EP20 - Where Do I Begin?

In this podcast episode, Jason discusses the best ways to approach succession planning. He focuses on tackling succession with intention and covers common obstacles that stand in the way of owners achieving their vision for a successful ownership transition. 

Transcript

[0:13] Welcome everyone to the journey to an ESOP and Beyond podcast where it is our goal to make information and all things surrounding Employee Stock ownership plans understandable and accessible I'm your host Jason Miller and this is my very first solo episode. So where where do I beginthat was the first question that I asked myself and really there's so much to talk about there's so much that can be done so much that's already been covered and what what I. Don't get is where should I start and what should I do and what should I consider and what if I don't get the movie references right or should I even talk about movies or what if I stutter I probably will throughout this uh entire episode but but we'll see what if my hand gestures get out of control. Do I talk about culture uh do I talk about taxes do I talk about life-changing retirement account balances do I talk about Legacy.

[1:11] Where where do I even beginbut this podcast isn't for me it's for you, uh and when I put down my excitement and my anxiety I thought that many of you listening have that same question when faced with your business succession where where do I begin. I'm grateful that you're here that our podcast is part of your answer and today's episode is for you. So 3 common issues and specific actions that you can take to accelerate your succession plan on your own terms.

[1:49] First let's talk about. 1 of the big things in how do I get started when do I get started and I just want to encourage you that you don't have to have it all together to get started on your plan. I have a whiteboard above my computer that I take notes on during client calls uh or if something comes to mind or if I'm reading something I'll take a quote and I'll stick it there uh if I don't have time to think about it or dwell on it in in the moment and I'll I'll go back to that and when I look up its there and I'll read it and if I have time to contemplate then I will uh and then if I feel like I'm done with that thought I'll take it off my board and then I'll leave space for something new, and 1 of the ones that's been on my board for a couple of months is a wealth of information creates a Poverty of attention.

[2:46] And just like I talked about in the beginning there are so many things related not just to secession planning but to esops and to any any type of transaction and what we want to do is learn, and we go and we learn and we come to to places like the podcast uh and we we go to to Google and we'll go to conferences and we will pull in this this information because we we need it we need information to in inform our decisions and there's nothing more important than uh in in your financial world there's nothing more important than the your company your business and what you're going to do with that that ownership how how that's going to manifest for youand. The idea of analysis paralysis uh is caught up in that that quote of a wealth of information creates a Poverty of attention and you can't focus on it all. So You have access to a lot and the more you look into it the more confusing it gets and also the more influence that it has on what you thought you wanted.

[4:00] And that leads us to kind of this the second part of uh what. People encounter what business owners encounter in their journey to uh to in their succession journey and their ESOP Journeyand that's the illusion of choice.

[4:19] I think we're all familiar with the illusion of choice and there are so many options but are there that many options there's so much out there so many things to consider again like me with what do I talk about and the more I think about the possibilities the more paralyzed I become until I start moving. You have private equity and Investment Banking firms calling all the time you have competitors hinting at could there be a deal here for us or you know if you're ever thinking about moving on uh we we'd love to have you in the fold. There might even be a JV partners that are courting saying we really loved working with you on on these projects or on these contracts um you know G give some some honest consideration to uh you know let letting us, you know go go ahead and and acquire youeveryone seems to be talking about it, and if you wrote down the names of all of the people and all the organizations that are calling you to buy your business or offering to sell it for you you'd have a deck of cards worth option with a deck of cards worth of options that probably includes a few Jokersso many options.

[5:31] Sowhen we think about that do you really have all of those options and how different are they and, I read something uh or heard something and um in a short recently, around the concept of a deck of cardsand 52 factorial so 52 factorial you take 52 and you multiply by 51 all the way down, and the number ends up being uh orders of magnitude larger than anything that we can comprehend or or document really have we have no way of understanding what that number is and the way that they demonstrate that and in the in the card or with the deck of cards is there is. No Shuffle that has occurred uh that will occur again for like billions of years it's it's ridiculous and the number of that number that 52 factorial represents is larger than all the the the number of atoms uh in the solar system or in the universe some very very large numberand it's it's daunting when you you pit it up that way but there are steps that you can take in managing this illusionof choice.

[6:49] So there's 1 common problem that all successful business owners will face and that's how you transition your ownership on your terms. The answer isn't more information as we talked about it's not more options it's really something that you're already intimately familiar with just by the nature of your success.

[7:09] It takes a Visionary to grow a thriving company. So distill your ideal vision of an ownership transition down into qualities that make sense for you that means success. To you don't get hung up on jargon and lingo and then just like you've done with your company surround yourself with the right people to execute the vision. So back to our card analogy define your goals write them out on a whiteboard a bar napkin a legal bad whatever you have at hand write write them out, and when you define your goals the timing feeling the financial the Personnel Etc what you're really doing is determining what game you're going to play with that deck of cards.

[7:56] Your second step into breaking the illusion is to just ignore the number of cards. And sort by suitsand traditional set you've got 4 suits right clubs Spades hearts and diamonds. And like a deck of cards qualities of exit options are similar that you can associate them pretty closely with what you have and I'd mentioned before or private equity and competitors and JV Partners you have family you have esops, the number of options of exits are really limited to a few suits if you would. And in that there are different numbers and different values and you get to determine what those values are for uh the the uh cards that are in the suit or in the exit option that that you're thinking about.

[8:47] And what that creates for you is that. There are less actual options than it appears and it takes away some of that daunting feelingso.

[8:59] Younow get to pick the game. Right you get to determine the the rules that you want to play by at your table for your company and then you understand the values that you described to the various cards within suits that you've put out in front of you. And then finally you now get to invite who you want to play at your tablewhat game you're going to play and for what purpose. Don't invite players that you don't like or don't want to or don't want to play your game they want to play their ownthis is your choice your company your goals.

[9:37] And it's very important for you to be able to to again distill down your vision into words that are meaningful to you and goals that are meaningful for you don't let anyone else dictate those for you because, that Clarity of purpose, that Visionary element that you've had to drive your company to the point where it is today that makes it as important to you as it is.

[10:02] Is what's going to carry you through this next phase this next chapter of not only the the company itself but your own personal chapter. Many people are of worried about making the wrong choiceof all the options that are out there so hopefully uh giving you these steps to again Define your your vision and your goals what what success means to you, sorting out what options you may have and then inviting the right people to the table it gives you a step-by-step process to help get you started.

[10:42] So yet again 1 of the things on my whiteboard. All of us have a lot of things that are happening in life and at work uh and we have great intentions.

[10:56] We have great intentions with health we have great intentions with grand plans of of growth uh any aspect of life you name it or someone names it to you and it brings to mind this is what I'm doing about it I am excited about it or oh I should be doing something about itand, today's podcast and helping to bring to light this idea of where do you start on your. ESOP Journey where do you start on your succession Journeythe steps can be there but you still have to take them.

[11:31] We can lay it out you can lay them out the advisor that you have around you can do that but unless you take action. On the intention then nothing occurs and so another of these phrases that I've had on my whiteboard for a little while just says 6 months from now you either have 6 months of progress, or 6 months worth of excusesthis was for me in uh a physical uh Fitness. Area of of of my life and I can wake up every day and I can do the same thing I can go up I didn't make it to do my routine this morning uh for whatever reason. And it could be a reason it could be an excuse and if I look ahead and I go where do I want to be in 6 months. I want to be further, down the road of my ideal progress then I was 6 months ago I don't want to look back and go I've gotten nowhere but every morning I woke up and said. You know what I I just I just couldn't get out today uh I couldn't show up today I had to take the dog out for an early walk today uh and didn't get very far I had to come in to work early today whatever it may have been those excuses stack up to to nothing and then I have no progress and I have lost time.

[12:52] When you get back to that common problem of how will you transition your ownership on your terms that on your terms piece is probably the most vital. Because no 1 likes terms being dictated to them. I didn't want to have my physical fitness become a priority because a doctor told me about if I didn't do this this or this then my life would be shortened inherently I know that I don't have all the time in the world inherently I know, I I have to keep or maintain my physical fitnessso that I have less health problems and I can try to do life on on on my terms. And the same thing applies when you're thinking about transitioning your business what do you do with that how do you have succession at an ownership level and how do you strategize for it and what should you be doing about it this gets to some of the cliches around you how do you eat an elephant, it's 1 bite at a time or for a podcast so like journey to an ESOP and Beyond The Journey Of A Thousand Miles begins with 1 Step and going back to what is that first step.

[14:04] Distill your ideal vision of an ownership transition down to qualities that make sense for you. And when you do thatlet that Visionary part of your brain kick into its gear and its natural Drive, and take you from that first step to the next step and then to the next 1 and then to the next 1 and in 6 months any progress is better than no progress, and understand that that 6 months doesn't have to be a milestone of I wish to completely transition out 6 months from now that may be the case for some of you. And for some of our listeners. 6 months of progress towards something that seems so far in the future may not seem worthwhile but I would offer to you that those same steps will bring more clarity of purpose for the success you have already achieved in your business.

[14:57] Good exit planning is just good business planning. And if you're able to do both at the same time then you will benefit from those activities and those that those months of progress uh toward your goal.

[15:15] So

[15:21] These things take time and they take intention and they takethey require action even a little action. So when we think about breaking those down into those bite-sized pieces it all comes back to the beginning.

[15:40] SoI mentioned earlier that getting Clarity of purposeuh around your your succession.

[15:50] Now you can kind of break that down into those bite-sized pieces. Private Equity ESOP management buyout learning who needs to be on the team making a call a day uh to to meet some of those providers whatever it takes do 1 Thing a day, even 1 Thing a week is better but continue to take action because that action will create more questions but they will be focused questions that will help you get more clarity of vision. Since you're here uh again that goal may be transition to your company to an ESOP. Uh and you may say Jason I really really like to learn more about how an esot could be right for me and my companyI would say oh listener. Where do I beginso thank you for listening today and I hope that you found this helpful and engaging I would love to hear from you uh so please reach out through the website at journey to an esop.com with topics that you would like me to cover that questions that you would have for me or just to explore what's on your mind. Like subscribe share this episode with a friend and we will see you next time on journey to and Beyond thank you.