspect of that is going to be the multiple or the the valuation right.
For most people it's really not the whole thing especially if they've you know they've accumulated wealth, you know and a lot of people I work with are going to just say look it's not the most of course it's important but it's not the most important thing you know but taking care of my community my people building a you know the uh consistency with my culture, and and knowing my employees don't have this huge disruption of of what's going to happen next.
[11:54] Um there's a lot there's a lot of good reasons but I like I like that question for you and for all of us to say because that's something that when people listen to this they are thinking like well why should I even do this what's you know what's what's the truth you know behind it all.
[12:07] Um and and I think um I think the other you know I think a lot of times we lead with tax benefits as well and and that's the second thing for me is I, I just say look all that stuff I just told you about you know Legacy exiting on your own we didn't talk about that exiting on your own timeline not selling 100% of it I mean all of that that that goes with that kind of special type of sale, then we can start talking about tax benefits and oh by the way there are these tax benefits to you tax benefits to the company, I think a lot of times people lead with the tax benefits or lead with the details we got to leave with the story The feel-good, and you know some people will just be like no that's that's that's not me I I want the highest valuation I just want to get out um although I tell you I talked to somebody yesterday uh husband and wife, um who either came into the conversation thinking you know how can I get my son involved in the business how can I have a couple key managers and um you know, maybe we'll just sell because you know my son can go off and do something else by the time we were done telling that story they kind of we're going to talk again so it was a successful call where you kind of lead with that, what let's dig into what you really want to do with this what what's important to you and it wasn't.
It wasn't the valuation know and I think we we think it is right I very rarely is it the valuation we don't yeah I mean we we do think it sometimes people think it is especially because there's a similarity with ESOP transactions and m&a transactions and and people ask me like should I do this or that I'm like like.
[13:35] You know if you're really geared towards a highest multiple then go towards an m&a transaction.
[13:41] But esops are like I think it I get they get convoluted like people start getting like wrapped up and in my opinion it's apples and oranges, because you're going to accomplish different things with an ESOP you might accomplish some of the same things but they're going to be different and you need to know what you really want at the end of the day um, and you maybe you do discover that on your journey to whatever Direction you go um but typically I find.
It's not like let me run 2 parallel paths and I'll take the best option it's I'm really going to go for an ESOP that because I've done my homework you know yeah that's exactly fine.
[14:19] So unfortunately um employee ownership is not on the table that that's that's that's the biggest issue in my mind yeah is that people know about m&a they know about transfer to a family member, um you know they know about third-party sale whether you know m&a or not but just you know they know all of those um.
We need employee ownership to be in the room where it happens to you know go back to a Hamilton reference you know that yeah we need it to be in a report we need to be in the room where it happens we have to be able to at least give them that option that's true yeah we're not we're not even we're not even in the same block most of the time.
Know I know you're right and that's and that's and I think partly too it's in in the resource and I'm going to segue into the EOS because the resources that people listen to.
There is we all know that there is a lot of money to be made in the m&a world you know, and I think there's still you know with the ESOP world too as we as we differentiate between who is telling you what you have to peel it back and ask the question like who is telling me this, and I know for you guys and this is really the mission on the podcast is to be completely unbiased like this is like trying to be like this is the absolute place where we can just say, this is information you can rely on you know um so with that eox is really a place where you know you guys educate people right and these different state centers on, they're thinking about being an ESOP how how do you guys keep yourself unbiased I guess that's the question and and and talk through that a little bit.
[15:45] Yeah so eux our mission is to significantly expand employee ownership by creating and supporting a network of State Centers, um so our main mission while I do a lot of um meetings like I did yesterday with business owners who call me, um that see something someone get hold of me um my main mission is to make sure that a state center is created that I helped it get up and launched faster than they could do on their own, um get them all best practices and and create a network so we can all have share best practices and those best practices.
Uh are in 2 different ways I I talked about the Hub and spoke you know the the B the state centers are how first of all there are hub for outreach and education, um we go where uh service providers and others in the employee ownership sphere may not be welcomed which would be an economic development conference, uh Chamber of Commerce conference uh Chamber of Commerce meeting uh a trade Association anywhere that we can go where there's a built-in audience, uh we will go talk to 5 or 5,000 people about all 3 forms of employee ownership esops worker cooperatives and employee ownership.
[16:54] And so each of the 13 centers that are under under us and and they're all independent but as a network that we helped create we take a lot of great care of them um all of them have a focus.
First of all on Outreach Of Education.
[17:08] And whenever they then run into someone who knows a business owner or there is a business owner.
That then contacts them or that they can get a connection with they become the second Hub which is the hub for resources.
[17:22] So they come into a state center uh they do an intake with the state center director a consultation and it's at that point during 45 minute hour long conversation we gather all of the information that we think we need to help them on their Journey, so that when they do get connected to the resource and the state center will try to connect them with a local resource so if they go to the Minnesota Center we've got a group of you know 20 or so service providers that have been supportive of us that we trust, that we know will do a great job, we try to keep that in Minnesota company working with Minnesota service providers now we also have a national network so we have this whole network that they can connect them to those resources.
But we're not just going to say here's all the resources we know by the end of that conversation path that they probably should go on, um they're asking a lot about the valuation of a company how is my company going to be valid do you have any idea what my company's worth if that's all they talk about sure well sending them to an ESOP attorney to talk about the transaction isn't going to get us down the road very far so why don't we send them to a couple of the ESOP valuation firms that we know let them choose which of the firms they want to work with and then, stay with them and that's the other thing that the state center does they're not going to be the quarterback of a deal they're not going to be the investment banker they just are going to be there to make sure that that business owner is being taken care of and can ask questions that they may not ask of a service provider because they think it's.
Uh you know a dumb question or maybe they're questioning what a service provider says to them or.
[18:49] Why is he talking about this why is she telling me this so it's really taking them from beginning to end to try to make sure that we can have a successful transaction.
[18:58] Now I think that's important and finding information like that I know for people it's hard sometimes because they're weeding through you know a lot of.
[19:07] You know there's a lot of information out there right we all know that if you Google esops you're going to get you know.
People that have advertised on Google right the first 1 that comes I'm not going to say it but you know exactly where you're going to go and you know there's a there's a combination of like how do I trust that versus this.
Um I think even in our ESOP community and you can kind of I mean my this is kind of a question and a comment you know there are service providers that have.
A direct axe to grind to like hey I want to sell you this like this thing this this like this called the 1042 you got to get a 1042 or and I had a I had a client meeting this this past week where the company was working with somebody and is immediately you got to have a 1042 and we're going to change it from an S to a c and I asked the question I'm like.
Uh you know do they do an analysis between an S and a c and compare the 2 or do they just say you got to have a 1042 and b a c.
And that and that's where I get a little bit like, wanting to help people to ask the right questions I'm not trying to say anything negative about anybody but I want the people listening to say like maybe I should do a deeper analysis because I may not want to have the CCP 1042 that may not be what I want but I didn't know there was an option right so do you see that in in the world that you live in with like, trying to help people get that real unbiased information so you guys the company we just want the company to do the best it can as an ESOP.
[20:34] Yeah ultimately you you hit the nail on the head that is what the state center wants is it wants wants the transaction to be the right transaction for the customer even if it ends up not being employee ownership that we go down that path and then all of a sudden they're just like you know what, we've done all this we've looked at it thank you for sharing all of that but after doing all this I think we're going to go down this path now we don't necessarily try to push them that way we try to make sure they have all the information, then when they do go and get the service providers I think we're very confident in those um, in those service providers and technical assistance providers that work with us and our involved in our advisory committee is an involved in the state center, it's been pretty fun to see that the ones that continue to support the center both financially and more importantly, opening up their Network helping us find places to do uh networking events or you know educational events um just always being around the center.
[21:34] They're all this all the service providers of all of us want to work with anyway, um it's that same core and we get some new ones as well that want to start so we haven't had that problem of of having someone come back and say boy I don't know I'm questioning this but I think we do a really nice job in the state center level of.
[21:50] Putting them into the right places and pointing them in the right direction so no I think that's helpful and I like that you guys look at.
The cooperatives and eots just because I've had I've had clients be like I think I'm going to do an ESOP and I've got a good relationship with the eot people I'm like you're probably better off as an eot because of the factors that you're thinking about and so.
It goes both you know goes a different ways but I think a lot of times people are Esa I mean I'm an ESOP podcaster so that's of course I'm talking about esops but I also want to be careful to say maybe you are better off as a Cooperative or any OT.
Um you know because ultimately they I just want them to be in the right at the end of the deal like I want them to be where they really want to be and it's.
Education and knowledge of pros and cons that help walk them through that um and again not having an axe to grind just really wanting this to be the best thing so.
An eot could be a good option so I mean I don't know how often that happens for you guys I mean I know esops probably a lot more popular than something like that um but kind of speak to that a little bit where you see that kind of.
In in the beginning they're asking questions with your spoke you're saying all right now I've got a resource in their in their asking for that how do you guys guide them through a non- ESOP situation.
[23:07] Yeah 1 of the surprising things to me in the first 5 years.
Is that I'll call it esopo that's the term I use I don't know if it's a real term or if I'm the first 1 to use it but he's stoppable I like it I'm gonna write down.
A couple I we don't have the statistics yet but just in general approximately 60 to.
[23:30] That might be overshooting let's just say 65% of the companies that actually come to a center and actually do an intake form.
Um and work with us well over 50% of them are not of the size and the revenue to be an ESOP and so I consider them not as Supple so I need.
Uh another form of employee ownership to point them in and right now worker cooperatives uh employee ownership trust or eots are are the other forms other than maybe you know can we help them with a management buyout that could turn into a new down the road if we introduce the concept, um the other thing that those businesses are that we're really looking hard on is is there is there an ESOP.
That is in the same industry or that's looking to acquire a company so if I've got a drywall company that comes in that has.
2530 uh workers and just doesn't have the revenue nor maybe the participant count payroll you know it's kind of on that Fringe um.
[24:28] Is there a ESOP company and the construction business that I can introduce them to to and that's a real story that you know it didn't happen I don't know we've got to check back in with them.
But yeah those are the kinds of solutions that we're trying to provide so that we can keep companies local keep them open I mean that's that's also the part you know.
Something we haven't talked about which is you know we believe that employee owners should have been all forms helps communities, cross the country helps you know it helps every single worker no matter you know where they came from their High School their their education uh their background their color their skin I mean, and that whole socioeconomic status um we just want to, make sure that these jobs are still there and so we do have resources on worker cooperatives and eots and we spend a lot of time working with that.
[25:14] The other side of that is and there's really no way to quantify this except for the 5500 count.
[25:22] We know that our message is being delivered.
Um you know we know that people are hearing it but I think is happening is that people are hearing about employee ownership it's reminding them that they may have known a little bit about it they should go out and do research and they're bringing in their own advisors.
[25:41] Who don't know anything about it he stops but then help find another so they're not coming through the center they don't feel like they need someone to hold their hand I'm trying to fix that so we we realize make them realize look come to us we'll still let you you know you still have your advisor and all of that but um just a quick anecdote just to end that answer is that.
Um the Pennsylvania Center I think has been around since 2016 uh so 7 8 years now, the last count they went from being 14th or 15th in the country in the creation of esops to second with the 2021 ESOP data wow um but Kevin in Pennsylvania can look at that list of all the new esops, and he can tell you you know there are a lot of them on that list that he's never even talked to.
Um but something's happening in Pennsylvania and that's what I can point to is it's got to be related to um a lot of different things but I'm sure the Pennsylvania Center has a lot to.
[26:34] Yeah no I mean for sure right and we know there's a correlation between.
Like we talked about Vermont Ohio Pennsylvania this is working like people because they're they're constantly intentionally talking about the con the story of an ESOP and then.
People come I think too it's Word of Mouth like yeah the company did it and then they told their buddy who has another company I think that's that's a huge part of it um.
You know I think going through advisors that don't understand esops that's where the barrier is I think for the most part yes because who are people are going to listen to if their CPA right and like CPA doesn't know anybody esops they're going to be like I don't really think it's a good option for you, that's the worst thing that can happen like because then it's dead for the most part.
Um but but that's why we have to all be talking about it as much as we can um when you talk about ESO I like the word.
Um and it's hard because I mean everybody's going to say what what.
[27:28] You know as they listen am I too small to be an ESOP you know or you know yeah what does that mean and and I know I'm going to say you're going to say it depends right all the factors.
Um so but kind of like if you talked about um revenue and EBA where would you draw the line if they were because because I did I did a client I did somebody in North Carolina it was 10 person company.
[27:51] They were in escorp they were only to million dollars of Revenue.
[27:55] And we had about about a million and a half they were very profitable on a million and a half million a million and a half IBA so it was very small company I converted them to a C Corp.
Uh we went through we haven't had we've got Bank financing on it too which was even more interesting but um so that's like what the smallest deal I've done so I'm just curious like because I I do think part of our mission is to open the door for sometimes like.
How could that deal get done where some people would say no way if it's not this whatever so how would you answer that like size question because I think that's that's on people's minds all the time.
[28:30] Yeah and coming from the third party or coming from the um service provider industry you know drawing that Line in the Sand nobody wants to and so I always laugh at someone wants to draw the line because I know someone's going to call me and tell me I'm crazy but here's my line, My Line in the Sand is somewhere between 30 and 40 employees well what makes what makes a good s a good Esa can we do it for lower yes but if I had to draw a line in the sand I would draw a line in the sand around 30 to 35, employees and somewhere around in a million to a million and a half in net profit or IBA that's the line that I've drawn to say you know this is a very.
Luce line but if I had to draw a line that's where I draw it but then I followed up with this and I don't know how many people followed up but coming from my third party Administration days I always have to throw this in there.
[29:15] To me the more important thing is to look at the size of your payroll compared to the value of your company that's a good point so.
If we have a very large payroll and people who have you know a lot of the same you know it's not a significantly different.
Starts payroll where we've got 4 or 5 people making lots and lots of money and then and then the other 25 knot but if you've got some consistent payroll.
And you've got decent sized payroll for a smaller sized company.
That can work what doesn't work is not a lot of payroll not a lot of people and a very high valuation and people don't talk about that enough because.
At its core and ESOP is we give you a profit sharing contribution each year and you give it back so we can give you stop right so once that profit sharing contribution going to be.
[30:08] To pay the loan payment we don't want to be given 202% of pay profit sharing anymore we did that back in the 90s we saw what happened or have like a 200 year Insight note or whatever.
That I what's what's the I know we're talking about inside notes and people are like what are you talking about but what's the longest inside note like what what would you become I've seen like I had a 55 year Insight note which I thought was really really long but I've heard 100 Year insight though.
It wasn't my deal but I've heard that that's been done um what are your what's your take on that and we'll and I'll tell people what Insight notes are in a second, so they're like those were just starting to come into play as I was leaving the industry but I was surprised at a 45 a 45 year note so I I still hadn't got my arms around even 45 years so yeah um I I'm I'm probably still old school and I'm probably way out of date here but I, those 25 and 30 year loans is what I was used to so I'd have to figure that out I don't I don't have that number but 25% is benefit is huge like right so if a 401k matches 4% it's like nuts to have something that.
[31:09] That extreme so for everybody inside notes or how long the trust in the company how long the uh notice between the trust and the company to issue shares, the longer the note the more more time it is that they're going to issue shares so the shorter the note the quicker the the issuance of shares to employees.
Um but there's far there's a IRS code sections 404 things that you have to do and think through to make sure that you're not.
Um jeopardizing and that I think your point is really good I think you have to look at the payroll.
[31:38] And the evaluation and those can be completely out of whack if you have that I think that's a that's another thing that people don't really talk about as much but we should for sure.
[31:49] Um well cool so so as we go in I guess and we we're not going to have a ton more time but um with somebody goes to a state center meeting that eox is part of.
What should they expect to experience like what if the brand new to esops and then like okay I knew I'm in that state you guys are doing your stuff and what should they expect to experience at those conferences or meetings.
[32:12] I'm glad you brought that up most people don't ask that question and I don't ever get to it but we bring uh we started.
Uh very early on we had a CEO come to us and tell us that he thinks that the S he thought that the sales process for esops was broken.
And I had no idea what he was talking about but he said I want to meet you at an NCO conference I want to tell you why I think this is broken and how you need to fix it and what he said was.
We have to tell the story we're leading he said I just left an ESOP conference and I won't say which 1 but 1 of the 1 of the major conferences that we host, he said I just went to a session uh there was 4 prospect prospect companies prospective companies and he said at the end of the session.
The people up front had scared the audience so much and had given so many details that somebody literally raised their hand and said why should I create any.
[33:03] And he said we have broken and so all that being said all of the meetings that we do.
That we can that are appropriate and almost all of them are appropriate we do not lead with technical details and we typically do not have service providers as, the speakers the speakers are business owners who have gone through this process before from the state in which they live and they tell their story they tell their Journey look 6 years ago I was here, this happened I was looking for so that's the way to exit these are the different paths I went down and this is why I chose employee ownership, and this is what it's done for my company afterwards or maybe they're too new and they don't know but we have those business owners tell their story and if the business owner is selling shareholder is not available then we have the CEO CFO HR director.
[33:49] Tell the story that they know and have heard for a long time and most of those are some of the longer term esops.
Um but when they tell their story it's amazing how many questions and how much easier it is to get people engaged and they leave the room.
Not scared don't have any details and they want more information which is what we want so that's what they can expect is 1 or 2 people um that'll be on a panel I'm headed to Illinois in a couple weeks to do a panel with the Illinois Rural affairs, conference we'll have 2 people to ESOP companies from Southern uh Illinois that'll be on the panel and tell their story about an ESOP.
And um I know we'll get calls after that so that that's really what those those meetings are about, um the service providers that bring those clients to the table are always with them they're always in the audience because there's going to be there's going to be questions that they can't answer uh gives them the opportunity to answer the question from the audience and then always gives them.
Always people talking with them and asking more detailed questions but, I think we need to lead with the story not the details I I love that I do because I I've done like a lot of different episodes but the ones I love the most are ESOP stories like I'll interview the company after the deal is done.
[34:59] A couple years like hey I I just did 1 um for a company we did their ESOP in Texas and.
[35:05] And all we talked about was the esap committee like the the company the employees got to talk on the podcast so it was like it's just fresh and new and that's really what people want to hear, when you get down to it because you got to get through all the the mumbo jumbo I always call esap PhD talk it's like people are talking about this PhD level and like I don't even know what you just said right.
But when you talk to a business owner who's done it they're speaking the same language and that's way more effective I think, in the in the scheme of things if you're trying to really accomplish the mission of educating you know people yeah 100% And then you know the details are ready to readily available I mean we don't have to wait, you want to talk to us next week about the details of what you heard and why did he say this or what does this mean and I mean those.
Getting them interested is exactly what we're trying to do uh and it's funny how many of those um connections that we make, um if someone has not come to a seminar with us and they just call us out of the blue we also make those connections to the business owners right away before we connect them with service providers, or sometimes alongside uh it's amazing how many of those uh when you do see esops that get created they talk about the person you know how did you find out about employee ownership oh I talked to Ken Baker from New Age Industries and yeah after talking to him I couldn't.
Had to look at this thing he was so excited about it because you know that they all get excited I mean everybody usually loves what they've done they see what it happens after they leave the company or even if they're still in the company.
[36:28] Yeah it's always fun to see those relationships continue on yeah I I agree and I think that's part of the.
What draws people to to love doing what we do right I mean I just it's a community of people that really.
[36:39] At the with the clients and the other providers too I mean it's exciting because it's something that we're all helping.
At the end of the day we're helping people we're helping communities we're helping the companies we're helping the employees.
Um that's a good that's 1 of the best feelings in the world right you're not you're doing something that there's a win-win-win involved and that's gratifying for all of us.
[37:00] Yeah and you know as a third-party administrator the best part of my job that I I I wish more service providers had the ability you know got to participate in, uh there was 2 great parts of it 1 was statement and you know statement handout day at the barbecue I mean very rarely do they, have these opportunity come in or the trustee or others that get to witness the excitement but third party administrator and my job that was you know I absolutely love that go out and explain the statement how do you read it, what does this mean how did you get more shares but more importantly get to see the announcement of how big that balance has got and then the second piece we never got to actually hand checks.
[37:35] But on an annual basis with 50 Esopus.
If it gets real that I mean if you go out and do statement day for 15 years and see these people and know who they are and then actually get to send the check in the mail to them was yeah I just wish I could have hand delivered some of those checks now that I look back at it, um you really see the impact on on what that's what that's all about that's cool, well I I appreciate you doing what you're doing Steve you know so keep it up um if somebody is looking at hey how do I get more information from eox we direct them to your website or what what you yeah so.
Hex network.org, um on there there'll be a pull down menu that says State Centers and you can find a map of all the State Centers at 21 State Centers across the country, uh they have clickable links directly to the state center and then you can you know if you want to talk to somebody in your state or you want to talk to me and get guided to a state or.
[38:40] We've kind of paused on opening State Centers tiny bit here this last 18 months because.
Uh you know build it and they will come and now I got to support it and so um doing a little bit of that now but, uh if you're interested in opening a state center I'm always open to talk um to tell you what it takes to get a center open up and running uh we've got some new activity just in this last month in West Virginia and Alabama so, stay tuned I can't guarantee anything but I have a feeling you're going to see.
Uh 2 new State Centers in the next 12 to 18 months at least in those 2 States so um yeah happy to talk to anybody about that or business owners.
Um which is probably more of your audience um yeah happy to always take a call even if there is a state senator just give me a call shoot me an email perfect cool well thank you Steve um thanks for having me Joe yeah thank you for for joining us today any final words of wisdom for ESOP people or um as we sign off.
[39:33] I think the final words of wisdom is just please allow us to have employee ownership at the table that that's all that's all I can ask for um it's not right for everybody but if we could just get it on the table um.
Yeah we would change change that number from 225 or so new esops a year uh before I leave this, before I leave this job I want that number to be well over 300 a year and then I can, feel like I've started a started a revolution here our movement so I love it cool Steve thank you for your time today and for everybody else thank you for listening and we will see you on our next step on this journey to a Nissan.