On this episode - Dale Hobbs founder of Hobbs Madison - consulting firm discusses him and his partner (Gary Madison’s) journey to an esop. Dale and I discuss the process that we worked through to sell 100 percent of their stock to a newly formed ESOP.
On this episode - Dale Hobbs founder of Hobbs Madison - consulting firm discusses him and his partner (Gary Madison’s) journey to an esop. Dale and I discuss the process that we worked through to sell 100 percent of their stock to a newly formed ESOP.
[0:10] Hey everybody this is the ESOP guy and we are on a journey to an ESOP and so excited to.
Do this topic today this episode because this is honestly 1 of my favorite ones I love doing the interviews with companies that have gone through the ESOP process I think it's so helpful.
When you're thinking about doing an ESOP to actually hear from business people that have gone through.
The entire journey and so to do that today we get to spend a little time with Dale Hobbs who is 1 of the founding owners.
[0:40] Former owners of Hobbs Madison and his partner was was Gary Madison so Dale Hobbs Madison.
Um and so it's going to be awesome to be able to kind of talk to Dale and just get his you know his thoughts and.
Just his experience at going through the process of doing an ESOP so thank you so much for joining us today.
[0:58] Absolutely feel great to be here great so 1 of the things on on the podcast that we kind of do just to break the ice is getting started is.
[1:08] Because I do so many movie topics I love to do the same thing over and over again it might be redundant but what is your favorite movie and why.
[1:17] Oh my favorite movie um.
[1:20] Let's see uh I think any 1 of the Batman uh movies over the years there's so many different iterations and you can kind of pick up any 1 of them and go for either a light-hearted version or a darker version and uh so to me I find it interesting to kind of compare the different versions and any 1 of them uh you know depending on your mood you can it can match your mood.
I think Batman always kind of I don't know for me it's like he's 1 of those Heroes that everybody just.
Loves I know when I was a kid as a boy I would literally run around the the house that was the old Batman TV show.
And we'd be like no no no no no no and I would like the the towel on my I would take my mom's clothes pin put a towel on my back my neck and then I would jump off the couch and.
You know I did the same thing absolutely I think I was more than 1 year of Batman that Halloween so yeah I I think my favorite Batman is the Batman Begins like the Christopher Nolan.
That was oh yeah phenomenal you know.
By all of them are good like you said so well thank you so much I think that kind of helps people hey you know what I've had people share different things there um so it's a bit of a curveball.
[2:25] Um so getting getting started tell us a little bit about Hobbs Madison like your company like.
What you guys actually do because it's kind of helpful for people to understand you know the business industry and going into that and talk about the ESOP.
[2:39] Yeah so Habs Madison um is continues to be a professional Services firm focused on Financial Services clients we're in the technology uh systems and architecture space uh we help them with very complex large projects uh typically Replacements of.
Say core banking systems or trading systems um but we also do other things like project management.
And so we run the gamut but typically on the more complex um architecture Systems Technology side of things for our clients.
Sounds it is complicated because I I mean I know that because I've spent a lot of time with you guys um.
When you guys went through I know 1 of part of the story that I remember in talking to you about it with the very beginning is you guys had gone through a couple different options before you got to the ESOP.
[3:23] Can you talk about like what you considered you know on your on your table as far as you and your partner saying all right what would this what would this look like what would this look like and eventually you you obviously got to the ESOP how how did that work.
Yeah so we looked at a straight sale we actually um you know dressed ourselves up went through the process of putting together the the red herring or the the informational um package that you would need uh and and spent a fair amount of money actually uh getting the right people in the right place as hiring a CFO doing things that we thought thought were going to be impressive and important to a potential acquirer um but when we went down that path I think 1 of the biggest ahas that we had was.
Yeah I guess 2 things first that they all carried culture change with them that was fairly significant meaning you were going to be absorbed by a new company that had its own different culture and what could happen to your people was really unknown at that point.
[4:18] And um and we valued our people we thought thought there were people and know that our people are really our biggest asset.
And so we have to kind of we felt we wanted to keep that culture of of uh Team focused people focused priorities with the firm that we had uh and we didn't see that with a lot of the people that were kicking the tires with us the other thing was that there were still a lot of risks so in a transaction like that there were a lot of holdbacks and so whatever number you really got um might not have been the number when you start to get into any fine print there's just a lot of numbers that became well you know this could this could be a multi-year.
Process where we end up seeing a lot smaller than whatever the number is on the table.
Because the holdbacks and then also risk of litigation and other things like that for issues that were completely beyond our control and that just made it a lot scarier to us as we looked at those risks and those issues and and uh and then especially the impact on the the loss of the culture and the loss potentially of some key employees too so yeah.
[5:20] I think you know just from my experience in talking to doing deals with different companies the ones that have gone through.
At least explore that option that thought that was kind of if if they thought at the beginning that that was even a possibility I think it's very healthy for them once they get to the ESOP.
Because they're not looking over their shoulder thinking oh I would I I wonder if that would be a better option so so part of that I would just say I think it's really I mean not that you have to but I've seen those things become solidify the decision.
What yeah it made us eyes wide open I think about the process and and so so go ahead no yeah and I think that's and that's part of my question is is there my comment too is.
[6:02] It's you know obviously there's there that helped you get into the ESOP space and say all right this could be a good option for us.
How did that how did that really start like where did you actually hear about it first great question so I had a friend of mine who had a similar type of business and um and that we actually had at 1 Point looked at acquiring so part of our growth strategy uh are in organic uh growth strategy was um.
Some small Acquisitions and and so we looked at an acquisition and we actually ended up losing out to an ESOP in other words he.
[6:33] Bid us and bid a couple of other companies and uh and he ended up uh ultimately when he called us and said hey we were number 2 we really liked the culture he really wanted to go with us however he had this better option which was uh an ESOP and for him uh so it's like okay I I had known about esops before I had actually been employed with an ESOP years earlier but I hadn't considered it for us I just kind of thought we were maybe too small at the time and um and so when he with an even smaller firm um took it through the ESOP process uh that made me say okay this is something we really need to seriously consider and so I took that back to my partner Gary and we started to talk seriously about uh an ESOP as an exit strategy option and the more we talked about it the more we research it in fact that's actually when I came across Phil and his um uh his sight and his information uh and we had and we talked to a number of other um ESOP call it quarterbacks as well um and uh and it started to move ESOP to the top of the list for us as as a potential exit strategy for us.
[7:38] No I know you're very thorough like evaluating and evaluating your options I know that because we did.
Work with you guys so um so I know that that's helpful because like you did look at all the different opportunities so what.
As you as you settle on to the ESOP and um you know going into the the the first part of the whole process like what what sort of things as you got into it um.
Because it's hard to know like when I when I talk to people about ESOP I'm like here's the journey to ESOP I mean here's the first step Second Step you know my.
[8:08] My Little Wheel um what at the beginning of that like what surprised you or stood out to you as something that hey I really learned a lot and that.
Part of it or yeah actually I and and to be honest that was part of our evaluation phase so when we evaluated Phil and and um he gave us his will and he talked about the process a couple of things hit us on that first.
[8:30] Um he really knew this process he had this down this was not an art this was a science you could tell this was something that he had done many times but it was fresh still he wasn't like wrote going through something he was instead giving us kind of the here's what you can anticipate here's what your steps are here's the journey that you're going to go down and it was very very clear there was nothing kind of gray in this it was a very straightforward um explanation and and so I interestingly 1 of the I don't want to say surprises just kind of jumping forward to the end of this is that what he told us in the very first meeting um about the process and the cycle and and what the steps are going to be uh has been exactly how this has gone down I mean it became kind of um prophetic sense but it was certainly you know just the explanation matched the reality matched the journey and it's nice to have that and not have the surprises and and um I I think that to me was a big surprise was that there were no surprises that things occurred as they as we had hoped but as he as he explained is basically the process that we went through and and that was really good um I think uh in the early going were there any other surprises to us I I don't think a lot because we had.
[9:48] Can we had talked with some other firms too and um when we came across Phil I think that he he he had the best explanation the best summary of The Journey and it really all snapped into place with him uh and with the explanation.
[10:03] Well I appreciate that that's really.
Very kind of you in um well I'm I'm curious about like if you don't mind sharing I don't want to tell people like the names of people that you went through but 1 of the things I've I've because I know people do this and I think it's super healthy to ask and talk to a lot of different.
Approaches.
[10:19] Um did you find in that exploration process did you find a lot of variance in terms of how people how different cell site advisors are going about it or was there kind of a center cluster.
No no they they were very uh and and in fact my my friend the.
The guy who kind of put us on the ESOP path uh he had done a process that had much more of an investment banker um biased or Focus I guess in other words see this guy came at it as if he was a you know a top tier investment banker and had all the top tier pricing and had all the top tier uh complexities that went with it and um and it you know the outcome I don't think it was any different at the end of the day and and in fact I think that's 1 of the.
The things that you want to do is not at least something we learned about too was ways of trying to make sure that the ongoing firm is still successful and and some of that goes to.
[11:15] How much debt do you place on the firm and who do you place the debt with and again other areas that I think we got some very good.
Um ideas and recommendations from in terms of how to do that and make it really manageable and manageable for the the ongoing firm um and so you know so that that was something I think but the our our process um with Phil and his team is Associates was um I thought seamless easy.
And it kept the financial burden from being as great as I as I saw it with some other other companies out there as well and I think the results were better than what I I saw those.
Oh that's cool good that's that's interesting because I do talk to people I don't know exactly how everybody does what they do.
But I do I've heard that from other people that you know this is.
[12:04] It's all over the place it's not like and you would think that what we do is very similar right at the at the end of the day because it's the same stuff that's going to happen.
But it's just communicated so differently and there is a different effect of that so um so I think what what I would say along those lines for people listening is look.
Just do your homework you know and you got to find someone that you're comfortable with and you got to find that you're comfortable with their process.
And that you whether whatever you end up spending on this obviously cost is a a factor but it's to me the main thing is finding people that you really like to work with and that you that you trust.
[12:39] And and we very much like and Trust Phil and but let me talk about the process too let me add to that that what we found with some of the companies that we interviewed and we went through a pretty rigorous interview and and because we knew good questions to ask I talked with my buddy that had ESOP for things to ask about and um I think what we found that was really fascinating was some of the firms mystified the process okay and I think Phil demystified the process and to me that was a really big difference he just made it very you know these are the steps this is what you're going through they're all going to do the same thing and I I'm 1 of these guys too that has a problem I don't want to you know in a pricing range I I don't always want to you know you don't want to pay the most you don't want to pay the least but when you're looking at it you're also saying you know is there something more that these folks are doing because they're charging so much more it's got to be a a better process and and at the end of the day it turned out it wasn't there was nothing else that because it's a regulated process there are so many key steps that have to be done across the board and and I think that was the uh the the light bulb that went off for us was that this is a a a regulated transaction.
The steps are consistent why pay so much more when you don't have to and don't let them mystify you about it because it's there's nothing mystical in the process it's a very straightforward process if you've got a good quarterback to help you through it.
[14:07] Very very good point Dale because because when here's here's what I would add on to that just to say I think that's such a good thing for people to think about um.
Is that asked the question I would always ask this question when I first started getting a esops like why is there such a disproportional fee going to the cell site advisor.
Versus the ESOP attorney who knows a lot right I mean they've been doing this for 20 30 years the ESOP trustee who's taking fiduciary risk to actually do the Buy.
The valuation firm who's representing the trustee and of course you know the attorney that represents the the evaluation or the trustee.
[14:43] I mean why is there such a disproportional number I mean that that always stood out to me as strange the only there really isn't only answer that is obvious right it's just that they're able to charge it.
And people are willing to pay that's coming that's B that's business 101 right it's.
I have it is I have a a a customer who's willing to pay the the number so but the key is understanding I think the biggest thing that gets into the way of people's thinking is.
[15:09] There's a sense of like you said top range low range cost wise.
[15:14] So it you know it must be like if I buy a bottle of wine and I buy a bottle of wine that's uh $200.
Versus a ten dollar bottle of wine right I should really expect that 200 bottle of wine be much better than the ten dollar bottle I mean and if I and if it's not then something's weird but then you get into the thousand dollar bottles of wine.
You're like it's really not that much better like.
Right not not that I have done a lot of that drinking but yeah the point that the point is is that I think you really got to look at the details behind it and a good you know I think part of its understanding and educating yourself and that's what this episode this is resources really all about.
[15:49] Well so going into the the actual deal that you guys did 1 of the things that comes up every single time is is.
How do I you know update my employees at what point do I update my employees at what you know how does that work with my key people.
Um and so kind of an open-ended question for you I know you guys have great culture you got great people and very very talented people.
Um as we went through the process what what was what were some of the things that was that was stirring in you and Gary.
As far as how to go about that and then what did you guys actually do in the process of other people yeah so great question and um I think for firms like ours retention risk is always a concern okay and change is something that could create retention risk any kind of change even if it's a good change positive change sometimes people aren't sure what that is and so they would take an opportunity to um uh to to look at other options and we really didn't want to do that we didn't want to create a lot of noise so to be honest we kept this fairly close to our vest um through.
[16:53] All of the planning side of it we read a couple of key people in um just to start to talk about what this process is and what could happen but we weren't sure that it would close or that would happen at that point and we just wanted to do some initial preparation successor planning is a big part of this too we're a big believer that successor planning is something that you need to be doing.
[17:14] Kind of an ongoing basis anyway it's just good management 101 is to make sure that you've got uh a strong management team in place because that's something that does create a foundation and by the way that was another thing when we were looking at other exit options too is the and that that kind of focused Us in on successful planning earlier because of that too because the question was always what what are we buying when the owners leave you know how much is Left Behind how much of the relationship do you have how much of the client-based do you have um how much of the culture is you and um and so for us we had to really ensure that we were building a strong successful team at multiple levels and uh that could take over and run the firm as we move moved into uh other other roles or other uh other directions in our lives and um and so so that was something that helped lay the foundation for us was that we were able to build a strong success routine but then communicating to them we kept it to kind of the top couple key people and then once we closed the transaction we then communicated it to everyone and again this was another area where Phil and his team uh came through for us they had some really great materials.
[18:28] Uh that were foundation for us we worked on tuning and tweaking them to kind of create our custom message around that but they gave us a jump starter kit of of uh Communications and um and and it was very positively received uh as we went through that we had multiple passes of kind of broadening the message to employees to so we could take it to smaller groups and then bigger groups in a different levels too so and then we also had kind of Q&A follow-ups uh with them as well and um so it went from a very small contained group to all employees once the transaction closed.
[19:04] Cool now I think that's it's always a topic that has to come up in terms of people and they're thinking about it and I think my I would add to what you said I mean it has to be good.
Has to be good for you and your culture and I know some companies that are just like here everybody we're doing this thing right.
[19:20] I that gives me anxiety because like if something doesn't happen because 1 of the things that happens you know is is you go through the process and you have ebb and flow like.
The ebb and flow like we're doing great we're on track with the forecast or we're not doing great we're not on track with the forecast it's either 1 of those 2 things it's usually not exactly on track of the forecast.
[19:40] You know in in your case like you mentioned you know you have the banking thing happen the last couple years and and all that.
How did you work through the the ebb and flow because I could that could definitely be difficult when you're trying to.
[19:54] We're trying to land and close the ESOP but at the same time you know there's back and forth we have our pipelines building and we have new stuff coming but we don't know when how how did you guys um work through that because that that can be difficult for some people yeah well I think you gave some advice early on which was just continue to run your business and um and that was very good advice because.
[20:15] Um we did the things we would have done anyway because it's it's an ongoing business in this and where I think in a and other sale options sometimes you're thinking of a cliff okay what happens beyond that I don't care here you very much care about the ongoing business and so on developing the pipeline um making smart business decisions uh looking at minor tweaks and and tuning in the business that you have to do in the business model in the planning uh in sales teams things like that all of that became a kind of a consistent run the business throughout the process and Beyond the process because your your timeline is not the cliff the timeline is the ongoing business too and so I felt we continued to make good decisions as as we had in the past 22 years of the business um where we every year we had to make a tune or tweak to the business every year their market conditions we have to respond to every year for us we have to look at do we put more emphasis in our case because it's Financial Services you know maybe we'd spend a little more in investment management or a little more in insurance or a little more in banking and you know so we continue to look at those uh fine-tuning adjustments just as we had historically so it was run the business um and um and and build the pipeline just as we had but uh I think continue to run the business.
[21:36] Yeah I think that's that's helpful because sometimes it it's like.
Unfortunately the ESOP process does take a lot of time and and depending on the season the part of the process that we're in I mean some parts are like at the closing obviously that's a lot of.
A lot of time but it can get distracting and everything else but at the same time.
[21:54] You got to keep things moving and know that thing just like years ago how it worked out it's going to work out again like it it yeah it's not going to just fall off the cliff you know their their Cycles their business cycles and we fortunately have been around long enough too that we know the business cycles and feel comfortable with that process and know what may have not closed this year may close come back again next year um that's part of and then remember too uh even when I we got busy in the process because we had built a succession team and had some really great resources to run the company um that led us even do more effective hand off to them because if I needed to spend some time here you know and and I would want to get pulled into something else it was nice to say oh no let them run that because letting go is hard sometimes and that that became a really uh key part of that transition process is Letting Go and and letting them um develop and make mistakes and do what they need to um but you're still there that that's another great part of it is you're you're still there and again even ongoing you can be there to the degree that you want to there's some flexibility in this model uh and this type of transaction.
That you don't have in some other types of exits as well so we.
[23:04] Did not leave immediately we're still involved we're still involved with the board um we're still involved in as needed by the company frankly because we we're vested in the ongoing success of the company and and I'll be honest I think that that's another I think 1 of the Silver Linings that I did not anticipate was uh some people when you go.
I don't want to call it retirement but when you you know transition exit retire whatever you want to call that that cliff.
On the other side of that they go from going 100 miles an hour to zero and and I live in I live in the south I live in Florida so some people call it the you know the Happy Land of retirement uh but I I prepositioned coming here years ago I've been here for a long time because I had family down here and um 1 of the things that I found was that um that brands of mine that stopped and went to zero sometimes struggled greatly with that.
[23:58] And I have found that because we're still able to be involved with the board we're still able to be involved with kind of you know when they need us they can call us um that I don't feel like I've just stepped off the cliff instead I'm able to be active to the degree that I want to be and I'm speaking for my partner as well on that that I know he loves that he can spend more time doing some of the of his passions right now.
But at the same time he's able to pick and choose where he wants to still be involved and kind of supporting and maintaining uh you know the the ongoing viability of the company uh when and when they want it too by the way I think there's 2 sides of that you know how much of that do we want to give and how much do they need and want.
[24:37] And you were able to kind of marry those up very effectively now.
Uh where I think again in different exit options it's you know you hit that cliff and you fall off and um so again I for us it's been a perfect match uh of transition and and and and I do I have to say too I like not having to go 100 120 miles an hour all the time anymore too so that's a that's a really big upside I think that is a great Point honestly that some people when we.
And I think you put it into perfect words like people talk about the flexibility of an ESOP.
[25:10] I think it's interesting that you as a business person just speaking generally you spend 30 years 40 years however long to to build a skill set to build a you know the how do you do the thing you're doing for the company right and could be just an incredibly valuable element and then all of a sudden you don't you're not needed anymore.
They're like hey get out of here we've bought your company we don't need you anymore because we got really smart guys from wherever that are doing what you were doing before.
Um which really is partly obviously 1 of the major reasons you should think about esops because you do have the flexibility of being able to put in.
I but but deeper than that like is just the sense of Health like being a healthy person.
You need something to challenge you like it's not going to be like oh I go from you know 120 miles to zero you're not going to be healthy unless you jump into something else.
[26:01] So I think what this does is it gives you that bridge and the options to choose exactly where you want to fit um assuming.
[26:09] You know your team everybody that's doing the work obviously wants to have you do that but I think that's a really good point that.
[26:15] Sometimes people get gets lost in it and I think for people that just sell their companies outright again nothing wrong with it but the same time.
[26:23] You know they're there could be chasing the the big number as opposed to other things but when you actually look at the at your the value of your life.
Money and finances has a category there but there's a million other aspects of that to create value so.
Um so I think that's really cool and I was going to ask that question about because you guys have done a very good job of the succession plan process and you got people in those places.
And you've already kind of said this but I will ask it more directly like you are seeing less of a burden from what you had before you know and I mean like.
[27:00] I have to be the 1 that does this and maybe Gary has the same experience and um how how quickly did that come I when when did we even close was it sometime the spring when we closed July 31st and so yeah right in the middle of summer and uh uh I I think we each have our own Paces in terms of how we um we transitioned and I think again it matches each of our interests and needs at this point too uh and I think it's funny too um.
[27:29] I think the 1 the fastest is the 1 who maybe slowed down a little quicker because you can give too much at some point and you need a break but then we'll see how the next year goes too you know where I think we each have an opportunity to match our our interest and timing and other life interests as well because if there are things that are big summer interests then maybe we can you know pursue those and then be more active in the winter as an example or you know for for me I probably prefer being more active in the summer because that's the bad weather where I am and in the winter you know I I enjoy spending more time pursuing my uh winter passions down in in the South you know Gulf say you know and whatever it might be um and then there's just some catch up time things that you deferred uh for many years many times and the opportunity to do those but again we're able to balance I think life balance is probably the best thing we we always um labeled our company kind of a work life balance company we tried to be a lifestyle focused company for our employees but I think at the top of the house we didn't achieve that very effectively and I think we're working to um we we worked to make that happen and I think we've started to achieve that through this transition um I I think with my remaining management team I'm hoping we can uh get them to some of that better balance as we go forward too so.
[28:53] Because I know they they picked up a little bit more of that burden right now too but I think as as they add to their team and build their successor plan I think they're going to realized some of the same uh like work life balance benefits that we picked up too it's a good that's a good point.
[29:08] So coming something coming out of the gate um obviously you've gone through that employee update communication and and you're working through all that.
Um 1 of the 1 of the follow-up points of creating ESOP is you create your board of directors and you go through that process of of.
[29:25] Some companies have had a board before so and others you know really haven't.
Um then in your case you're going to have an independent board member what are what's on your mind as far as the board of directors I know you have a little time to kind of create the formal board structure.
[29:39] So we had we did have an Advisory Board before that what really kind of helped keep us in line with things we should be doing that we knew we should do but that we didn't always make a priority they helped us make.
Uh a priority out of the things that should have been a priority the worldly a weird kind of worded uh uh way but but I I'll say that a board can be a very useful thing because it keeps you in check it keeps you honest as you go forward.
[30:07] And it makes you look Inward and I think as a business owner it's very easy to treat yourself like the cobbler's children and you know where you just work hard but you don't really look at your own family your own self your own situation uh sometimes your own company and I found for us.
Uh we were victim of that as well but our board helped us do that and so with the ongoing board now with the ESOP board uh we found an independent board member somebody that we knew somebody that we've worked with and in fact was a former client of ours too so they understand um the process was a senior executive knows how to work at the the board level.
And uh I think is is giving good advice and is the so for us it's been a good process uh there as well and uh and so don't be afraid of the board the board is uh a really good useful tool um for.
The the um the management team to bring good data in and to think introspectively and for us to keep our finger on the pulse of the organization as we go forward that's great.
[31:09] So so kind of as we as we wind down a little bit I wanted to kind of think about like the communication strategy as well and I know that you guys are working through.
[31:19] Keeping the employees up to date you know that this process of getting the employees engaged in these up is going to be it's always a critical importance of any company that goes through that.
[31:28] Um the 1 question I had for you too is like how how have you looked at this from how do you share that with with customers or clients like what what is in your communication strategy for post ESOP that says hey we're an employee owned company what and how do you use that to like Leverage your um.
[31:45] We're just we so we have rebranded um and we have not made a huge splash of that to our uh our client base yet um partly because it really is not relevant it's an ongoing you know the businesses run as the business was run the same people are delivering the same people are selling the same people are um you know are there for immigration and um and so everything I think is is very much as it was to the clients and so we're trying not to emphasize any disruption or change to our client base right now uh the employee owned perspective of that or the benefit to that is something that when it's beneficial in a sales cycle we can bring it up um but we've taken the nothing's broken nothing's really big change so far model and we just haven't made a big emphasis of that uh there are clients and and that interestingly there are other employee-owned um uh Target opportunities for us in our our sweet spot and so we're going to use that adopt that in our sales cycle so let's go hey we're employee on your employee owned Let's help each other um and and so that that's a future sales emphasis but not today for us yet so yeah so we're in the early phase rolling that out I think that's a it's helpful I mean I think sometimes people like how do I actually use that and I think it has to be.
[33:04] Specific to what you're talking about like.
Think about your target market think about your existing customer base think about not mean it could be a negative it could be a positive so I think it's it's helpful to think about.
How do you load so so not for so we have 2 sides of our business 1 is the client side and I think employee owned may or may not be a benefit to them on the other side when we look at our acquisition of talent that I think is a big benefit because when we try to recruit and bring people into the company to be able to say we're employee owned and that this says benefits that can occur to you uh and we use examples like in in our Market down here there's a very large ESOP that people are familiar with called Publix a big grocery store chain um but they know that they understand that they see happy employees and people that have done very well with their uh with their careers in that environment and so uh for us we find even though we're a very different business we can point to other similar businesses to ours that have gone Esau um and and how this can be a really good thing for them so we find from an employee recruiting and retention perspective that's where we've seen a bigger impact in object for us.
[34:13] I think that's really helpful you know because the post tap world as you start thinking through it I mean it's just the beginning right and how you end up.
Leveraging this is a tool you know the closing was not the end it's the beginning yeah um 1 of the 1 of the cool Parts about your company is you're completely virtual.
[34:30] And that's why you can be in Florida but your company employees are all over the place um.
[34:37] What was what was challenging about that or what made the process for you easier to be a virtual company yeah well being virtual there was less of the um rumor mongering going on during the process because they didn't see us in meetings or talking to people or doing anything like that but at the same time um I think the communications became more important you know how we virtually communicating communicated having uh teams resume calls with the all employees and or subsets of employees at different times and rolling things out so that when it was appropriate to communicate we did communicate we kept that communication up and um and we shared the good news and and shared it in multiple tranches and then there are additional opportunities to touch employees as we go forward and we're going to continue to do that I mean Communications is something uh some firms are really great at uh we're not the best at that but we're working towards that and I think that this is another opportunity for us to retool um how we communicate and how frequently we communicate to employees because they're more good reasons to communicate now uh to them so um so I think that Communications has been probably the most important part of our our roll out and our V being a virtual firm that made that even more critical for us because they didn't we couldn't just call the all employee meeting and bring everybody into a room um that would have been nice but you know for us and all employee calls or or multiple calls with different groups of of Affiliated employees worked as well.
[36:06] Well I liked it too because everybody's so used to to Virtual meetings like your company people so when we got to the site visit part like.
For I mean as much as we love to travel to different places that's always fun but to see we didn't have to go to your office you know me and the trustee and evaluation firm didn't have we just could show up.
We created a really good presentation on through the teams meeting that we did and and it was honestly just as good as it would have been if we'd all been sitting there in person so yeah we like to say we were a virtual before virtual was cool yeah we've been virtual for 20 years you gotta put that like it's worked very well put it on a t-shirt because that's your quote I mean you know that's a that's a good 1 yeah for sure um anyway so so really awesome time to spend with you today what I think I.
Final asked question would just be.
[36:56] What sort of thing would you advise companies you know our primary audience are those that are thinking about going towards an ESOP so what sort of things would you advise them or 1 major thing that you would advise anybody that's thinking about doing an ESOP.
[37:11] Yeah um so first I'll I'll say kind of an unanticipated upside to all of this is we were talking about our different strategies and it was very difficult ultimately to decide to do anything that so that that was kind of another aha to me is that because we were 2 owners and we were 5050 we don't do anything if we don't both agree.
And that became that was sometimes challenging too because you have to both agree and ultimately deciding what we wanted to do is we go forward um this is something that as we started to recognize.
The upside to in the many upsides to an ESOP it converged our thinking into a single place that this is the right type of Transit transaction for us the other thing was.
[37:58] That we actually.
I realize that we felt good about this better than anything else where you know you could blow up the culture you could they could blow up the people the new buyer um all of that kind of thing.
Uh we found that as we started to think about this Embrace this and describe this to other people and to our employees we felt good ourselves to say that this is something that we're not doing this only for ourselves we're doing this to create.
A multi-generational wealth transfer too because it's not just transfers to us it's transfers to our employees and we felt better about that ultimately is that this wasn't you know grabbed all of the the cookies ourselves and run off it was share the cookies and see what we can do to try to create.
You know additional wealth through our organization and that felt really good to us and so so if I were to say.
You know kind of a final piece of advice if you're looking for an exit that you can feel good about and that you can do good for your employees and people that really.
[39:00] Build what you have today because the end of the day it wasn't just my partner and myself it was all the great people we have working for a company.
And to be able to give some of that back to them.
Was a a really big part of this decision-making process for us and that that's why I think we're so happy with with what we've done and the results that we've achieved through this so far.
I think that's super helpful honestly the whole I just appreciate your time to get because it was just very helpful and I know.
You know talking through some of the things we talked about that's some things that are just completely on everybody's mind right now that are thinking hey I'm I'm thinking about this as a strategy right now for whether it's 24 25 or whatever in the future that they're doing so so thank you so much for doing that today Dale absolutely feel great spending time with you today great so for everybody else thank you for listening today.
Um check out our website at journey.com there's lots and lots of content there to to explore if you're looking for that.
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So with all of that thank you again for listening today and we will see you on our next step on this journey to an esop.