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Summary of Podcast on EP21 - Cruella de Vil - part 2 Making the Best Presentation for your ESOP - The Grid Wiki

EP21 - Cruella de Vil - part 2 Making the Best Presentation for your ESOP

Journey to an ESOP & Beyond

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| July 15, 2022

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When should a business owner start succession planning?What advice do business owners who sold to third parties have to offer me?Will all of my employees become owners if I sell the business to them?

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This is the second part in a series of episodes to go into how the CIM - confidential information memorandum is prepared. In this episode we discuss how the company overview should be thought out and planned for dealing with the best practices of presenting the company, leadership group, strengths and weaknesses and other critical areas to prepare for on your journey to an ESOP.

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[0:10] Hey everyone this is the theesopguy so happy you could join us today now the if you listen to the Cruella de Vil part 1 that was the English theesopguy today I'm back and I want to start off this episode with this.    [0:27] Music.    [1:08] All right let me let me go into what just happened there so the bad the bad baroness lady who is the evil villain is kind of toasting herself at her big party or Soiree whatever,  and the.    [1:24] Estella who becomes Cruella who is the not so bad villain but they're both villains comes in and she's wearing a white dress and then she interrupts this baronesses toast.    [1:36] And like ask for a light face Collegiate crashes all the champagne glasses ask for a light,  and then she drops the match on the floor and her whole dress burns up from White and it turns into this red dress why did I do that because that scene really does,  um  Help us to start thinking about how we actually make presentations and and you know some of that is just the idea behind getting everybody's attention.  A lot of planning went into that but it's a cool scene and you know it makes you think wow you know.  It just makes you want to watch the movie honestly so anyway we're going to move on from that but this is Cruella Deville part 2 of how to make a nice out presentation.  And then basically what we're focusing on today is part two of what we're going to call what we call the Sim the confidential information memorandum.  And so again what we what we're doing is we're just taking a little bit slower process so we can get into maybe more of the details so that you as you start thinking about your journey to an ESOP.    [2:43] Can make sure that you've prepared adequately this this podcast today is really is really important because the first part what we talked about was.    [2:54] Being able to present in and provide good information.  That's relevant for your industry so that your business model and how it performs in functions within that industry is very well understood and the trends of all that that makes sense in terms of how the company is put together,  what they're doing and not just historical as but also in the forecasted  revenue and financial so so what we're going to do today then is get into the company overview and I love this part because.  Frankly it's just fun to get to know companies and how they function really well we're going to just go through each piece of what I would say is necessary for this part of the agenda.  In terms of providing the company overview so again if you're brand-new to the podcast today thank you so much for joining and if you like it please share it with a friend.  If you're interested in other episodes please go to our website at journey to an ESOP.com you can also find us on Apple podcast on Spotify.  On I think almost every podcast you know apparatus or platform that they have out there so but theesopguy journey to an ESOP and we're going to get started in a second so thank you again for joining.    [4:10] So let me go into the moments like when we look at this this scene because I do I do think it's important and Emma Stone does this phenomenal job in Disney's Cruella and one of the things that she really does well.    [4:23] Is she has this amazing confidence about about her now she's she's a depletion of character she's a so she's also a Stella shoe who becomes Cruella she's both people,  so it's kind of a Jekyll and Hyde type of thing Estelle is a very nice kind of kind very patient with people absorbs a lot of you know in.  Pain and infliction of people may know upon her life and.  Cruella doesn't put up with anybody's garbage and she's ready to go attack attack attack so you have this kind of cool differential and the terms of the different types of,  Bob her personality playing out and so in this scene she comes in and she's like I said she's wearing this with this,  white dress in the whole point of this is because she completely wants to unravel the baroness who seemingly is unravel belie she's just completely poised and full of herself and so but you want her to,  because you want you to kind of crave that that baroness lady she's this and a mess she's mean to people you want her to be unraveled you want her to be,  put to the test in and that's why we love this scene so much so she Sparks up this match and then next thing you know,  so the presentation of it all is is really grabs you right and so.  When I when I think about that in connection with what we're going to talk about.    [5:48] You know a lot of it is trying to understand what we're going to do is obviously get the attention of the trustee in the valuation firm as we go through the SIM,  and although you know business presentations can seem and feel may be boring,  it's important to use as much not just content information but as much as you can in the Sim in general to break up the monotony of just of a narrative.  PowerPoint presentation although there are times in parts and pieces that we're going to sew so that's how it all connects you know again this more about how we make an effective presentation.  And so the the the second agenda item as we go through it is really the company overview and as I get it it's a get started into it I want to say some of the goals and objectives that I have in putting this together for,  the client and working with the client collaboratively.  Is so that we can get into the depth of strengths and weaknesses of the company and how those strengths and weaknesses.  Well they're kind of Connect into a couple points that I think are really important that need to be made number one.  We need to present the company of course all of this is true it's just it's just extracting the truth from the company and making sure it's presented well.    [7:12] The.  The first point is is the company itself has the ability to on a long-term basis be sustainable and go into the future and not have.  Do you know this huge problem it's going to you know they would come about because they're not sustainable so instance for instance like who's our leadership team so we're going to get into that a little bit and what's our transition plan within that leadership team.    [7:41] Some other things about sustainability of the company are going to be things related to how they're positioned in the marketplace,  some of the things that we're thinking about is like do they have the facilities that they need,  do they have the employees they need for potential growth how do they get employees and so so that's just a general idea and we're going to go you know Slide by slide on this but I wanted to get that's that goal says sustainability.  Is important and you know as much as we want a baby rock people's world with something like you know lighting a match in the dress going pool.  We don't really want to be too dramatic or too.  You know there is a business sense of we want to present something that feels in speaks.    [8:32] Predictability and in a sense like.  The uncertainty of what's going to happen in future kind of starts to get minimized so so those are some goals as we start to shape our thoughts in terms of going into.  The company overview so one of the first things I do in the beginning as we as we go through this is I really want to make sure.  That we have described The Entity or entities really well.  What do you mean by that I mean what I want to do is I want to make sure that we if we have multiple entities,  we list all those out and we really explain well,  how those entities are structured whether they're right now right now existing because this is a journey to an ESOP they could be structured as an LLC taxes a c-corp or they could be structured as an LLC taxes and S,  or they could just be straight up in a store see so part of that you know how are they structured their what are their primary business operations what do they actually do.    [9:33] Be as specific as possible in this so if it for instance the company is specifically meeting a certain type of customer in this we want to say like this is the market that they serve.  And so the entity and the structure of those entities is going to be important now that's going to follow the next thing which is going to be you know where are our Company locations like where do we exist.  On the map and so I will actually just use some kind of map.    [10:06] You know typically it's of the us just to show hey we have with we have offices in multiple States,  where are those offices how do those offices in a relay are they Warehouse spaces or are they actually you know offices that admin people have,  so how are there how is their business really structured geographically and so what's important about that though is just is just to kind of understand,  those those locations in the in the reason why they're in certain places so I've had clients well we have to have warehouses and certain States in order to support the.  Cut the customer demand for the products that we have are the customer demands for the services that we have.    [10:48] So the also the locations are going to help us with the connecting points.  The way that we geographically are approaching the business plan and the business model so so for instance if our business is primarily in like just say the Northeast.  And our business plan is we're going to continue to build out market share in other locations we need to talk about that you know how is it possible that we're going to get into these other different locations or.  I've had clients where they're just pretty much going to their business plan that's they're going to stay within one County of that state.  And there's plenty of business for them so it gives us the ability to talk a little bit about.  How the locations of our business actually do contribute to our overall business plan.    [11:42] Now the next thing we're going to get into is this idea of some type of organizational chart I like to go right into the leadership side because I think the leadership.  In an ESOP company again back to sustainability is so important.  So it may be that the ESOP is working through.    [12:04] You know different points of transition for the company to go from.  The existing owner who selling their shares to actually transitioning their rollout of the company and it might be a slower slower process of them selling out,  or not selling out but transitioning out where they maybe they do 100% knees up and then they actually are transitioning their role over a period of time.    [12:29] If the if the company is going to be doing a transition plan where there's more of an exit there's going to be a need to do an organizational chart in a leadership chart,  that will provide a,  a sense of who of how that progression of that of that succession plans going to happen and so I think that that kind of is fairly obvious but it's just something that needs to be dealt with now.  Now digger dig deeper into that and now the question that is going to have to be answered from the from by side is going to be.    [13:04] Are these people qualified to do what they're doing so that's going to be a question that's going to be important now one of the things in the presentation,  you know of course it's not just putting together a presentation it's actually making a presentation that I will do is I will I will spend some pre time working through with the leadership.  In terms of how are we presenting maybe different departments or divisions of the company and what each of these heads of the Departments are going to kind of want to get into and talk about so preparing that because we want the trustee,  feel like there's a qualification of hey we understand our business and we're we're a very highly qualified.    [13:45] Leadership team and so there's going to be maybe in the presentation you might want to have some brief resumes that help too.    [13:54] Show and provide the depth,  of those people like how long have they been with your organization or how long have they been in the industry what were what were what were they doing before they got here especially your top three to four key positions you're going to want to really push hard on that to make sure,  now you might want to have a larger org chart and what I call an accountability chart that helps to to show where the right seats right people in how do how do they all function as a SS.  Team to work towards the goals and objectives of the company so,  so I can't say enough about the leadership group I think it's going to be really important for the company to work through who they are and how they're functioning.  Now the next thing I would say that we really need to deal with is the customer relationships and So within the customer relationships what we want.  Now whether their customer relationships or the companies more transaction we want to we want to help to provide some information on how the company is.    [15:02] Is structured to their customer so so there might be in this is something that would have been identified really early on in the planning process hopefully there might be a concept of customer concentration,  issue and what I mean by that is we might have say more than ten fifteen twenty twenty-five percent of the total revenue.  Being dedicated to Maybe One customer now the flag goes up and immediately when that starts to happen because on the trustee side.    [15:33] They're going to be asking questions about hey what happens if you lose that Customer because,  all of our analysis at this point should be focused in on like the risk side of,  what would that mean for our for our company so what we need to do is address that and so a typical presentation slide might include in the last fiscal period,  what was the percentage of Revenue was the sales and the percentage of sales,  for each customer and so that will be a helpful slideshow now if you don't have any customer concentration maybe you just list your top ten customers and you can show that.  If you do have some customer concentration what needs to happen next and your presentation is you need to go into describing the relationship in the length of the relationship that you have and what we're doing in this part of the presentation is we're looking to.  Any potential concentration risk so what are the what's the relationship look like who manages the relationship on our side.  Is it the owner who's selling their shares is it the key project manager how is how does that work is it a large customer but with lots of Divisions that buy separately,  I have one client who has a very large company that they work with but they do business separately with each of the departments in the division so the buying power and the B decision power.  Comes from each of those departments which is managed within the whole company on their side.    [17:00] By the project managers themselves so so there's there is a diversity and a differentiation between not just having,  one big company it's they've actually have multiple relationships with one company through these department so that could mitigate some of the some of the potential.    [17:19] So something else I wanted to go into and it.  I got kind of specific with the customers but but this could kind of go backwards a little bit and then we'll reconnect it but is the idea that the company really does if they have an overall plan a business plan,  it might be a really good idea to kind of lay that out and one one thing if you're listening to the podcast a lot of companies.  Nowadays in the Middle Market space have gone through the EOS process the Gino Wickham book called Traction in one of the things about that.  EOS concept is is it forces you if you're going to do it the right way to do what they call a vision traction organizer.  And one of the things I love to do with clients that are EOS companies is have them give a good overview of that of the VTO the vision traction organizer within this part of the presentation.    [18:17] So again if that's not you don't worry about it but the similar or very comparable type of,  document would be hey here's our here's our strategic plan here's our one-year plan these are that these are the things we're going to go and try to accomplish now the VTO are the business plan what it does is it helps to.  Provide a good overview of how the business thinks,  and what they really are trying to connect to in the marketplace what are their strengths and weaknesses what are the major issues that they're kind of dealing with what are the what are the some of the rocks that they have challenged their leadership team to accomplish.  What's there on a VTO there's a three-year and A Five-Year Plan and one of the things I'll point out about that is in this is where kind of everything does get integrated a little bit is that.  The v t 0 is going to suggest certain numbers as well or your business plan might suggest certain numbers,  well those are going to need to kind of create the the,  connection point in the storyline to your forecast which is going to come in the next section and I'm going to save the financial part of it for a whole nother episode part 3 because there's a lot to talk about with each one of these.    [19:33] The VTO really kind of sets up the sets the stage for how those goals were developed now one one thing about these are very soft Concepts and you can be,  from from a business management standpoint you can put some Credence on this or you can say it's not that important.    [19:50] The VTO and other types of business plans usually incorporate I'd say almost always a either a mission statement.  A wire purpose.  To the organization a core value statement or key core values of the company a vision statement that says hey this is who we're going to become this is the mission is kind of like why are we here.  And then just the core values pulled together.  Who you know what's going on inside of the of this company relative to what they care about what's important those are going to be important I think in a company overview,  because they set a lot of the background and the context and in the in the nature of who.    [20:38] The company really is which is a reflection.    [20:42] Of their leadership so this is going to kind of connect to it can connect into the leadership section and,  at the end of this we're going to get into is what's happening next year you know specifically what the company is going into so we can we can connect that in a lot of different places and I wanted to I wanted to mention that that's that's a very important,  part of what we should be thinking about so now going back to the company overview one thing I wanted to stress,  is you know as we as we left we kind of talked about the customer side and that's important and we left that for a second to gonna get big picture again.    [21:21] I want to talk a little bit about again helping the the trustee and evaluation form understand,  what it is that the company does and so part of that is who they do it for which is the customer base,  and then the deeper part or the specific part is what are are as a company what are our products and what our or what are our services or what are the combinations of both of those,  and so in some cases.  You could be a distributor and you're Distributing these products and specifically what are those products how do you get those products how to how are they sourced and who are they sourced by.    [21:57] If it's a service type of business how do you provide the service so it's not just these are my list of menu of services that I have or this is my menu of products there needs to be a little,  depth behind those in terms of developing what those are to understand specifically,  what does products and services do for the actual,  customer who's buying them what's the benefit or the poor,  the value that the customer is receiving why should they buy this product and service from your company so so when you get into these kind of conversations it's like it's very helpful we're not doing a narrative on each of these slides of course,  we're going to do the narrative in the depth in the conversation that we're going to have in the presentation all we're going to want to do is is in the slide show.  Is really identify everything we can think of that specific now one thing I think is you talk about products and services is as you as a company have multiple products and services likely.    [23:02] There's usually some level of knowledge of hey this is a product and service that's very very much a winner for us this is our most profitable product or most profitable service.  And then there's going to be other services and products that maybe aren't as profitable so one thing you should definitely I dress address is.    [23:24] Where what are the winners and what are the less than winners now it this is a good time for us to.  Step out of the presentation for a second and just and talk a little bit about Esau planning.  I noticed this with some companies that have grown a lot over over a period of years they don't think as much about,  segregating customers segregating products by profitability they kind of everything gets lumped together and so it really is helpful as a business strategy,  two,  to provide and due to the the detail analysis on reports to determine what is more profitable to the company I keep using profit as the main measurement and it could be other measurements I mean it could be.  Strategically it's helping the company get to a certain.  Place that we need to get to so it doesn't always have to be profit but I think in general it needs to be Profit just because profit yields increase in profit yields increase in cash flow increase in cash flow yields a higher multiple.  Value it also yields.    [24:30] A stronger more sustainable ESOP company so so that's a lot of digression of round the products of services but I def don't skip it like get into the details,  if you have examples of your products and services certainly you know and if it's appropriate bring them to the presentation or walk them through the,  the plant to show them how that works to help them they you know as a trustee and evaluation firm,  I'm sure they understand they've been through all these different plants it before but it's yours it's your baby and how do you uh know how important is it for you to address and identify those specifically.    [25:07] So as you get through the products and services what might happen to is you may have certain niches or not niches but the divisions of the company or Departments of the company,  so this is a good opportunity to get detailed in a lot of times the divisions and the Departments are geared around certain products and certain services so,  your company may be structured you know that way and so now we're kind of setting up a little bit about who each of these divot how to each of these divisions function in the company,  and what we want to do is make sure that there's a good understanding of not just how they function but how their run is are there some key people within the department,  that are running those divisions and how do they how do they function and manage and how do they really bring value to the business,  and the more like I said The more depth to that like in depth in terms of people.  Depth in terms of development of those those divisions are there some startup,  develop departments or divisions in the company or are there some very mature ones so you can kind of think of departments and divisions in a business as you know a rollup of all these different maybe businesses are profit centers,  and as you can detail out and really think about those divisions.    [26:28] It's important to address unique issues or unique value points for each of those divisions now.  You know you might be listening to us and say oh my gosh we're going to get into so much minutiae.  Um the question I have for you right now is like how much then you should be get into.  Now let me let me just say that my opinion is on minutiae is get as much in the PowerPoint presentation slide show as you possibly can.    [26:56] And then you know I guess the key idea behind this is kill them with.  You killed them you know give them as much data give the trustee and valuation firm as much data points overwhelm them with detail I like doing that and the reason I do is because I can always dial it back but I can always dial it in.  And so,  getting them a lot more data data and detail is going to help to provide them with a bigger and a deeper sense of of the strength and the depth of your company,  so like I said if you want to get into some super duper minutiae developing like hey an org chart for each division developing a workflow process like how do we actually produce the product or how do we how do we actually.  Do the installations of the product get into the details behind all that so that they can really get and understand how the whole thing functions and I think that's that's very valuable to you.    [27:56] So moving into again this this can be done in organized a lot of different ways so I'm going to give you kind of segments of different things.  One and you could even start with this one of the things I think is really helpful is to do the storyboard like of the company how did it what are the key historical events of a timeline and if the company is 30 years old like let's start at the very beginning,  who founded the company how did they find the found the company who were the owners at that time maybe they're sitting in the room right there maybe they've transitioned already to another another,  group of owners or another generation so tell the story like what were the people doing and what how I think start the company what was what was going on.  Then key Milestones later down the road of the timeline might be and we've expanded into a new market in we created a whole new product and that product now has a following it could be,  we achieve this certain Milestone of of a certain type of award that the come up the industry recognizes or,  we achieved a certain internal Milestone of having so many record numbers of sales so it could be a lot of things and again kill them with minutiae.  Keeps using that word kill them I'm sorry.  Overwhelm them with minutiae because I think it's just really good for them to have a lot of data points and let's let's stop for a second and just talk about who the trustee and the valuation firm there there what kind of people they are right.    [29:24] They are people personality-wise that are probably going to be more on the not your type a type of personality that's needs a little information and can make a big decision right away,  they're processing people which means they really got to get into the data and got to think about it and so you're kind of appealing to that type of personality.  For me fortunately I've spent 22 years working with these kind of people they're seated there,  in our in our world their CPAs but they love to think about all the details and make sure that they understand everything so.    [30:01] So let's step back into it that's that's one of the reasons I like to just,  overwhelm everybody with lots of minutiae so the timeline gets us through like the story of how the company you know was really created in developed and it's I think it's really a good a good thing to have however you do that in your presentation,  and you can highlight in that story.  Certain certain aspects of it of you know what happened and how did we get here and what happened and how did we get there so so this is a good opportunity when you start thinking about the presentation itself.  Again leaving the slideshow but talking about who's who's doing the talking here,  it's look it's normally going to be maybe the CEO could be the founding member member owner if there were specific events that,  that may be a key division manager or key division,  key person established or lead then that would be a good place for them to talk so these are good places for us to now interact and engage in it's not,  you know me standing up there you know talking through the whole presentation like I'm doing that as a cell site advisor.  But I'm in the process of and I'm doing really engaging and interacting my whole team to really debut who the company is and who these people.    [31:21] So another aspect of the company overview I think is really important and it needs to be addressed well is who are the employees you know how many I mean the question that the trustee and valuation firm are going to have is hey how many employees you have,  we're always going to ask that question we should be asking that all the time because of the.  Complexities of Aesop's but sometimes what I've done is I've given some data points with the employees.  You know how long have they been there so what's establishing some longevity data points how old are they on average I'm do I have an aged Workforce to have a young Workforce,  what the experience level is of the workforce so some of the some of the background behind that is like that,  success of the company as we know it is going to rely.  In most companies is going to rely on how the company is structured and who their people are as we think about the human resources the the Assets in the company are the people and how do you how does the company leverage those in the past,  who are they in the present and how are they going to how are they looking at the people going forward the beautiful thing about an ESOP.  Is that what we're really doing is we're taking a company that has a great group of people and a great culture and we're more layering in this retirement benefit that gets people,  aware over a period of time of of that they have a stake in the game now they have they have an opportunity.    [32:51] To really build some wealth in their own portfolio by being a really really excellent employee and in every year by being there a long-term every year accumulating stock now.  That,  helps us to kind of make the case ahead we're going to the company is going to succeed really well with all these other things that were working on but we're also going to be able to really leverage this ESOP with these employees so giving people a sense of who the employees are.  And it could be strengths and weaknesses there I mean we could we could really talk about the strengths of the employees we could talk about the opportunity to continue to expand the employee base I know one of the major questions right now.  In the meetings I'm having is hey how do you get new people you know if you're losing people because unemployment is better than an all-time low.    [33:43] I like to talk a little too about the employees you know it,  education experience that kind of thing you know how much are they how much nutrition has happened in those.  Companies to like how much turnover have we had so just things like that are very helpful for the trustee to understand to really get a sense for who the company is.  In addition to that it may be helpful to do as we talk about organizational charts with key managers it may be helpful to also,  in some cases what we have are companies that are some of them are EOS so they have this EOS accountability chart that helps to kind of put graphically on a one of the decks on the slide decks is a.  Who's in the company where do they do an accountability chart kind of puts people right seats in the right places in there.    [34:38] Accountable to the functional responsibility of those so so those are powerful tools looking at how do you present that really well and show the depth of your company I think those are the definitely goals that we would have as we start thinking through,  detailing that.    [34:55] Now as you go through another aspect of this is what we're going to want to know you know because this is just part of company overview is anticipating the risk questions that the valuation firm is going to have.  So right now in this is always been the case but right now it's a very very big issue is what are the suppliers of the company so,  if I buy company if I buy materials or inventory if I buying materials for for certain jobs how am I getting get that inventory like how am I going to buy it and who am I sourcing.  So supply chain is a big deal so there should be some kind of slide on who your major suppliers are what is the relationship of those suppliers in terms of,  the reliability the length of time you've worked with them any major issues related to if you if those suppliers kind of went out of business who would you next who would you go to what's your plan B,  those are very helpful conversation so definitely have a slide on suppliers and be prepared to to get into the Weeds on that.  So as we get into the next part of the company overview I want to get into also.  Understanding every business has its own level of competition of course in so.    [36:09] You know we need to address at least at least with one slide a competitive analysis of hey what's our if we can estimate what our market share in the in the in the market or who are our competitors how do we stack up with our competitors,  so depending on what data is available we're going to want to address the even just kind of listing out the companies that we compete with.  And just an honest assessment of that is really helpful to determine how do we how do we stack up against the competition are they are they significantly larger than us what's their approach to the marketplace what's our approach.  Out of the competitive analysis what's going to happen is we're going to get this opportunity.    [36:50] To talk about our competitive advantage in terms of these are certain things this is why a company would wood or a customer with choose to do business with our company above the competitor.  And there might be very strong competitive advantages where we're really niched so well and in generally we're pretty much not doing a lot,  this is going to translate into some conversation related to the business development process but in that vein we don't probably do a lot of Business Development because people are coming to us they demand,  and there is a demand for our product our service and that's really that's awesome if we can show that.  The competitive side it could be so competitive though that we're more in this bid and proposal type of scenario where where cost is so our prices so,  difficult to control.    [37:43] And that in this is this is going to be a weakness right I mean if we have if we have that type of environment so in if that's the case then how do we address the the type of business that we're in.  In managing the risks related to being in a very competitive industry and so,  how do we differentiate ourselves as we as we go about it or how have we differentiate ourselves so we can justify maybe a little bit of a higher higher price than your competitors or,  maybe where our business strategy is a low-cost business strategy but we found a way.  To reduce the cost internally so that becomes an that translates to real profit for us it could be,  technology that we're using our could be some proprietary product that we have that is very very simply better than other so so I think there's a lot you know when we talk about,  competition in this company overview portion of the presentation there's a lot to talk about.    [38:42] And there's a lot to work through in terms of strengths and weaknesses they are that they can that hopefully they can walk away with.  Part of that is to really have a good planning session where you're really thinking through these things and not just trying to.    [38:59] Walk that out in the middle of a meeting like this you'd want to you want to really get a better strategy going into it and so that's part of how you might develop the strategy,  now that's going to lead us to talk about the next natural thing which is hey how does revenue get created in our company like what's the source of Revenue is there a business development process that helps to continue to build revenue.  Art what's the nature of our revenues it recurring versus non-recurring how do we end up,  getting new companies or new clients or new customers into our under our company how dependent are we in the forecast is we're starting to build the groundwork for the forecast on,  organic growth New Growth acquisition growth what does that look like from a revenue creation standpoint.  One of the one of the aspects of this for an ESOP transaction is going to be what is the Connecting Point between the selling shareholders.    [39:53] In their generation of our generating Revenue opportunities so like let's just say for instance I have a client who are a company who.  The owner is very much key to the business development side then and he or she is so well known that.    [40:12] If they're not there anymore the company would have a significant downturn in Revenue I mean that's that's something that has to be really thought through in addressed now.    [40:21] The beauty of an ESOP is we can we can keep that person engaged at the highest level.  And be continually doing that and can't be compensated for that so it's not like I'm going to lose that but I do need to address that.    [40:36] And so the thing is is.  Business Development anything about anything it's going to be how much is it how much is depending on a person versus how much is depending on a process.  And what I want to do overtime or I want to I want to basically present what's really there of course but what I want to do is continue to build stronger business processes,  in my organization that are less dependent on people and their talent and more dependent on I process.  Because I can duplicate and I can repeat a process and it's predictable I can scale a process.  And I can't necessarily scale if I'm running out of talent so so understand that the comp that caught the company overview is to get into the details behind,  who how the business development process works.  It'll connect to sales and marketing obviously what is the marketing side that's just as important as the sales side but those are all going to be as much as they can be process driven and when we present we want to present based on those processes so that.  The buyer who is the trustee can really understand you know what those are now that's going to lead us to talk about.    [41:52] Who our target market is and who are we aiming at what's our purpose what's our profile customer.  One thing that some companies have graduated or matured into is this understanding that they can't take every customer that comes in the door.    [42:08] They have to have some type of client a customer acceptance process because.  We all know that when we segregate out our clients or customers not everybody is going to contribute as much as the other so so some of this business is business management.  Theory that says hey we should really segment our customers by profitability and evaluate who they are and we may want to even.  It's some level maybe Cole client customers because,  they may not be contributing to the bottom line they may actually be contributing negatively even from a from a either from a profitability standpoint or from a draining our resources,  standpoint and then who then so who are our best customers and that's who our Target markets going to be so,  we want to articulate our target market we want to we want to clearly lay out these the type of entities that we really are working towards getting.  Or keeping or growing and then we need to articulate,  what the companies that those customers are really looking to buy so is it that we have such a full service support to the customer need not just buying the product and service but we have this incredible customer service side.    [43:26] That customers absolutely have to have in order to for them to keep going and have the quality experience how do we how does that,  value proposition stack up again back to the competition and so the better we can articulate the value proposition in the target,  the better we're going to be able to show that the strength of the company in terms of its Business Development site and what all that does is it's laying the groundwork.  To that will link it in to the financial Story the financials themselves which is going to come next.    [43:59] We're going to be able to build and connect the dots between why our forecast really does make sense because it's kind of really a,  picture and reflection of all of those where all those numbers come from so that's that's really what we're doing throughout the entire company overview.    [44:16] So as we close the company overview one of the things I'd like to leave with is this idea that hey the company obviously has all of this going on,  but let me let's talk about in 2022 or 20:23 or whatever the next fiscal period is let's talk a little bit about,  what we're really focusing on as our key initiatives.  And those again could have come from my V t0 they could have come from a business plan but we're going to just specifically like lay down like nail down,  what does initiatives are where we are in the process why it's going to make a difference and it gives us an opportunity to talk about.  What we're doing to work on the business and it adds a little again more depth at the companies not just doing what it does every year it's got actually got a very vibrant game plan,  that again connects back let's connect that back into the forecast to show how some of those initiatives really do add credibility.  And integrity and strength to our financial forecast so we're kind of as we build this whole thing we've touched on.    [45:20] The first part of this podcast series was really going into the industry overview getting the trustee and evaluation firm to understand what kind of business were in what the trends are,  then we went into the details this one on who the company is and how we are structured how we do things and and really why and some of the specific areas why we're so good at what we do,  and had the opportunity to really to pull some of those out and then really minimize some of the potential weaknesses that we might have.    [45:48] Then now we're going to we're going to go forward when we get into it the next part is going to be to go into the financial highlights oh thank you so much for listening today and again as you tune into this you think it might be helpful please share it with a friend subscribe to the podcast.  And if you need to check out our website at journey to a nice up.com for other episodes that might be helpful to you.  And with all that keep on keeping on and we'll see you on the next step on this journey to An esop

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About Journey to an ESOP & Beyond

ESOPs are gaining traction. In the "Journey to an ESOP & Beyond” podcast, Phillip Hayes explains the process of the ESOP transaction and addresses ESOPs from a business owner’s perspective. The "ESOP Guy" illuminates the simplicity of ESOPs as he debunks common misconceptions that ESOPs are immensely costly and complicated.

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