Ep.#9 [THEME FIVE]   Today we’re kicking off a new four-part miniseries on ESOPs to support Employee Ownership Month.   Why are we spending four episodes diving into ESOPs?    After over 400 Intentional Growth™ training sessions with entrepreneurs, ESOPs have repeatedly been a hot topic people are hungry for more in-depth details about. We end up answering the same questions over and over (which we love!), so we wanted to capture the answers to the most frequently asked questions around ESOPs–with the right experts–in a fun miniseries that can act as an ESOP 101 and 201 for all the people who want to know more.   In this ESOP miniseries, Ryan has a co-host, Steve Storkan, the executive director of The Employee Ownership Exchange Network (EOX). EOX is a national organization that works to expand employee ownership across the U.S. by creating and supporting a network of non-profit state centers for employee ownership.   Today Ryan and Steve interview Dave Diehl, the CEO of Prairie Capital Advisors, about the ins and outs of the transaction and what it takes to turn into an ESOP.     This episode lays the groundwork for the next three episodes. Dave covers how ESOPs are valued, the process of selling to an ESOP, the unique tax breaks and how they work, the deal structure, when and how the seller (owner) gets their money, the role of the trustee, and how employees can begin to earn equity in the company they work for.   Our goal in this episode is to give you the foundation–and context–you need to level up your understanding on how ESOPs work, what it’s like to run a company once it is an ESOP, and introduce the different topics we’ll be diving into in the next few weeks.    Enjoy!   // WATCH THE INTERVIEW ON YOUTUBE: Intentional Growth™ Podcast   What You Will Learn The typical criteria needed to make sense for a business to become an ESOP. What the process looks like–and which advisors are needed–to sell your company to an ESOP. Why the seller gives the first offer in the negotiation process (usually this is the opposite when selling to a third party). Typical ways an ESOP sale is structured (cash up front, seller’s note, warrants, etc.) Why the crown jewel to an ESOP is to also be an S-Corp. Why the company doesn’t pay federal or state income taxes when it turns into an ESOP. The similarities of an ESOP to a 401(k). The role of a trustee in the transaction and how to spot a good or bad one. Why you get to interview and pick the trustee. The characteristics and attributes of a strong ESOP. How a business owner should start with an ESOP. The business owners get to interview their buyer (the trustee). What a warrant is and why it is similar to the “second bite of the apple” strategy many people talk about when selling to a private equity firm.  The employees are not equity holders of the company, the ESOP trust is, and how employees get their shares of the company. Why Steve and Dave are so passionate about ESOPs. The role ESOPs are playing in helping reduce inequality and the growing wage gap.   // USE YOUR FINANCIALS TO CLARIFY A PATH TOWARDS A MORE VALUABLE BUSINESS: Intentional Growth Financial Assessment   Bio: Steve Storkan: As executive director of the Employee Ownership Expansion Network (EOeX) (www.eoex.org), it is Steve’s job to implement the mission of the EOeX of significantly expanding employee ownership through establishing and supporting independent non-profit State Centers for Employee Ownership. It is the goal of the EOX to have 70 percent of the U.S. population living in a state that has a state center by 2025, which they hope will create one million or more new employee owners. Dave Diehl: David Diehl joined Prairie Capital Advisors in 1999 and is a shareholder in the firm. He is also a member of Prairie’s board of directors. Dave provides closely-held businesses with a complete understanding of the best available options for their ownership transition needs. He expertly executes mergers and acquisitions (M&A), management buyouts (MBOs), employee stock ownership plans (ESOPs), estate planning, and other corporate finance transactions. Dave serves as a trusted advisor to a diverse range of clients nationwide delivering highly strategic consultation. With extensive end-to-end management experience and a focus on his clients’ success, Dave helps ensure an exceptional ownership transition experience. Dave is also a CFA charter holder and is on the board of directors of a company that manufactures plastic parts. In addition, he is a frequent speaker in forums around the country on topics including ownership transition, valuation, capital management, and the sale of businesses. Dave is also a past chair of the Advisory Committee on Valuation with The ESOP Association.   Interview Quotes: 11:50  - “I do feel like there is a movement. We talk about the employee/owenership movement and I’m hoping the time is right. The opportunity is here.” - Steve 12:26  - “When you give people equity in the company in which they work, you can’t help but better their lives.” - Steve 18:46  - “When he was able to see what they could do, and he let go and gave them the reins, the changes that they made were incremental but they all just love what they do.” - Steve 24:00  - “Don’t let the noise get in the way of what’s real.” - Steve 29:12  - “And ESOP effectively is a tax-advantaged, management buyout that has certain areas that are sponsored by the government.” - Dave 29:22  - “What an ESOP does is, an owner will sell stock into a trust that every employee (who meets the requirements) is a beneficial owner within that trust.” - Dave 29:51  - “In the greatest case, if it’s an 100% ESOP owned company and it is an S-corporation, there are no taxes paid.” - Dave 31:00  - “This helps to spread the wealth more broadly.” - Dave 38:52 - “I think there is some connection between payroll and the value of the company.” - Steve 56:18  - “The crown jewel to an ESOP is to be a 100% ESOP owned company that is an S-coroporation.” - Dave   Links and Resources: Eoxnetwork.org Steve’s Email: sstorkan@eoxnetwork.org Prairiecap.com Dave’s Email: ddiehl@prairiecap.com   Arkona Website The 5 Intentional Growth™ Principles (5 Videos to Help Clarify Your Vision) Intentional Growth™ Financial Assessment Fractional CFO Services   You can also reach out to me via email at rtansom@arkona.io, or on my LinkedIn.

Ep.#8 [THEME FIVE] You may have heard the phrase “shirtsleeves to shirtsleeves in three generations” when talking about family business and succession planning. The statistics generally back this up, given only one-third of family businesses make it through the second generation, and only 13 percent make it through the third generation (2021 HBR study). But what if that doesn’t have to be the case?   This episode is a real-life story on how Rachel Wallis Andreasson’s family business has successfully passed on their company(s) to the second–and now the third–generation.   Rachel shares how her father started the business with one gas station and what her role was in doubling the company to over 1,000 employees and multiple companies. It was not all rainbows and unicorns. There have been plenty of challenges along the way (setting up family governance, separating leadership roles from ownership roles, deciding how to handle the future direction of the company, who should be CEO, how to handle leaders who are not part of the family, how to handle leaders that ARE part of the family, what role outside advisors play, and how the equity and distributions should be handled). This episode is a shining example for owners of family businesses (as well as non-family businesses) on how to set up your company to last generations.    // WATCH THE INTERVIEW ON YOUTUBE: Intentional Growth™ Podcast   What You Will Learn What led Rachel to rejoin the family business after working in corporate America for a while. How Rachel’s family defined leadership and shareholder roles. Why no family member got an elevated salary for being a “shareholder.” The three benefits of being a shareholder in a family business. How the family transition was handled from the first generation to the second. The various advisors that Rachel and her family used, the roles they played, and whether she thought they were worth it or not. Why the shift from a family business to a family run company was difficult. Why getting an outside consultant when needed was so beneficial to growing the family business. How Rachel and the board decided on how to reinvest and take distributions. Why Rachel left the family business–and how they handled it–after doubling the size of the company.   // USE YOUR FINANCIALS TO CLARIFY A PATH TOWARDS A MORE VALUABLE BUSINESS: Intentional Growth Financial Assessment   Bio: Rachel Wallis Andreasson joined Wallis Companies in 1993 and first served on the acquisition team that doubled the size of the company. Following the acquisition, she spent a year as a territory manager and then moved into the corporate headquarters to create a training department. From there, she added human resources, information technology, recognition, and retail operations. Prior to joining Wallis, she worked at South Seas Plantation in Florida as the training coordinator. Prior to South Seas Plantation, she worked for Pepsico managing Taco Bell quick-serve restaurants in Miami.   Interview Quotes: 10:12  - “It was part of our identity. We talked about it at the dinner table. We all rolled quarters. We were all a part of the business at some point.” - Rachel Wallis Andreasson 16:03  - “I think for your own personal confidence, knowing you can go out and work for a another company–knowing how those companies operate–because if you don’t have comparisons then it’s either really good or really bad when you come back to your own family business.” - Rachel Wallis Andreasson 16:20  - “I would always strongly encourage everyone to work outside their family business.” - Rachel Wallis Andreasson 17:15  - “I would say everything in a family business is evolution.” - Rachel Wallis Andreasson 25:01  - “It does not matter if you are an active or not active in the business, you are a shareholder and this is your equity. And we have clear operating agreements: only bloodline family members are a part of the shareholder agreement.” - Rachel Wallis Andreasson 31:20  - “Dad left a great foundation for us.” - Rachel Wallis Andreasson 33:19  - “We have evolved and as the business has evolved, we evolved with a consultant that we need for what we are facing. We would not be where we are without the help of those outside people.” - Rachel Wallis Andreasson 33:36  - “Family businesses can be either your greatest pain or your greatest joy. And it’s your greatest pain when you are dealing with your mom and siblings and you don’t feel like you’re being heard and you’re not being understood and it doesn’t feel fair. That’s the worst feeling of all because this is your family and they’re supposed to be there to support you. ” - Rachel Wallis Andreasson 36:46  - “Everybody [in the family business] has a different perspective, and opinion, and experience.” - Rachel Wallis Andreasson 48:02 - “Anytime anybody transitioned [out of a business], they said, ‘Give it six months. Don’t take another commitment for six months. Figure out what you want to do, what’s going to make you happy.’” - Rachel Wallis Andreasson   Links and Resources: Rachel Wallis Andreasson, LinkedIn Arkona Website The 5 Intentional Growth™ Principles (5 Videos to Help Clarify Your Vision) Intentional Growth™ Financial Assessment Fractional CFO Services   You can also reach out to me via email at rtansom@arkona.io, or on my LinkedIn.

Ep.#7 [THEME FIVE]   If someone were to ask you to create a short list of companies who should buy your company, it probably wouldn’t take you long. The list is most likely based on logical reasons these buyers would want to acquire your company, because by owning your company, it would help the buyer grow their business and take more market share.   The goal of today’s episode is to better understand the mindset of strategic buyers, why they are buying companies, and what they plan on doing with the company after the purchase. Instead of just assuming why buyers would want to purchase a company, in this episode we get to understand the mindset of someone who has scaled a company and become a strategic buyer of dozens of companies in the home services space.    On today’s show, Ryan talks to Tommy Mello, the owner of A1 Garage, author of the book Home Service Millionaire, and the host of the Home Service Podcast. Tommy shares how he went from two trucks in 2007 to over $150 million in revenue and over 500 employees through a combination of organic growth as well as strategic acquisitions.    Tommy unpacks how he built A1 Garage into a machine and the various components and KPIs that run the machine. Tommy explains how they predictably scale organically as well as how they apply their internal playbook to companies they acquire within their space, both of which have fueled their exponential growth.    // WATCH THE INTERVIEW ON YOUTUBE: Intentional Growth™ Podcast    What You Will Learn What data and activities Tommy and his team work on every day and how that is tied to a future EBITDA and equity valuation.  How Tommy built a team of rock stars that he delegated to without micromanaging them, even though he had problems in the past with trust. Why it is possible for Tommy to buy a company with $1 million in EBITDA and turn it into $4 million EBITDA within 18 months. How Tommy intentionally keeps himself in his “zone of genius” and how that keeps his energy and motivation levels high. How collaborating with the top industry software helped propel A1 into exponential growth.  The role the industry software plays in acquisitions. How Tommy thinks about systems and processes and why that was so crucial to him hitting $100 million. The simple equation Tommy uses to decide what he needs to do every day to hit a certain revenue goal. What traits Tommy looks for in people that will help him scale. What a dream manager is and why it can be so crucial for the company culture. Why giving your employees what they want looks amazing to a buyer and how it can help a business owner find the right buyer. Why Tommy brings his employees on retreats very frequently.  How to hire top talent without betting the farm.   // USE YOUR FINANCIALS TO CLARIFY A PATH TOWARDS A MORE VALUABLE BUSINESS: Intentional Growth Financial Assessment   Bio: Tommy Mello is the owner and operator of A1 Garage Door Service, the host of the Home Service Expert podcast, and owner, partner, or investor in fourteen other businesses ranging from Christmas lights to real estate to mobile apps. In 2010, Tommy became the sole owner and operator of a single Phoenix-based garage door service business, which came with $50,000 in debt. Today, A1 Garage generates north of $30 million dollars in annual revenue with over 250 employees in twelve states. Tommy is a regular contributor to Inc., Entrepreneur, and other business publications on the topic of entrepreneurship and small business as well as a sought-after podcast, radio and television guest. When not in the office or working on the businesses, you’ll find him on a plane headed to exotic destinations or chasing the little white ball around one of Arizona’s many golf courses.      Interview Quotes: 10:56  - “A lot of people always live in the gap instead of living in the game. I’m really just trying to live.” - Tommy Mello 11:35  - “I love what I do. I build relationships. I travel. I look forward to each and every day.” - Tommy Mello 12:18  - “What I started doing during COVID is to just sit and (I don’t want to call it meditation because I don’t love that word), but I like reflecting. I like celebrating the wins.” - Tommy Mello 13:02  - “And success just doesn’t mean money. It means great relationships and living every day like it counts.” - Tommy Mello 20:16  - “400 million in EBITA? What needs to happen today to hit this goal? We put our mindset on that goal and that’s how you build and grow.” - Tommy Mello 26:32  - “We spend a lot of money on development, especially with our leadership team. And I like to call my guys coaches, not managers.” - Tommy Mello 28:00  - “And I think a lot of people go to these events and they write down all these notes. Then they wait for the note fairy to come grant their wishes.” - Tommy Mello 32:00  - “I believe in people so much. I believe in eye contact, tonality, a good handshake. Can you tell a great story. And then I teach them all that. I look for leaders, people that smile, people who have a great relationship with their wife or their husband. Because if they’re not happy at home, they’re not going to want to come to work.” - Tommy Mello 32:37  - “When I find a really good person, I find a place for them.” - Tommy Mello 37:05  - “When you figure out what’s in it for them, what’s important to the people–Do they want to move up the corporate ladder? Do they want insurance? Do they want this dream anniversary after ten years? Do they want to put their kids through private school? Do they need a better home? Do they need better credit?–All of the above! And what I realized was that my dream needs to be big enough to have everyone else’s dream inside.” - Tommy Mello  39:24  - “What I found is that recruiting is the most essential thing in a business. Finding talent.” - Tommy Mello 48:49  - “Feed the people!” - Tommy Mello   Links and Resources: The Home Service Expert (Podcast) The Home Service Millionaire (Book) A1 Garage Door Service Arkona Website The 5 Intentional Growth™ Principles (5 Videos to Help Clarify Your Vision) Intentional Growth™ Financial Assessment Fractional CFO Services   You can also reach out to me via email at rtansom@arkona.io, or on my LinkedIn.

Walker Deibel, author of Buy Then Build, discusses the rise of acquisition entrepreneurs and search funds. He explains the motivations and strategies behind these entrepreneurs and the impact on valuations and deal structures. The podcast also explores the concept of search funds and the challenges in the private capital markets.

Ep.#5 [THEME FIVE]   What is a fair price to pay if you want to hire an investment banker/broker to sell your company? What value and services should you expect in return for the price you pay?   In the middle and lower private markets, these questions have traditionally been very opaque. Typically, entrepreneurs have to find answers to these questions by meeting with multiple advisors, talking to their network, and discussing the topic in their peer groups.   Today on the show, Peter Lehrman, the Founder of Axial, the M&A and capital raising platform for the middle market, is back on to help us shine light into this cloudy area of the M&A market by reviewing the results of the Axial’s 2021/22 M&A Fee Guide.   Axial and Firmex just released the results of an online survey that was completed by 269 middle market professionals from July through September 2021. Three-quarters of them work as investment bankers or merger advisors, and another ten percent call themselves business brokers. Many of them are leaders at their firms.   You might be asking, why is this important?   If you are like many business owners, when you think of hiring a banker/broker, you think of the direct cost that will be taken out of the transaction. However, this hire is almost essential. Doing all the paperwork and organization while selling a company is not just a night and weekend job. If done correctly, an intermediary can provide invaluable advice, experience, and resources to the sale process of a company. They should pay for their fees and more. On today’s show, Ryan and Peter Lehrman not only review the survey’s results, they talk about how to find, negotiate, and engage with an investment banker or broker.   // WATCH THE INTERVIEW ON YOUTUBE: Intentional Growth™ Podcast    What You Will Learn Key insights on M&A advisory fees in the middle market. The different types of M&A advisors and how to understand the differences. The variety of ways M&A advisors structure their fees and engagements. Why it’s important to understand the number of companies a firm typically sells a year. What a firm’s deal flow, the number of active engagements, and the size of the firm mean to you. The different ways upfront fees work and what you should expect from the engagement. How the transaction fee is determined, the range of percentages advisors charge, and what may or may not be negotiable. Why extremely high upfront fees can be a huge red flag and what to do about it. What the negotiables are when looking to hire an M&A advisor. What a break-up fee is and how it works within a deal for the advisor and the seller. How to think about advisor exclusivity and what terms are and are not reasonable to accept.   // USE YOUR FINANCIALS TO CLARIFY A PATH TOWARDS A MORE VALUABLE BUSINESS: Intentional Growth Financial Assessment   Bio: Peter is CEO of Axial and responsible for driving the company’s vision to be the trusted platform where private companies connect with capital. Prior to Axial, Peter worked in private equity at SFW Capital Partners and was part of the founding team at Gerson Lehrman Group, where he helped build the company’s dominant global technology platform for on-demand business expertise. He earned his undergraduate degree from the University of Virginia and received his MBA from Stanford Business School.   Interview Quotes: 06:30  - “So the reason to do the survey is to just put some lines in the sand around M&A advisors (who sell small and medium sized businesses) how they charge their fees.” - Peter Lehrman 11:56  - “Good intermediaries who do good work, who prepare their clients well, who take on assignments carefully are students of the trade.” - Peter Lehrman 12:22  - “Business owners who DIY it, don’t realize that selling a business is somewhat of a full-time job.” - Peter Lehrman 12:32  - “If your day job is running your company and you sign up for a whole other job of selling your company, that you’ve never done before, you just get stuck.” - Peter Lehrman 23:25  - “The right pricing structure for a small to mid-sized business is almost always a two-part pricing model where there is a certain fee which is charged (sometimes referred to as a work fee) that takes the form of a retainer.” - Peter Lehrman 27:31  - “What is the advisor going to do for you prior to engaging with the market of buyers? And what is the condition of the status quo of your business?” - Peter Lehrman 37:39  - “If you’re running a small business and the business is selling for 2, 3, or 4 million dollars, you are going to see certain brokers try to charge you 10% of the proceeds.” - Peter Lehrman 38:14  - “If you’re charging much more than 3%, 4%, or 5% of a 40, 50, or 60 million dollar deal, I don’t think that there’s a particularly good reason for you to pay much more than that.” - Peter Lehrman 38:22  - “The smaller the business, typically, the less tolerance there is, by the business-owner, to pay an upfront retainer.” - Peter Lehrman 44:50 - “You can essentially make the payouts to the advisor structured in a way where they’re getting paid in the same way that you’re getting paid.” - Peter Lehrman   Links and Resources: Axial.net Previous episode: Peter Lehrman - Founder of Axial: The M&A and Capital Raising Platform for the Middle Market   Arkona Website The 5 Intentional Growth™ Principles (5 Videos to Help Clarify Your Vision) Intentional Growth™ Financial Assessment Fractional CFO Services   You can also reach out to me via email at rtansom@arkona.io, or on my LinkedIn.

Ep.#4 [THEME FIVE]   Many entrepreneurs want to diversify their wealth out of their largest asset–their business. But what if you had so much wealth that you needed to diversify out of the public markets into privately held companies?    Today on the podcast, we get a special look into what it’s like to view–and invest in–privately held companies from the perspective of a family office.    A family office is a privately held company that handles investment management and wealth management for a wealthy family, generally one with over $100 million in investable assets, with the goal being to effectively grow and transfer wealth across generations. The company's financial capital is the family's own wealth. (Wikipedia)   In this episode, Paul Moffatt is on the show and shares with us how the family office he works for, Encore One, is structured, why they buy privately held companies, their approach, and what they do with them over time.   Encore One is over twenty years old and focuses on preserving the long-term legacy of their portfolio companies versus buying, gutting, and selling. In this episode, you will learn how Encore One reinvests the cash from their portfolio companies, how they make money, and why they have found their success in long-term holds (ten years and older). One thing Paul really leans into is how important it is to be aligned with their seller and management team on the future direction of the business.   // WATCH THE INTERVIEW ON YOUTUBE: Intentional Growth™ Podcast    What You Will Learn The structure of Encore One and how they run independently under the same trust. Why Paul and his company don’t take out dividends from their portfolio companies. Encore One’s mindset with their portfolio company and why it’s very long-term hold based. Why Paul just focuses on acquiring one or two companies a year versus aggressive growth. What happens when a private equity firm holds on to a company long-term versus buying and selling. Paul’s deal structure and who it best suits. How Encore One manages engagement with their portfolio companies so people are validated that they are professionally growing. How Encore One makes money from all of its entities underneath one big trust.   // USE YOUR FINANCIALS TO CLARIFY A PATH TOWARDS A MORE VALUABLE BUSINESS: Intentional Growth Financial Assessment   Bio: Paul has spent his entire career serving the middle market. Prior to joining Encore One in 2017, Paul enjoyed a successful 16-year career in commercial banking, most recently as a vice president in the Twin Cities Commercial Banking Group at U.S. Bank. Prior to joining U.S. Bank in the Twin Cities, Paul held similar roles at LaSalle Bank, Cole Taylor Bank, and MB Financial in Chicago. Paul has helped advise and fund over one hundred companies in various stages of development with a wide range of transactions and special situations. Paul graduated from Marquette University with a BS in Finance and minor in Political Science. He received his MBA from the Kellstadt School of Business at DePaul University. Paul lives with his wife and two children in Saint Paul, Minnesota.   Interview Quotes: 11:34 - “So we have a pretty clear agenda and purpose once we buy a business and that’s to support their long term growth. And then I get asked the question, ‘What do you get out of it?’ like, how do you get your return? And it’s really about capital appreciation and diversification.” - Paul Moffatt 17:29 - “You can think about it different ways. Maybe a return on equity versus an IRR which would be a traditional private equity benchmark. You can model anything. That doesn’t have to be realized IRR” - Paul Moffatt 20:45 - “I’m not a family member, I’m an employee and manager, I guess. But that’s the mindset that we have when we’re making and creating relationships, creating trust with businessowners, and making investment decisions that are good for the business.” - Paul Moffatt 21:42 - “[The traditional private equity market is] big, it’s profitable, and it exists for a reason. There are potentially terrific outcomes for businessowners.” - Paul Moffatt 36:13 - “Every situation is unique. Our approach, and it’s a reflection of our long term ownership, is that we can be flexible and we realize that there are multiple stakeholders and not just shareholders, that might have an interest in this transaction and it being successful.” - Paul Moffatt 44:57 - “We’re really thinking about creating value, which is not really about cutting costs or consolidating at a corporate level. It’s about–hopefully–creating an exciting growth opportunity for these people.” - Paul Moffatt   Links and Resources: https://www.encoreone.com/  Linkedin   Arkona Website The 5 Intentional Growth™ Principles (5 Videos to Help Clarify Your Vision) Intentional Growth™ Financial Assessment Fractional CFO Services   You can also reach out to me via email at rtansom@arkona.io, or on my LinkedIn.

Ep.#3 [THEME FIVE]   Brent Beshore and his firm Permanent Equity are a perfect example that not all private equity firms are the same. Brent is the CEO and founder, and in today’s interview he talks about the unique approach his firm has in a “messy marketplace” to help business owners monetize their largest asset and step back from their day-to-day work in the company, all while maintaining their legacy.   In this episode, Brent and Ryan talk about why Permanent Equity has a 30-year time horizon (typically it’s ten years or less), how he landed on this model, and why he has been able to raise over $300 million based on their philosophy. From there, Brent explains his approach to acquiring companies–both financially and philosophically–and why he focuses so much on alignment with the business owner and management team of the seller. Brent has a very unique approach to private equity, and today you will learn one of the fundamental principles his entire business is built on: transparency–and why it has yielded so much success.   // WATCH THE INTERVIEW ON YOUTUBE: Intentional Growth™ Podcast    What You Will Learn How Permanent Equity returns the capital to their investors with the desired rate of return even though there is a 30-year hold period. How Brent and Permanent Equity are able to raise hundreds of millions of dollars from investors on inbound requests only. How Permanent Equity makes money without charging management fees. Why Brent’s firm has a 30-year time horizon and what doors that has opened up for his firm and portfolio companies. How Brent and Permanent Equity view deal structures and debt in his acquisitions. Why Brent believes compounding (money and relationships) over long periods of time will get the maximum year ROI for all the stakeholders. Why the biggest check written to a business owner could mean they don’t have any say in what happens next with their company.  Why Brent wants to partner with the existing owners of the companies.  Why transparency is Brent’s main philosophy when it comes to working with stakeholders and how it has avoided bad deals.   // USE YOUR FINANCIALS TO CLARIFY A PATH TOWARDS A MORE VALUABLE BUSINESS: Intentional Growth Financial Assessment   Bio: Brent Beshore is the CEO and founder of Permanent Equity. Brent leads the firm and, more specifically, the acquisition and diligence teams while supporting portfolio company operators.  Brent also serves on the board of Love Columbia, a mid-Missouri-based non-profit.   Interview Quotes: 07:33 - “I was out with a friend and drank too much one night. His wife said, ‘I want to start a business.’ So I said, ‘Great, me too!’ My whole life is a trophy of grace. I always think I’m so smart.” - Brent Beshore 10:23 - “I thought it was going to be straight forward. We just need to due diligence. So I typed into Google ‘d-o-d-i-l-i-g-e-n-c-e,’ do diligence.” - Brent Beshore 19:00 - “How long it takes to buy a company and sell a company, it really gives you about two to three years to do something with the company. The timeline is very short.” - Brent Beshore 19:55 - “If you only looked at spreadsheets, spreadsheets don’t tell you the story at all. They can help tell you part of the story. But the story is all about the people.” - Brent Beshore 29:33 - “People are trying to make tough choices. Historically, the choice has been between, getting compensated fairly for the work you’ve done, and giving up a lot in return.” - Brent Beshore 32:34  - “We do offer, what I would say is, the best of an ESOP, which is a kind, generous, long-term vehicle. And we pair that with the professionalism of private equity.” - Brent Beshore 34:09  - “The businesses that we get involved with, if we chose them well and if we’re doing the deal, it’s not because they’re damaged or a broken business. There’s no rescue going on. They’ll be successful without us. And it’s really important we come from that mindset. Because it’s a mindset of humility.” - Brent Beshore 37:43  - “No one’s perfect and no leadership team is complete.” - Brent Beshore 37:50 - “We’re always looking for opportunities to bring on people with skills which are maybe unusual and experiences that are unusual to help take the business to the next level or two.” - Brent Beshore 42:43  - “Hard discussions have to happen. People are messy. We’re messy. Situations are messy.” - Brent Beshore 45:37 - “I plan on giving everything that we make away, during my lifetime to either the employees that I have or organizations that we want to support. So for me, the game isn’t about accumulation, it’s about how to change the game.” - Brent Beshore 51:37 - “All businesses are loosely functioning disasters that happen to make money.” - Brent Beshore   Links and Resources: Permanent Equity Linkedin   Arkona Website The 5 Intentional Growth™ Principles (5 Videos to Help Clarify Your Vision) Intentional Growth™ Financial Assessment Fractional CFO Services   You can also reach out to me via email at rtansom@arkona.io, or on my LinkedIn.

Ep.#2 [THEME FIVE]   If you’ve seen one private equity firm, you’ve seen one private equity firm. There are about 8,000 PE firms in the United States, and they are all structured differently and have different types of people running them. In this episode, Ryan and his guest Sunny Vanderbeck shine a light on the black box of private equity so you can better understand how it works and how to ask the right questions so you can determine whether the PE firm you are talking to is something you should consider or not. Our guest, Sunny Vanderbeck, is an investor, entrepreneur, best-selling author, and former military leader. Sunny is the perfect guest to dissect private equity because he is the co-founder of Satori Capital, a multi-strategy investment firm founded on the principles of conscious capitalism. This is very unique because Sunny’s firm is an “indefinite hold period” firm rather than a normal private equity firm that buys and sells a business within five to seven years. Sunny and Ryan explain where the money in private equity comes from (limited partners), why they buy companies (investment thesis), the different ways they structure the deals, what it can be like working under the management of a private equity owned company, and how private equity delivers the capital to their limited partners.   This is a great episode to tune into if you want to better understand the world of private equity and how it works.   // WATCH THE INTERVIEW ON YOUTUBE: Intentional Growth™ Podcast    What You Will Learn Where the money in private equity comes from (limited partners) and what their expectations are. How the ownership structure of a private equity firm works and the different roles within a firm. How private equity firms get paid and what the 2 and 20 rule is. What carried interest is and why it’s one of the major opportunities for private equity. How private equity funds are structured and how the capital is deployed. How the typical private equity timeline works and how they impact the fund and each company they buy. What investment periods are and why they matter to the sellers. The difference between bolt-on versus platform companies and how they impact the valuation. When and why a private equity uses debt versus equity, how it impacts the purchase price, and what that can mean after the sale.  Why some private equity firms buy to own and why some buy to sell. What the second bite at the apple means. Why most private equity firms want you to roll a percentage of your proceeds back into the deal (rolled equity). Things to think about–and what it could be like–when working as an employee of a private equity owned company.  Questions a business owner–and seller–should ask a private equity firm when negotiating a sale.   // USE YOUR FINANCIALS TO CLARIFY A PATH TOWARDS A MORE VALUABLE BUSINESS: Intentional Growth Financial Assessment   Bio: Sunny Vanderbeck is an investor, entrepreneur, best-selling author, and former military leader focused on accelerating the growth of mid-market companies and creating best-in-class, built-to-last businesses. Sunny is co-founder of Satori Capital, a multi-strategy investment firm founded on the principles of conscious capitalism. By providing real-world insights from its experienced team and long-term funding with no fixed time constraints, Satori acts as a true partner for its portfolio companies as it challenges them to pursue extraordinary outcomes for all stakeholder groups. Before founding Satori, Sunny co-founded and served as CEO of Data Return, a leading provider of managed services and utility computing. The company sustained 40% quarter-over-quarter growth for more than three years and reached a $3 billion market capitalization, making Sunny one of the youngest CEOs ever to lead a Nasdaq company. For more than a decade, Sunny led the company through all phases of growth and transformation, received numerous honors including an “Entrepreneur of the Year” finalist designation from Ernst and Young, and nurtured a conscious culture for all of the business’ stakeholders. His experiences with building, selling, buying back, and re-selling Data Return, along with his subsequent involvement with dozens of private businesses at Satori, led Sunny to publish his first book, Selling Without Selling Out: How to Sell Your Business Without Selling Your Soul. The book serves as a roadmap for business leaders who face the unique challenges and quandaries involved in selling a business or taking on a financial partner. Drawing on hard-won wisdom earned through decades of experience, Sunny and other business founders and CEOs provide pragmatic guidance on navigating the complicated ins and outs of the sale process while preserving what matters most. Visit SunnyVanderbeck.com for more information on the book and supplemental materials. Prior to founding Data Return, Sunny served as a Section Leader of the 2nd Battalion, 75th Ranger Regiment and led technical teams at Microsoft. Both roles helped him learn the value of principled leadership in extraordinarily challenging situations. Sunny continues to share his thoughts on leadership, strategy, business operations, and long-term value creation as a sought-after speaker and as an advisor and board member to several private companies. He is also a long-standing member of YPO (formerly Young Presidents’ Organization), where he served as the North American co-chair of the organization’s sustainable business network and co-founded the YPO Entrepreneurship and Innovation Network, which helps more than 3,500 president and CEO members accelerate the growth of their businesses.   Interview Quotes: 10:27  - “In the short version of conscious capitalism, profit is not a reflection of value you can extract from a system, it’s a reflection of value you create in a system.” - Sunny 15:14  - “Private equity firms, by and large, outperform the stock market in a meaningful way.” - Sunny 24:45  - “If you don’t have a track record, you’re not going to get any money. It’s the nature of things and I think it’s the world saying, ‘You’re just going to want one really bad to get it started.’” - Sunny 25:03  - “That’s a guy who said, ‘This is more important thing to me than everything else so I’m just going to keep at it.’” - Sunny 37:00  - “Hope is not a very good plan.” - Sunny 40:15  - “Would you rather have 100x your money? Or 3x your money? The more debt you can put on it, the more x your money you get.” - Sunny 45:41  - “Deeply understanding how your business generates or consumes cash, understanding how variable your offstructures are, can help you understand ‘Is debiting is an appropriate tool for what I’m trying to solve for?’” - Sunny 48:48  - “If you have a growing company, with happy customers and happy employees, and lots of cash flow, everything is going to be okay.” - Sunny   Links and Resources: Intentional Growth #170: How One Week Killed the Perfect Billion Dollar Deal with Sunny Vanderbeck Sunny Vanderbeck, website Satori Capital “Selling Without Selling Out” by Sunny Vanderbeck, Amazon Mastering Your Cash Flow - Video Series   Arkona Website The 5 Intentional Growth™ Principles (5 Videos to Help Clarify Your Vision) Intentional Growth™ Financial Assessment Fractional CFO Services   You can also reach out to me via email at rtansom@arkona.io, or on my LinkedIn.

 Ep. #1 [THEME FIVE]   Today we’re kicking off our next mini-series theme: Through the Eyes of the Buyer: Understanding Your Exit Options.    In this episode, host Ryan Tansom is running solo and lays the foundation for the following episodes where he interviews a wide variety of business buyers. Today Ryan gives an overview of each of the 5 major exit options and how you, as a business owner, can decide which exit option is best for you.    When listening to this episode, it’s important to remember the concept of “ownership vs. management roles” and how they need to be separated so you can learn how to build a path forward for each. This is extremely important because your management role and ownership role (your equity) are impacted differently with each exit option.   For example, you could exit your ownership role by selling the equity in your business (your financial asset) AND continue running the company as the CEO if you want, OR you could quit your W2 job while still staying an owner by keeping your equity in the business.    Like many of our listeners, you may be asking questions like: “Even though I don’t want to sell, what are all my exit options and how do they work?”; “Which exit option is best for me?”; or “How do I know if I am handing the keys to my business over to the right buyer?”   Today’s episode is a great starting spot to help you clarify the variety of ways you can exit a company and what’s important to think about as you begin to explore the topic.   // WATCH THE INTERVIEW ON YOUTUBE: Intentional Growth™ Podcast    What You Will Learn Introduction to the 5 main exit options in the Intentional Growth™ Principle #3: Why, and how, Arkona chose these 5 main exit options.  The importance of understanding the difference between your ownership and management roles on the various exit options. Things to consider when looking at an internal transfer/buyout. What an acquisition entrepreneur/search fund is, how it works, and why it’s become popular. Overview of what an ESOP is and how it works. Why an ESOP can provide some huge tax breaks. Overview of the private equity landscape and the different flavors that have started to become popular. Why all private equity firms are not created equally. Ways to figure out if a business buyer’s core values are aligned with yours. How to compare each buyer with your “why.” The typical motives behind a strategic buyer and things you should be aware of. How to use your “why” and your “financial targets” as a lens to analyze the various exit options so you are clear on what you want and why and aren’t left with any regrets.   // USE YOUR FINANCIALS TO CLARIFY A PATH TOWARDS A MORE VALUABLE BUSINESS: Intentional Growth Financial Assessment   Interview Quotes: 07:18  - “There are ownership versus management roles. You can have equity in a company and not have a job. Private equity, that’s an entire industry. It’s what they do.” - Ryan Tansom 09:50  - “There’s almost an infinite amount of ways you could structure your ownership sale and/or what you can do with your job.” - Ryan Tansom 10:00  - “We need some sort of framework to understand what our choices are.” - Ryan Tansom 11:53  - “There’s another layer of this a financial sale most often and that is the intrinsic financial value of a company based on the risk of the cash flow.” - Ryan Tansom 14:14  - “There’s these programs going on in these Ivy League schools now teaching people how to buy companies. So someone could come out of Yale and they’ve got a bunch of student debt, they don’t have a pot to piss in for wealth. But they hypothetically have the skills to run a business.” - Ryan Tansom 17:30  - “If you do a 100% ESOP, the company no longer pays federal or state income tax. So there’s a lot of additional cash flow to service the debt.” - Ryan Tansom 23:47  - “The private equity firms have been going down-market to try buy smaller companies because there aren’t a lot of good companies to buy in the middle to upper market.” - Ryan Tansom 27:00  - “What do you want? What do you want from your business and why?” - Ryan Tansom   Links and Resources: Episode 310: “Intrinsic Financial Value - The Value of a Business Based on the Risk of its Cash Flow with David Diehl” Episode 276: “Branding for Buyout with Ted Schlueter”   Arkona Bootcamp Arkona Website The 5 Intentional Growth™ Principles (5 Videos to Help Clarify Your Vision) Intentional Growth™ Financial Assessment Fractional CFO Services   You can also reach out to me via email at rtansom@arkona.io, or on my LinkedIn.

Ep.#2 [THEME FOUR]   Running a business is a lot like running a sports team. You need all the positions filled—ideally with the top talent—in order to even participate in the game.   Many middle-market private companies are going without positions that are needed in order to participate in the game. So many lack the resources to find, hire, and maintain A-player executives who can fill each function (finance, sales, marketing, IT, HR, etc.). A-players completely take the responsibility for the department, come up with a long-term plan, and execute their strategic initiatives with accuracy against that plan because they have “been there and done that” before.    Without A-player executives, it’s hard to even participate in the game of business because all the responsibility for each department lands on the shoulders of the CEO/owner. This leads to burnout and ultimately a failure to reach the full potential of the company and long-term valuation target.    Today, Ryan breaks down why the middle market struggles to get access to top executive talent and how the fractional executive market is helping fix this problem. He then dives into the specifics of the fractional CFO services industry and the various types of offerings out there. Finally, Ryan interviews two owners who have a fractional CFO and what that has done for them and their businesses.   // WATCH THE INTERVIEW ON YOUTUBE: Intentional Growth™ Podcast    Fractional CFO Overview, Ryan Tansom // 01:00 Ryan goes in-depth about why the fractional CFO space exists and why it’s so crucial to the mid-market, and then he tee’s up the two 30-minute segments with Steve Schaffer and Jimmy Fritz. Why every business–regardless of the size–needs highly skilled talent overseeing each function but typically falls short. Why most companies can’t afford high-level executives even though they employ an outsized portion of the population. Why the fractional executive marketplace is growing rapidly. How a CFO helps a CEO run a company through the financial lens. Why doing EVERYTHING yourself leads to burnout.  How the role of a CFO can help offload many operational responsibilities from a CEO.   What it truly means to be a fractional executive. The different business models of fractional executive companies (and in more detail fractional CFO services).   Owner of Schaffer Manufacturing, Steve Schaffer // 19:30 Steve Schaffer was born into his family business. Like many second-generation family business owners, he grew up working in the company. In 2008, he bought the business from his dad and took over the long-term family company. Like many first-time business owners, he thought he knew everything he needed to know about running the business. After some hard lessons, he realized the company was making no money and needed to make a change. After engaging with Arkona’s fractional CFO services, he has clarity on how to organize his cash so he can see where his company has been, where it’s going, and how close he is to the ultimate goal. In this episode, he talks about his 10-year process of starting confused, stressed, and unhappy, to now–when he is having fun, creating wealth, and going on 200-mile runs.   How Steve realized what he wanted from the business long-term. How Steve realized he needed financial help. Why financials can be intimidating and how to overcome that perspective. Why establishing your cash position can help you understand the future value of your business. Why Steve now builds and organizes his business functions based on one goal–wanting to be happy. Why hiring the right people makes less work for the business owner and how Steve realized that when hiring his new president.   CEO of the Wedding Shoppe & Kennedy Blue, Jimmy Fritz // 56:15 Jimmy is a second-generation owner of his family’s retail wedding shop. Once he graduated college, he was brought on to the business with a unique fascination toward digital marketing, e-commerce, and analytics. Since joining, Jimmy helped start and scale the e-commerce company, Kennedy Blue, into a multi-million dollar business alongside the retail business.  Jimmy is now the CEO of the Wedding Shoppe and Kennedy Blue. In this episode, Jimmy talks about going to conferences and CEO peer group meetings where he would listen to stressed-out owners discuss their business problems and how he felt the same way. He explains that many owners–himself included–are really stressed because they don’t know their numbers and the impact of their decisions on the business. He tells about how, after he became a client of Arkona’s fractional CFO services, his stress and anxiety dropped off because he now understands the numbers, the impact his decisions have on cash flow, and the long-term value of the company. He explains how all decisions that are made in his business now (expansion, discounts, new products) are based on what the financials are saying and whether the project will increase cash flow and the long-term value of the company.   How “shiny object” syndrome causes more stress and why understanding your financials can rid yourself of all that stress. How having a clear valuation target in the future can help guide all your decision making. Why you need a CFO who understands how to put together and quarterback financials rather than someone who just understands how to close the books. How an accountant and CFO are different and why they are both important–but what makes them incredibly different. Why Jimmy has made his fractional CFOs part of the team and how that is different from other consultants he has used in the past.. How a CFO helped Jimmy tie marketing back to the financials. What Jimmy wants out of his business.   // USE YOUR FINANCIALS TO CLARIFY A PATH TOWARDS A MORE VALUABLE BUSINESS: Intentional Growth Financial Assessment   Bio: Steve Schaffer was born into his family business. Like many second-generation family business owners, he grew up working in the company. In 2008, he bought the business from his dad and took over the long-term family company. Like many first-time business owners, he thought he knew everything he needed to know about running the business. Jimmy Fritz is a second-generation owner of his family’s wedding shop. Once he graduated college, he was brought on to the business with a unique fascination toward digital marketing and analytics. During this time, online ads were starting to come into effect and Google was starting to overtake past marketing material like the yellow pages.   Interview Quotes: 23:38 - “I was not intimidated or scared about business at all. Then I immediately fell on my face and lost $700,000 my first year owning the business.” - Steve Schaffer 23:53 - “I vowed to surround myself with very knowledgable, passionate people who knew more than I did. And my way of owning is to give them direction and then get out of their way.” - Steve Schaffer 26:24 - “What gets me out of bed in the morning is, how can we add the maximum amount of value to the most people on a day-to-day basis?” - Steve Schaffer 27:32 - “If I put my owner hat on really quick, I want to have options. And the more options I have long term, the better.” - Steve Schaffer 57:21- “When you’re in the ecommerce world and you start spending thousands of dollars on Facebook ads and Google ads, it’s so dynamic and it’s so fast-changing.” - Jimmy Fritz 57:30 - “Your culture’s gotta move and you’ve got to be able to adapt on a dime because if you are spending a thousand dollars on an ad and that ad’s not performing, you could blow through a lot of money quick.” - Jimmy Fritz 58:57 - “A lot of the decision making was based off of impulse–which I think a lot of entrepreneurs are good at and they’re willing to take risks–but it wasn’t very calculated.” - Jimmy Fritz 1:00:19  - “And the transition from the first generation (business owners) to the second generation, I think the challenges were very mathematical but also somewhat emotional.” - Jimmy Fritz 1:09:20 - “Having your numbers in a way that you can actually make decisions, versus what you have to send to the IRS at the end of the year, are two totally different things.” - Jimmy Fritz   Links and Resources: Jimmy Fritz: The Wedding Shoppe Kennedy Blue Steve Schaffer: Schaffer Manufacturing Steve Schaffer, LinkedIn   Arkona Website The 5 Intentional Growth™ Principles (5 Videos to Help Clarify Your Vision) Intentional Growth™ Financial Assessment Fractional CFO Services   You can also reach out to me via email at rtansom@arkona.io, or on my LinkedIn.