Name: Live Webinar: Preparing for a Successful Transition
Uploaded: 2026-10-22T18:46:10.359Z
Duration: 1 h 31 min 29 s
Description: Live Webinar: Preparing for a Successful Transition

Transcript for "Live Webinar: Preparing for a Successful Transition": Good afternoon, and welcome to the first session of our third annual private business owner succession academy webinar series hosted by PKF O'Connor Davies. Before we get started, I'd like to go over a few housekeeping items so you know how to participate in today's call. We're pleased to offer live closed captioning throughout the webinar. To access the captions, please use the stream text link located in the chat section of your attendee panel. You'll have the opportunity to submit text questions today to today's presenters by clicking on the q and a tab on the right hand panel. You may send in your questions at any time during the webcast. We have a lot of material to cover, and if time permits, we will make an effort to respond. If we cannot get more questions, a response will be sent post event. A copy of the PowerPoint slides and the recording of today's webinar will be made available to you via email four to five business days post event. As we near the end of the webinar, we do have a very short survey, which will be prompted, and your response response is greatly appreciated. At this time, I would like to introduce Cynthia Adams Harrison, managing director with PKF O'Connor Davies Center for Private Business Owners. Cynthia? Thank you, Harleen. Thank you so very much. Welcome, everyone, and thank you for joining us today At PKF O'Connor Davies, the Center for Private Business Owners helps owners navigate the interconnected needs of their businesses and families, from building business value and developing future leaders to planning for succession and preserving their legacy. We bring together the firm's multidisciplinary resources to help owners clarify their goals, evaluate their options, and create a coordinated path forward. Through programs like our Succession Academy and personalized advisory services, we help turn complex decisions into practical steps that support a strong future for the business, the owner, and the family. Joining me today, I have three esteemed colleagues that I am so excited that are joining us again. This is our third Succession Academy, and these gentlemen have all been a part of previous academies and just thrilled to have them all with us again today. And so we'll begin to introduce them to you right now. Robert F. Murphy is Managing Director and Co Head at PKF Investment Banking, and he brings over thirty years of experience in investment banking and corporate development, including more than 300 financial consulting and m and a engagements. He previously co owned two m and a firms and held senior operating and financial leadership roles, including senior vice president of corporate development at a public company. Robert has closed transactions across diverse industries with private and public companies and private equity firms in nine countries on four continents. Known for his objective advice, negotiation skills, and professionalism, he's a former CPA. He holds FINRA Series seven 7924 63 licenses, and he earned his BS in accounting from the State University at New York at Albany. Thank you so much, Robert. It's such a pleasure to have you join us again today. Happy to. be here, Sydney. Well, thank you. I'm so glad you're here. And Alberto Sinesi, who's managing director and co head at PKF Investment Banking as well, brings more than fifteen years of experience in investment banking, mergers and acquisitions, and corporate development, advising public and private clients on domestic and cross border buy side and sell side transactions. His experience spans business services, industrials, manufacturing, consumer products and services, e commerce, food and beverage, and retail across both North America and Europe. He has also provided valuation and transaction opinion services to global asset managers and financial institutions. Before joining PKF Investment Banking, Alberto spent nearly twelve years at Lincoln International and began his career at Deloitte Consulting. Thank you, Alberto. Once again, it's a joy to have you here. And not last, certainly not least, Himanshu Chaudhry is managing director at PKF OConnor Davies, and he brings more than twenty years of experience in ESOP advisory, transaction advisory, corporate finance, consulting, and valuation services. He's an advocate for employee ownership, and he helps business owners transition their companies to ESOPs and avoid... Advises boards on ESOP valuation, management, and sustainability. His transaction experience spans home building, construction, health care, and financial services. He is a frequent speaker at industry conferences, including the National Center for Employee Ownership, and he's a chartered financial analyst, holds Fender series sixty three and seventy nine licenses, and earned his MBA in finance from ICFAI. And so today, we are more than excited to present to you the Building Your Succession Roadmap Readiness and Transferability and Choosing a Path. So what we're going to explore today really covers a number of different areas. The the goal of this particular webinar as a little different from previous years, which were really information, to enhance information on different paths that you might go down, this particular webinar and the one following are going to cover owner readiness. These are action steps that you may consider now as opposed to just information gathering that you may have been experienced through the other academy sessions. So this is all action oriented. We want to explore odor readiness, what is building a transferable transition ready business, understanding business value, the leadership readiness that must be enhanced as you make these transitions, certainly governance, and then we'll dive into some available paths, basically family transitions, ESOPs, management buyouts, private equity, and strategic sales. But we'll look primarily today at family transitions, ESOP transactions, and selling your business. So no further ado, let's dive into these topics. One of the things we want to highlight, and this will be more conversational as we move through these slides, and our wonderful, specialists here are going to dive into certain things that that capture them in in terms of their specialty areas as well. So a transition is not just one decision. And I think when owners look at change, as we all know, change can require many different steps. And a lot of the first aspects of change are contemplating change. What are you thinking about? How are you thinking about it? Hopefully, you're thinking about it regardless of where you are in your in your business journey, but that what is going to happen to your business with your business, given all the hard work that you have employed for all these years, and what will you need to consider as you move through this transitionary process? It's not just one cons... One decision. It's a bunch of different connected choices. And so what must be true before you choose a certain path? We're gonna find this out today. When you leave this webinar, you should be much more familiar with what are the action steps, what do I need to consider as an owner as I go about making this decision? Now many of you may have already been down the path in making these choices. Many of you are just beginning now to consider them. So wherever you are in your journey, this webinar is set up to help inspire, maybe create some lights going off here and there about things you may need to do that you did not consider previously. So by the end of today, you will have some idea of where you are in the readiness process, how do you strengthen the transferability of your business, How do you improve continuity, your confidence, and your optionality? What options are you putting together as you strengthen the your ability to really truly build your business. A lot of times you need to build the business before you can actually employ transaction decisions, whatever that may be, whether it's an intrafamily, an ESOP, and or selling your business. And we're gonna compare different pathways, and we'll have Bob, Alberto, and Himanshu go through some of these different pathways as well. So we're gonna build from readiness to creating a direction. And for the owner's transition, what's really important to consider here is what do you what do you really want your life work and stewardship to look like in the next chapter? And one of the things that don't necessarily get addressed very often is how are you going to move through this transition, not just the technical aspects, but emotionally as well. And, again, when we talk about a transferable business, can the company perform without you? Gentlemen, would you mind addressing why this is important? Yeah. So... Yeah. For sure, Cynthia. Again, if the company is very dependent on you and you are going to make a sale transaction, it's one gonna impact value, and it's gonna impact how they structure the deal. Right? Because the business really can't fully survive without you. Right? So you wanna make it as self sufficient as you can to make the business more attractive. Hey, Himanshu. What do you find when owners are considering an ESOP and they have been the prime focal leader? What needs to. be considered then? Cynthia, my experience is not much different than, what Robert just described. And the thing is, all you always have to consider is the business running you or you are running the business? So when you are running the business and if you get away from the business and business is still running in good shape, that's when the business is qualified for a higher multiple. So it affects the valuation of the company and the businesses that are less reliant on the owner of the company, they are more successful and their valuation is better than the other businesses. Okay. Good. Important... Very important points. And whatever you're considering as the right path for you, the succession must fit your own objectives. That also will relate to the family as well as employees as you move through these transition decisions. So readiness. What are we looking at when we're talking about readiness? And, basically, we're looking at four different dimensions, and each one will affect another. So an owner... The owner transition and readiness is really what is the purpose of needing to make a decision about your business? What is the timing, the financial, the independence, and a compelling next chapter? We just mentioned that briefly. But, you know, for the owner, being ready can really cover a number of different both personal and professional implications. And so I think, you know, most owners identify very closely with their business. I've even heard it many times by owners and families call it another child. And so when you're dealing with the significance of that, being able to make decisions that also include your values, your family needs, certainly what the employees might be needing, and and your long term legacy. Even through a sale of the business, we're talking about the legacy of the business, of the wealth. What do you want that to do for you? And, also, what is that next chapter gonna look like? Many, many owners don't take a look at what's going to happen when the... Through this transition process. And one thing I do wanna highlight here is that there is no such thing in my book as retirement. And so an owner will always, in one way or another, either through, an ESOP and a sale, be connected to their business legacy. And so the retirement piece may be moving into, a family office endeavor, philanthropic endeavors. There are many other chapters to be written regardless of what path you take. So when we look at business readiness, gentlemen pipe in here, what is durable performance? What arc is clean information and recurring value and a credible growth story? Let's speak to the readiness there and and what you look at when you are diving into the transitions you do. Alberto? Yeah. I can start. Cynthia, one of the things that we look at is just the quality of the financial information. One of the aspects we typically assess as we think about running a sale process at some point down the line is the, the way the company frames their financials. Right? And I'm specifically talking about having the financials being on an accrual basis. Alright? Because that's gonna be key as you launch a process because all of the perspective investors will look at the financials on an accrual basis. Alright? So that's one piece, and the other piece is looking at the overall quality of it. Right? Whether the accounting is is correct, whether the percentage of completion to the extent it is relevant has been done the right way. Right? So that's that's more on the, call it, organizational front. The other piece is just being able to articulate the company's history and then the vision going forward for a buyer. Alright? Because not all of the business owners have had the opportunity to think about their own business in the context of a sale process. Alright? So that paradigm shifts. Alright? Because you really have to think where the buyer's hat. Can I ask you anything to add on the ESOP transaction? Yeah. So I'll I'll make two comments. One in general. So you you, have in your slide about, recurring value. So the thing is, when your business has recurring revenue, strong cash flows, and consistent cash flow stream, those businesses are valued at a higher multiple rather than the businesses that have inconsistent variable cash flows. So that's number one. And then, as far as the clean information and financials are concerned, on the ESOP side, the trustees like to see at least the reviewed level of financials. Now that depend... Depends on the size of the company. So, generally, when the company is less than $100,000,000, the trustees are agree... Agreeable to review financials. Once the com... Once you are dealing with the company that's transaction... That has a transaction value of more than $100,000,000, then the trustees are probably going to ask for audited financials. So those are the level of, financials that we would need for an ESOP transaction. Oh, good. Thank you. Thank you. Very helpful. And when we look at leadership readiness, having a capable team that can move forward with the transitionary process is very important, and I think identifying gaps, we'll get into this in a little bit more. But as you identify, what are those gaps? What is the authority and the accountability and the succession depth? What does it look like? And what is going to be needed if there is to be a successful transition of any of these different paths? And certainly governance, when we look at governance, there are a number of different factors that come into play to be ready. Most people don't necessarily understand the different structures that governance can take. We can look at family. We look also at corporate governance. So what what needs to happen on both of those levels to strengthen the viability of a successful transition? So being ready to implement governance structures is also gonna be something that needs to be considered. So owner readiness covers a number of different areas, as we have mentioned, emotional readiness, the family and business communication and dynamics readiness. One of the things that is highly overlooked are how are you communicating these needs for the transition to family, to employees, and what is the timing of that? How do you structure timing to be effective? A lot of times people may misstep and say things too soon or not necessarily communicate effectively during this process. So we need to take a look at at the communication process as well. When we look at operational readiness and financial readiness, we're looking at all of these things being proactive versus being reactive. And it's always better to take into consideration those things that you may need to moving forward than look back and go, oh my goodness. We should have done this or that. Okay? When we look at leadership succession and readiness, have you communicated with potential family and management successors? And when do you do that exactly? Again, back to the communication piece. And clarify new roles and expectations. One of the things that doesn't necessarily get done during the process of a transition is communicating what your expectations are and even outlining the development process of how that happens. How do you develop next gen leaders? How do you develop your management team to be able to step in and take on these leadership roles when there has been certainly a primary leader in in in the process historically. And then we wanna make sure that you've identified your core values, and that will drive the vision of the business for the future. And whether we're talking about a next gen, an intra family, or we're talking about ESOP and or selling the business, the values often determine what kind of transaction that is gonna look like, whether it may be strategic on the sell side or how are you pulling your employees together, and what will be the glue that holds them forward as they continue on to make appropriate and effective decisions? And so, again, what is a a thoughtful readiness assessment tool? It will certainly include emotional readiness, the communication, operational financial successor, and family and business alignment. Now this is a very small print of some of the questions that an owner may consider along the matrix of I haven't done anything yet, I'm thinking about doing some things in the early stages, yes, there has been some movement, I have done quite a few things, or I am completely prepared to move forward. So some of the questions we're just gonna take a look at here, and you will all get this handout, so you'll be able to take a little bit more time. And even I would encourage you to go through this yourself and take a look at what questions need a little more work. What have you started? What haven't you started? And I know you have probably started some of these things. I have a clear vision for my personal family and financial future after the transition. Again, going back to what does the future look like for you? I have not even considered that to I am absolutely sure about what I'm gonna be doing after the transition. I'm emotionally prepared to reduce or relinquish day to day control of the business. This is the most difficult question and statement for owners. Thinking and knowing what technically may be coming down the road as far as a transition goes and emotionally being prepared and ready to do so are two different things. And with the passion that I've experienced from owners, the passion and commitment to these businesses, often another child, is is just intense. And so being prepared that this journey is going to come with a lot of excitement, some hesitation, even some defensiveness about the timing of when these things get triggered along the way. Being aware of your emotional needs, having people to talk to, making sure family is aware of that and sensitive to it, making sure there are conversations around that for family is important. And and that... What is your role going to be as you relinquish more control of the business to what are you mentoring? What is your wisdom after all of these years providing to the ongoing success of what the business will look like and feel like in the future? Have you identified potential successors and have realistic confidence in their readiness? Sometimes that's very easy and sometimes it's a little more challenging. The developmental aspect that goes... Aspect that goes along with that is also very important. Are you willing to invest the time in developing your successors? It's it's one thing to have it identified, someone, some management team identified in in what will be your leadership strength moving forward, but it's quite another to take the time to develop the leadership that's going to be acquired on any one of these paths. So understanding the business value and what I need financially from a transition. This is a this is a tough one because oftentimes, what an owner may need to financially transfer their business and what the NextGen can support in that transfer can be quite complicated, and you may need to get creative. And there are many, many ways to do this, especially in an intra family transition. There are lots of ways to slice and dice how the next generation can participate and uphold what the requirements are going to be needed by the owner in in their estate planning work and what they'll need out of the business itself. I'm open to considering the succession path that best serves the business family employees and my goals. I think a lot of times people believe that there's only one path that they can take when they need to pause for a moment and truly explore, and this is part of what this webinar is all about, truly explore what are they going to consider and what is possible. And as long as your business is healthy and you have done the correct things to add value, your options become greater. And so it's it's making sure that you you always consider building business value regardless of what your transition plan is. Have you discussed intentions and expectations with appropriate family members, leaders, and advisors? I think this process begins by beginning to talk about it with family. You know, I'm I'm thinking that we may need to consider some transition paths going forward. This is going to be important as you talk to family, especially trusted advisers, and and begin to get the flow of thought processes going as well as that conversation that supports your next steps. And I am prepared to make timely decisions, including those involving difficult trade offs or family dynamics. This may come into play when we consider I need to implement some structures to help support communication paths such as governance, both family and corporate. It's never too late to establish a board of advisors, which which seems to be, you know, much more lucrative to owners versus a board of directors, but that could be necessary given the size and complexity of your business. But establishing advisors that can help you through this process and also help sustain the health of your business are are very important decisions to make. So this little business succession tool is something that you can go back to as you begin to fill out some of the areas that are most important. I'd really like for Harleen, Cynthia. Robert and I'll... I, Cynthia, can, I make one. one quick point, Yeah. Please. Please. Please. or maybe too quick? You know, again, on that slide, you talked about value. Right? The importance of knowing what your value is. So, again, any good investment banker, m and a adviser should be able to, work with you and and figure out what a realistic value range is. And then once you have that, then you can do some planning. So if you have a wealth adviser, if not, one can be brought in, say, well, this is what I would get, and here's my lifestyle. Here's what I wanna plan for. All those other things, Cynthia, that you get involved in thinking and helping folks through and to figure out will that meet needs. And at the same time, if that value is something that doesn't work for that particular business owner, then advice and input from an investment banker of, well, how can you get that up to another 5,000,000 or 10,000,000? What would that look like? What do you need to do? Right? And, again, same thing with an ESOP. I'm I'm sure, Himanshu, right, you know, that conversation can happen up front of what those financials would look like and the tax benefits and all that. Right? So, again, I remember... think just an important piece. in planning. And I remember, Robert, being in a client situation with you where you were advising the client that they're gonna have to... If if they wanna get prime value for their business, there there is more that they need to do before. they consider what that is to your. point. Right. And it's important for them to know, and and they may they may have enough energy and enough time to go implement that, whether it takes a year or three years, or they may be at their point in their life where I don't really wanna take that next step. I'd rather find somebody who can go take the companies to that next level. Right? But just having that understanding base to make that right decision. Absolutely. Himanshu. Yeah. So ESOP is, no different than, the other traditional sale methods, Cynthia. So we obviously, when we go in, we do a feasibility study that is called phase one of our process. And during that phase one, we go into discussions with the company that, what exactly they need to do in next few months to be ready for the sale to the ease of trust. And, yeah, I mean, it's it's a process and, we tell them that what kind of financials we need. If they don't have reviewed financials already, we may be okay with quality of earnings. And, all those things, we tell them upfront. And then the whole feasibility process takes about two months, which includes the range of value, includes the cash flows for the business owner for next ten years if they, decide to stick around. And finally, one of the most important pieces, what's there for the employees? So we show them that what's an employee's ESO balance is going to look like in next five to ten years from now. So depending on the salary level that they provide us for an average employee, we show them that, statistic as well. And, those are the main decisions for the. business owner to move forward or not with an ESO. Oh, thank you. Thank you. Thank you, Himanshu. Very helpful. And so some of these things you may have covered already, but when you do look at your business enterprise diagnostics, Himanshu, you just basically answered the question. What do you look at in terms of some of the specific areas here? Do you look at a whole company approach, a detailed review of key business metrics, historical, I would imagine, management initiatives and plans. Who are the key players? Do you do organizational reviews? I'm sure you do all of this. A SWOT analysis. How do you benchmark key metrics? What are some of these things that are are more important to pay attention to, gentlemen? I mean... Yeah. I mean, first of all, Cynthia. Right? I mean, we we clearly need to do all this. Right? We need to do it to understand the business, to give the owners the right advice, to position the company properly if we're going to market. So we definitely do all these. Alberto, you wanna hit on one or two particular? Yeah. The one that I I certainly like understanding well as we think about a potential engagement, and even if it's not necessarily a a potential prospect for us, given the person we're speaking with. Good advice on is just understanding the the depth of the management team, alright, and who's gonna take over post closing, alright, to the extent the owner or the owners are not planning on sticking around. Alright? Because we talked about the repercussions of value, but I think it really goes... It goes beyond that. To me, it's it's it's also about the survival of the business, right, and the continuity of the business. So it's really understanding who is in charge with respect to specific areas, number one. And number two, who holds the the customer relationships? Alright? Are those relationships embedded in the... At the institutional level, or are they really concentrated on one person? Right? This is what we define as key man risk. So that's one area, alright, that. I personally like to dig deep into. Yeah. And, again, Cynthia, as you know, we could spend twenty, thirty minutes on the slide, which we don't have time, but I just point one other thing that maybe doesn't pop out here is growth opportunities. Right? So a a big aspect is what are the growth opportunities for this particular company? And it may be things that they're already thinking or planning that they can execute, but sometimes it goes beyond that. Just what are the growth opportunities that these different investors and buyers can come in and implement. Right? That's the attractiveness, the more growth opportunities, the higher value. So, again, that's, you know, all these things on the slide, and I'd say the other big thing would would be growth. K. Great. Thank you so much. We do have questions that are popping up and we're going to take time as we finish through the webinar to address your questions. So please know that we will get to them as we move through to that area. So building a transferable transition ready business, what is involved in making sure the business... We've talked about this a little bit, but without the current owner at the center, gentlemen, I'd love for you to address reliable earnings, customer resilience. How do these things play in to solidifying what a transferable business looks like? So operating discipline, the leadership depth, you have mentioned that a bit, but could we just dive a little deeper into a transferable business? Yeah. So I can I can go into the ESOP first? So as far as the reliable earnings are concerned, I believe we already talked about the reviewed financials or or a requirement for quality of earnings to do any sort of transaction. I mean, the thing that you want to make sure is that the business owner is not expensing any personal expenses into the business. The financials are clean. So that's the primary objective of that because if you think about valuation of any business for for any any kind of sale, most of the businesses are valued as a multiple of EBITDA, and you want that adjusted EBITDA to be a clean number for the valuation to be appropriate. So so that's where the reliable earnings are, very important. And as far as the customer resilience is concerned, so again, it's, it's, one of the risk factors that you have to assess for the business that, is the business really reliant on two or three customers? If that's the case, the business is more risky than a business that has 40 customers, not really dependent on one or two... One or two customers. Barbara Roberto, you wanna address some of these topics? Yeah. Yeah. I can I can talk on on the earnings piece here, Cynthia? Again, there's different dimensions here. Right? You have one dimension, which is just clean financials, right, on accrual basis. Alright? And that... And that's p and l balance sheet. Alright? That's one. The other piece, which is equally important as you think about sale process or or or an ESOP transaction, I think it is really understanding the nature and the business model of that particular business. Alright? And really understanding how sticky some of those customer relationships are, alright, how sustainable growth is going forward. Right? Whether there is any particular customer and or supplier that accounts for a significant portion of revenue or or vendor spent. Right? Because understanding the revenue mix, understanding the margin profile really does have an impact on valuation. Right? And that also means benchmarking the company's performance against what the market says, right, with that particular sector. Alright? Just something that keeps... To keep in mind, you're sending. Very, very good. Very good. Any other comments to these topics? No. I think that. covers it. Alright. Thank you. So, again, key indicators of a transferable transition ready business include financial performance, leadership depth, owner independence, value proposition, operational discipline, the customer, strength, governance and decision making, risk management, and transition preparation. So there are a number of different areas that we need to consider when we are building a transition ready business. So these are all things. Some some of you will help excel in a number of these different areas, and some may be somewhat challenging in that, okay. Well, I haven't really paid that much attention to this particular area, so I need to dive into that a little bit more. And this is all just to enhance your awareness, your perspective on what you need to entertain as you build a transition ready business regardless of what the path is. So we're gonna take a look now at business value, leadership readiness, and governance when it comes to building your transition ready business. Durable value reduces dependence on the owner. So relationships, decisions, and know how reside primarily with the owner. That is obviously an owner dependent business. That there are systems and metrics and managers that carry more of the enterprise. Is your business repeatable and transfer ready? Multiple parties can see and finance a credible future. I think one of the areas I think that's really important is that owners may not necessarily realize the strength of the relationships that they have carried. They they appreciate them and they know them, but they may not necessarily anticipate how those relationships are a little tricky to transition to a next generation, to even an ESOP sale, and certainly selling an outright sale of the business. Do you wanna speak to that a little bit about how that can come into play and what you've seen in your experience? Yes, Cynthia. I can I can talk about it, and then, Bob, you feel free to chime in in. here and Michael as well? But, from an m and a standpoint, Cynthia, I've personally come across situations wherein all of the relationships, right, are held, you know, At the at the company level, right, there's specific people who handle day to day communication operations, right, with vendors and or, customers. That's one end of the... On the spectrum. The other spectrum is... And we had sold a business that kind of fell into the second category wherein relationships are really residing primarily with the owner. Alright? From an m and a standpoint, generally speaking, acquirers really look for a company that either has the owner or owners sticking around for a period of time. And within that time frame, those individuals, right, continue to develop the second layer management team, or there is one designated person, right, who takes over the business, right, from the owners. Again, it's it's all about preparation. It's all about thinking ahead. Right? And sometimes we come across situations where the business owner did get an offer, and now he or she doesn't know what to do with it. Right? Because, you know, there is no continuity plan. But at the same time, we also work with business owners who are maybe a couple of years ahead of that exit. Right? So I think it's just being strategic about it. Right? Taking your time and thinking about the different scenarios and your goals, right, as a as a business. owner. Again, though, if if you have a situation where it is very owner dependent, so perhaps the owner is still heavily involved with sales and customers and 40 or 50% of the business is really reliant upon his his relationships, then that's gonna tend to impact structure. That's where you start getting an earn out. You get some type of financial incentive because how does a buyer know this owner will stay around long enough to get everything transitioned? So, again, whether you're selling the company, doing an ESOP, or never plan on selling, or you're gonna pass it to family, you know, the owner wants to make himself less dependent. Right? He wants to get relationships to others. He he wants to be, you know, working on the business, not in the business. And the better they can do that, then the more likely that business can grow and do well regardless of whether they're ever gonna sell it. Right? Just helps for the next generation, the generation after that. Yes. Yes. Thank you. I'll I'll I'll add one thing, on the ease, of sites, please. Cynthia. So, eventually, it all boils down to preparing the successor for the business. So statistically, and this is not a great statistic, most of the ESOP companies last around about eight to ten years. And main reason why the ESOP companies sell the second time to a private equity or to a strategic buyer is that they did not prepare the successor. And because there is no successor to take over the business, that's the reason they have to look at other avenues and eventually sell to a private equity or to a strategic buyer. Good. Thank you. Thank you. Very important to note that for owners and family and employees. So leadership readiness, again, you just spoke to this, means more than naming a successor and that there is role clarity around leadership teams, that there's bench strength, that we fill in gaps and prepare to do this well before we even consider the transition path that we're going to go down. I mean, where where do you need that bench strength, and how do you develop those that are already in leadership positions or will be succeeding into leadership positions? And, obviously, retention. You need to keep these people. And so how... What is your strategy on the retention side to make sure that you have who you need in place to create the successful transition. And governance. Governance is something that most people don't necessarily look at first, but when we look at, you know, the owners and what their expectations are and their their rights, so to speak, and how they communicate effectively, governance are really structures that help communication happen effectively. And all shareholders, whether you're a family member, whether you are an employee, can benefit from structures of governance. Certainly a board of advisors, a board of directors, that's on the corporate level. These are where we employ, strategic boards to help with decision making, accountability, and you can have a management structure, which can be seen as a governance structure within a business, that helps support the strategic initiatives that could be decided at the board level or advisor level. And certainly, for a family, a family business structure or a family governance structure can do two things: it pulls the family together, it creates communication advantages, it can certainly encourage harmony and reduce conflict, and it's an educational tool that can be used by families to learn more about the business, to learn more potentially about either an ESOP process or selling the business. So governance structures are wonderful tools to use as vehicles to get effective processes in place for any transition. If we're looking at a quick readiness check, we reveal where to focus first. You may just want to look at this after the webinar and choose an area that you have not necessarily had much attention employed in, whether it's your own owner readiness, your business readiness, leadership, what is the depth of your bench and or governance structures. These are all important areas to take a look at. And so readiness does not choose the path for you, but it narrows it down to the right questions. Strong foundations give you more options, and being prepared on all of these... In all of these areas give you more options. So we are gonna look at five common paths serving very different owner objectives, and those five are the family and family transition, intra family, a management buyout potentially, an ESOP, a private equity, and an alright... An outright sale. So we're going to explore today more deeply the family transition, the ESOP, and the strategic sale or selling your business, and we're gonna get into those right now. So this is another little chart to help you compare the continuity, liquidity, owner control, and employee legacy of all of these different transition paths. I'm not gonna spend that much time on this because we wanna dive into, the other areas and explore those more deeply. But this is something for your reference when you can take a look after the webinar at the handouts that are provided. So, intrafamily transition. I'm gonna speak a little bit to what's involved in considering through an intrafamily transition. What are some of the things we want to look at and what are some of the things that are most important as we do? Succession variance. So one of the things that that happens here is from a controlling owner, we start to get more complicated as we look at the next gen and as we look at cousin collaboration. Once... The more removed you get from the original entrepreneurial owner or someone that has bought out a business many years ago and has successfully continued through it, when you get down to the next level of siblings, they may be a little more disenfranchised. One of the things we know is that with siblings, there is no authority. So the the control of the owner, if it is parental, which it most likely is in an intra family, without that parent figure, the siblings have no authority based on their relationship. So that can be a little dicey, and I've seen a lot of families start to unravel when the owner either passes or is not in the picture anymore, and those siblings struggle to find the authority in the room. That's, again, when governance structures can come into play. You take that one step further with cousins, and it even becomes more disenfranchised, through branches of families. And now we're dealing at the cousin level, which may or may not have, a whole lot of connection to the original core values of the business. So this becomes trickier for an intra family transition as we move through each generation. Key family business challenges are obviously generational succession in that one out of three of all family businesses move from a G1 to a G2. That is a challenge. The cohesion of the family interest, again, given the chart we just looked at, as you expand down to the next gen siblings and then cousins, family interests can become very disenfranchised, very different, competing, and conflict can certainly surface at that point. So again, these governance structures that were mentioned earlier are very, very important to creating communication pathways that the family can talk about what is happening here. Balancing financial returns and expectations. Every family member will have different ideas about what they want out of the business. And so making sure again, that there are ways of communicating and making sure that we create harmony versus disharmony is critically important. Again, dealing with conflict or disputes through governance processes and structures is very, very... I wouldn't say necessarily easy, but standard protocol to create within a charter how you're going to deal with conflict and disputes within the family. And those things safeguard and create boundaries and understanding so family members can truly appreciate what is expected of them as they move through some of these difficult decisions and need to communicate effectively. And estate and inheritance challenges is another. One of the things I like to talk about with my family businesses is, you know, it doesn't necessarily have to be equal, but it needs to be fair. And so how assets are employed through any family business transition and considered, do people work in the business? How do they work in the business? Under what conditions do they work? Are there conditions do they work in the business? And when it comes to estate planning for owners, how is that next generation? How are the assets going to be distributed? Not as I said either equally, but fairly. And and how do you do that? How do you slice and dice that up? That's all a challenge. Other unique intra family succession challenges is obviously the ownership and and disagreements and conflict. When you get two brothers who are succeeding a business or two sisters or three or four. I've had five family members, in a succession process with the owner. And so what happens then and how does that work in in terms of managing conflict? There could be a lack of leadership. We don't have anyone. Sometimes there is a bridge. I call it a bridge of management who will make sure the business functions effectively until that next generation is prepared, is developed to take over. And so, those are ways of dealing with some of those challenges. Again, the lack of communication, poor estate planning, lack of succession planning. Be proactive about moving into this transitionary process. It's always easier to do this earlier than to try to do it later and be reactive. Moving from an entrepreneurial leadership style to a professionally managed business, many entrepreneurs struggle with how do I create a professionally managed business when they have not necessarily needed to do so, but growth will trigger that need to do so. So it's also very important to make sure that we are priming the business for what will need to happen as we incur a path or or go down a certain path. And then lack of family and or corporate governance, again, very important. Leadership needs of the business and potential successors. Primarily, it's identifying where the gaps are, what are the potential successors going to need to do, whether it's develop relationships externally, whether it's getting... Gaining credibility internally. So we need to make sure that we're mentoring and that development is not only just identifying who leadership is going to be moving forward, but also how do we mentor, how do we develop what's going to be necessary in some of the gaps as we analyze what leadership is gonna look like in a family transition and a management transition. Again, one of the things I think that's very hard to do for family owned enterprises is for management to understand the intrafamily transitional process. And what I mean by that is they have also been in roles for probably a very long time, many, and they have enjoyed that relationship to the owner. As the next generation becomes more involved, as succession is more highlighted, it becomes very confusing oftentimes for management to appreciate and understand what their newly defined roles might be. So having open communication, making sure you're clarifying the reporting changes, organizational changes. If someone's even coming to a meeting, why don't they show up at the next meeting? What's going on there, and how do we prepare for continuity with a management transition? So both owner transition on the personal side and the business side needs to be considered. And so all of these different categories, you know, can the business support a transition, and and what does the future look like on the personal side for the owner? So we're looking at both business and personal owner transitions and have you truly explored all of the dynamics that play into this. And now we are going to move into Himanshu, who's going to give us an overview of the succession and ESOP value proposition and dive a little deeper in this for all of us. So thank you, Himanshu. Thank you, Cynthia. And, everybody should be aware that we are doing another webinar on November 12. So we will go into much more depth on ESOPs at that time. But we will still, cover cover some ground today. So, employee stock ownership plans have been, around for more than fifty years now. There are about 7,000 employee owned companies in the country. If you ask me, that's disturbing statistic for me because the advantages that come with an ESO, the number actually should have been double or triple, today. So, if I have to divine... Define ESOPs, what an ESOP is, what I can tell you is ESOPs are multifaceted, and it's a blueprint of success for privately owned businesses. So it comes with significant tax incentives. It retains and attracts key employees. The company cultural enhances with increased retirement benefits, flexible financing arrangements. It's a much more controllable transaction with shorter transaction timeline. And finally, the sellers are able to lose no control, through being on the board, running the company, and they are able to create their legacy. So what is an ESOP in technical terms? An employee stock ownership plan is a qualified retirement plan that is governed by ARISA rules that were implemented in 1974. It gives the employees an ownership stake at no cost to them. Company shares are held in a trust and allocated to individual employee accounts based on compensation and service or a combination of the two. Employees vest over time similar to four zero one k plans, and their account values rise or fall with the company's stock value. So one of the traditional methods in ESOP is ten forty two transaction. And when ESOPs came in in 1974... So in nineteen seventies, eighties, and nineties, everybody was doing c corp ten forty two transaction. Then congress in 1998 introduced s corp, ESOPs, where the company becomes totally tax free. Okay? So just to give you a flavor on ten forty two transaction, a traditional ten forty two transaction allows a qualifying c corp shareholder to defer capital gains taxes by selling stock to an ESOP and reinvesting in qualified replacement property. So the key requirements include the ESOP must own at least 30% of the company after the sale. The seller must meet a three year stock holding period, and the stock has to be acquired through, the the stock acquired through options or employee benefit plans is excluded, ESOP allocations are restricted for the seller, certain family members, and shareholders owning more than 25%. The seller must purchase QRP within the fifteen month reinvestment window. So that fifteen month reinvestment window means three months before the transaction close and twelve months after the transaction close. The eligible QRP or Qualified Replacement Property includes stocks, bonds, debentures or notes issued by domestic operating corporations. So the traditional ease of design, as I said, it remained largely unchanged since ERISA's enactment in 1974, despite significant shifts in tax laws, businesses, and the workforce. Now in 1998, as I was mentioning, Congress, came up with the s corp rules for ESOPs where the company can become totally tax free. Now the trade off is the business owner or the seller, they trigger a capital gains tax. So they have to pay capital gains tax. The other thing is in a c corp ten forty two transaction, the sellers are not... As I as I mentioned, the sellers are not allowed to participate in the ESOP. They cannot receive allocation from the ESOP. But in an s corp ESOP, that design overcame. So, the sellers were allowed to participate in the ESOP with an s corp ESOP. So as you can see on the slide, in our opinion, the ESOPs should evolve to better serve the original purpose as innovative corporate finance tool, address critical workforce needs, and provide more tax efficient management incentives. Alternative designs are possible under existing law. So I want to mention that at PKF O'Connor Davies, we are, we are the pioneer in Roth ESOPs, which is one of the unique designs with ESOPs, and the economics are significant. Significantly more than traditional ESOP or in some cases, private equity transaction as well. So critical workforce segments are employee groups that create disproportionate value for an organization. Every business has 20% employees that drive 80% of the revenue for the company. They are identified by their impact on the value chain, the difficulty of replacing their skills, and the scarcity of the available talent. So in a business situation, the example is essentially the key management people, and you need to take care of them. And that's where, there are warrants, stock appreciation rights. However, those are tax inefficient structures. So if we can come up with something that is more tax efficient, that's gonna help everybody. So in Secure two point o, that was enacted in 2022, that allowed for defined contribution plans to offer participants the option to receive employer matching and nonelective contributions as Roth contributions. This provision applies to contributions made after 12/29/2022, with implementation guidance provided in IRS notice twenty twenty four-two. So as I mentioned, the Roth feature is available to the ESOP, and, the whole ESOP community should take advantage of it. So what a Roth ESOP structure is? So, essentially, as I mentioned, the company is an escort ESOP. So the company is not subject to any federal income tax going forward because all the shares are held by an ESOP trust. And most of the states follow the federal. So in most of the states, the state corporate taxes go away as well. Now with the Roth ESOP, the individual participants will have the option to convert vested contributions or balances to a Roth account. So there are two main situations where the Roth makes a lot of sense. So one situation is when you are young and you know that your tax rate is going to increase in the future, so you have some investment, you pay taxes on that now with the Roth election, and then the withdrawal is tax free. The second situation is a leverage return, and ESOP is a leverage return. So think about a company that is valued at, let's say, $50,000,000 enterprise value. You are putting almost same amount of debt on the company, so the equity value is very low at the time of the transaction close. So at that time, it makes a lot of sense for the seller of the business, for the key management people, and all the rank and file employees to elect for the Roth and take the benefit of the increase in share price. So the redemption and Roth ESOP structure. So we... When we design the plan, we do a big redemption. And because of that big redemption, the equity value is very low, and that's the time all the individuals, including the sellers, management team, and employees are able to elect for the Roth. So there are a few distinguishing factors between the traditional ESOP c corp ten forty two and Roth ESOP transaction. So in a traditional ESOP, there is a ten forty two deferral opportunity where you can defer your capital gains taxes. That's not available in the Roth ESOP. However, the company becomes totally tax free. And in my experience, the sellers, when they take a seller note, they get paid faster in a Roth ESOP transaction, probably in five to seven years versus ten years in a traditional because the company is tax free and there are more cash flows available. Secondly, the selling shareholders and family members, they can participate in an ESOP when you do the Roth ESOP with an s corp. In a traditional ESOP, it's it's not allowed. You can target benefits to the key employees. We talked about the critical workforce, so that's possible in a s corp or a ESOP design. This is possible to a degree, in a traditional ESOP transaction because you can give warrants and SARs to your sellers and the key employees. However, this is much more tax inefficient. And when you are talking about the Roth ESOP, that's very, very tax efficient, where you are paying taxes at a very low value, and then everything is growing in a tax free account. Then, obviously, we talked about the Roth advantage, so that's possible in a redemption and ESOP transaction. So what are the players involved in an ease of transaction? So talking about the company, on the company side, you need a sell side adviser like us to to to do a feasibility study, design the transaction, and manage the whole process. You need a attorney to assist in the documentation and design of the ESOP. On the other side, to negotiate the transaction, you need a ESOP trustee. ESOP trustee is someone that does this for a living. There are a number of institutional and individual trustees in the country. So, generally, what happens is as sell side advisers, we introduce three trustees... Three proton... Three potential trustees to the company. They interview all three of them, and they decide which trustee they want to, work with. Then the ESOP trustee is not supposed to be a valuation adviser or a legal adviser, so that's why they hire their own team. And these are all independent parties. So the ESOP trustee has their own, valuation adviser. Their role is to write a fairness opinion on the transaction, and they cover things such as that the sellers were not paid more than fair market value. The seller note and the bank loan were all at fair market value terms. So things like that, they cover in the fairness opinion. And then the trustee also need a legal adviser, and their role is to review the documentation that is put together by the legal counsel on the company side. And then in some cases, when you have more than one selling shareholders, some shareholder may want to hire their own financial adviser, accountant, and legal counsel to do their diligence. Now finally, ease of pros and cons. So we already talked about the pros, significant tax benefits, significant benefits for the employees. And the seller of the company, they have the opportunity to create generational wealth with the ESOP Roth design. On the cons side, I mean, most of these cons are really manageable. So the repurchase obligation, yes, there is a repurchase obligation liability for the company. So when a employee leaves, the company is legally obligated to buy their shares back at the fair market value. However, this can all be managed. Most of the times, we suggest our clients to do a repurchase obligation study every three to five years so that they can keep track of what's coming in terms of retirement and how to fund all of that. Ongoing administrative cost, what I tell my clients is that, yes, there is a cost associated with the ongoing administration of the ESOP. But when you account for the tax benefits that come with an ESOP, the ESOP pays for itself. Be it the administrative cost on an annual basis or the implementation cost of an ESOP. The ESOP pays for itself. The perceived complexity, ESOPs are a sophisticated plan. However, it's not beyond human capability to understand ESOPs. And, all we need is one person at the company who is financially savvy. So it could be your CFO, could be your controller, and we can work with them. Unlikely to receive full liquidity at close. So that is true. However, there are there are there are different designs that are possible. So if the seller really wants 100% liquidity at close, we can do some mezzanine financing and get the sellers completely out. Not recommended, but possible. Creates nonproductive debt on balance sheet. So, yes, it's it's the seller debt and the bank debt that is on the balance sheet to to, service the, debt that's the... With the sale of the company. I think that's all on ESO. Thank you. Yeah. You're on mute, Robert. Thank you. Cynthia, I know we don't have too much time. We're gonna just cover a few slides quickly. I saw some questions come in. One or two of them may fit into some of the slides. But, you know, big a big question we get that we constantly talk to business owners about is just timing. Right? So if they wanna sell their business just, you know, what's the right time? And and we look at that really in three buckets, which we won't go into a lot of detail. But three buckets are where the owners are personally. Where are they in their life? You know? You know, maybe they're already thinking about it. Maybe they just wanna go with the grandkids. Like, are they ready to move on? Right? So where are they? Assuming that they're ready, there's two other buckets to look at timing. Right? And a real big one is the middle bucket, which is where is the business today? Is today a good time given where the business is? You know, perhaps you just had kind of a down year. Well, maybe now is not the time. Maybe we should wait a year. Maybe you've got a new product or a new service launching soon. Well, maybe we should get that launched first. Right? Maybe the company is doing well, performing well, and the time is good. Maybe we just need six months to get things ready. Okay? So where's the business is very important. And then the last thing isn't so much where's the economy or the m and a market. Where's the m and a market for your company? So it may not be a great time, but for your particular industry, it may be a very good time. So what's going on in your m and a market? You know, what's going on with inside your company? Are you really ready? If you are, it's a matter of trying to look at those to see when's the right time. Okay? Let's do the next slide, I guess. So, again, as Himanshu mentioned, there's another webinar. I think it's November 12. We'll really dig into selling the company and the process in more detail. But, again, getting the house in order, I think we hit upon a lot of these. I'm not gonna go into into them, but I'll touch upon one of the questions we got. What's the pros and cons of having audited financial statements or reviewed financial statements or what's called the QAV equality of earnings. Okay? So, Alberto, right, many times, we're talking to a business owner, and they may have already just engaged someone to do a review or an audit or they're thinking about it. In most cases, our advice is don't do the review. Don't do the audit. Do the sell side quality of earnings. It's really what buyers are looking for. There are cases where it may make sense to do an audit, but in most cases, the sell side quality of earnings. And the quality of earnings, to keep it simple, is really a financial de bulletins. You know? And they're looking at the business differently of sustainable earnings, of working capital, of looking at revenue rack, of of looking at, concentration in in different data mix. And it's become very common in many of our transactions. We do that... We have a firm do that sell side quality of earnings upfront. So now when you go to market, you know you can rely on the numbers. We're not gonna get renegotiated, and the process will go quicker because every buyer will do their own quality of earnings. But with the sell side done, we're prepared. So sell side quality of earnings over review and audit, hands down. Robert, you wanna go through the process? Yeah. I'll be pretty quick here, Robert. To your point, we're gonna have a separate, session on this. But at the high level, these are the different steps within a sell side m and a process. Right? The part at the top, so item one through five, they really pertain to the preparation phase. And I cannot stress enough how important the preparation phase is in the context of an m and a deal. Alright? What happens during the preparation phase is us as investment bankers working with our clients on better understanding their business. Alright? Understanding and articulating the growth opportunities. Because all of this information will then be packaged in our marketing materials. Alright? As we present the opportunity to potential investors. Alright? That's one. Point two is vetting the financial information and possibly do a quality of earnings analysis. Very important. Robert touched upon this just a minute ago. Item number three is really understanding who the the buyers are for this particular business and position the growth story accordingly. Alright? So work with the team on identifying and, and scoping out the investor landscape. And then the last piece is pulling together a a data room, right, which is a compendium of documents that will be shared with investors down the line and also look at financial projection for the business. Right? Acquires by the present of the business, but at the same time, they're buy... They're buying the future of the business. Then moving on to the bottom part of this chart, once all of that is over, we'll start talking to buyers. Right? Has some initial due diligence, and then there is a phase wherein folks will, at the end of it, will provide an indication of interest, which is an initial offers, which is then followed by management meetings, right, and then the letter of intent, which is a much more diligence type of offer letter, right, or typically a six to seven page document with, investment story, areas for due diligence, exclusivity period, structure of the deal, and the like. So at that point, the client together with us will select the party with whom to do the deal and then grant that particular party exclusivity and then going through final due diligence and then finally signing and closing of, of the transaction. Moving on to the next page, Robert, I'm just gonna pick a a couple of items. here sure. to to avoid. Alright? Because we see some. of these happening all the time. I'll I'll take I'll take the last one here. So bottom right, lack of specificity and detail in the letter of intent. Again, the letter of intent is... It's... Should be a highly diligence letter, alright, where the buyer really articulates articulates the reasons as to why that investor is interested in acquiring the business, the structure of the deal, the valuation, the way that buyer will finance the acquisitions. Alright? And so having details and specificity in that letter is critically important because in our world, that value and that structure needs to remain until closing. Alright? We don't wanna have a repricing of the transaction. Alright? So it's about picking the right buyer and getting down to the critical points in that letter. I'll take one more, which is, not hiring an attorney who is experiencing m and a transaction. Again, we see this all the time. Working on deals, it's not... It's different. Alright? You need to have someone who is specialized in m and a transactions. Right now, we as investment banking, we also work with counsel or existing clients of our... Counsels of our clients who maybe doesn't do m and a, but I think there has to be someone who can provide, thoughtful advice on m and a transactions. Alright? So it's about being prepared, and it's about maximizing value and certainty of closing. I'll pause I'll pause here, Robert and Cynthia and Himanshu. Yeah. Hello? K. Cynthia, Cynthia, just looking at the q and a, I mean, it looks like we've answered several of them during it. I do see one here. If you don't mind, I can I can tackle, and Alberto and Comanche can always add? But, Yep. you know, the the question's about timeline. You know? Like, when do you recommend for business owners to begin evaluating the personal and business readiness for an eventual exit, getting initial idea of value? So there really is no perfect answer, or there's not an answer that fits in every situation. So, you know, generally, we say, well, as much as much time as possible to prepare is always better. In general, maybe it's two to three years. But it really depends on the company. Right? So, again, sometimes we get introduced to a company, and they're ready. Like, they're personally ready. They know they wanna do it. They know why. The company is pretty buttoned up. You get engaged, and you're in market literally ninety days later. Sometimes, we get engaged, and we know, hey. We need six or seven months. Like, you haven't done estate planning. There's some things to clean up in the business. And then other times, it could be, listen, you really need two years. So, again, the earlier you start, the better, especially depending what you wanna do. Right? You know, and if you wanna transition the business to, you know, future generations, you know, you wanna get ahead ahead two or three years and get governance in place and and everything that Cynthia and the team work with. So the sooner, the better. It's good to get an idea of value so you know where you are. So it... It's just hard to give an answer that would fit for everyone. But, you know, in general, you know, a year, two years, three years is is always good. That's, right. there are many companies that are kinda buttoned up and can move very quick. And, again, on the ESOP side, it's a little different. I don't think there's as many things to get addressed to be ready. You know, it's more just really understanding probably, Himanshu, understanding that ESOP and and what the benefits really are and and working it through. Yeah. So the the things with these soft, readiness is a little different. So, not every company is a good fit for an ESOP. And we generally don't work with companies that are too small because it's a leverage buyout model, and you don't want to put so much leverage on the books of a company that is small. So what happens is when you have one or two rough years, the company can actually company can actually have, an ASR that's actually not, workable. So you don't want to get into situations like that. So that's why, when we, start. working with companies, we ask for them to have at least about $3,000,000 in EBITDA and at least 15 employees. That's where you can start the due diligence and tell them what kind of valuation they can get and all of that. Okay. And I I think too on an intra family, it becomes very interesting. There's a few things to consider. As the next generation becomes more interested in working in the business, you wanna start then. As soon as you get family members employed in the business, you begin to think about how can this work out long term, is there interest, and even for owners or shareholders to consider, you can still own a company and not manage it. So, you know, down point. along those lines, it's it's very important to also consider, even if you do not have those family members who want to actually work in the business, they can become shareholders of the business and still own the business and have it professionally managed. So there are a lot of different ways to slice and dice this, but as soon as you have young people, whether they're in high school working in the business and there seems to be an interest... I have seen family businesses where the next gen goes outside. I had one who became an attorney and came in and became the counsel many years down the road. So a lot of different ways for intrafamily, transitions to occur. And is... If you have children, you never know. So I think. it's important to consider and and put some of those questions out there. A lot of people... A lot of owners don't even ask their children if they wanna get involved, if there's any interest, and it's an awkward situation. And I've had NextGen Gen say to me, I didn't even know my parents wanted me to be involved in it. So so it's important. You can have the other extreme where some feel handcuffed to it and some don't even entertain the idea. So I think it's very important, for intrafamily succession to entertain all certain sorts of different kinds of transitions as they move forward. K. I'm not sure if there's any further comments. We're moving into Wrapping up. time limit here. Yeah. So one one last question popped up. I can try to answer it quick, and then I I guess we should close it out. But, you know, a question about if, you know, I'm looking... Moving towards and getting into a transaction. You know, when when do I inform management and my team? You know, who do I inform? And what I would say to that, it it is very dependent. Every situation's different of what we recommend. You know, typically, if you've got a financial person, they're gonna come in first and be in early. Sometimes that's all it is, is the owner and the financial person until you're further down the road. Again, if you've got a COO or a couple of really key people, you may bring them in early. Every situation's different. You... But bottom line is you figure that out. You figure out who you only really need to bring in in the beginning. And then as you get further down, you start to bring in more people. So, again, it's just very situational based is is the bottom line. Great answer, K? Robert. I would also like to suggest that you follow-up with webinar number two because what we will be doing is going and moving from strategy and creating a roadmap to actually how you implement it. So it becomes much more action oriented. What do you do? When do you do it? How do you do it? And we'll have expertise both on the legal side, the tax side of all of these different paths. And also, we have a family business speaker who will come and explore their experience in an inter family situation and what they went through and what their progress has been up to date. So this is what we're going to do on the next webinar, and we encourage you to join us for that. And I just wanna thank everybody so very much for being here today with me and I'm always honored to have you here and work with you in many other ways. So thank you very, Cynthia. much, Bob, Alberto, Thank you. meant you. And for. all of our participants, thank you for taking the time to be here with us today. We really appreciate it.