Journey to an ESOP & Beyond

On this episode Shawn Busse (CEO) of Kinesis out of Portland, OR get the opportunity to talk about the valuation from the perspective of ways to improve.  We tap into Kinesis’ visionary and unique approach to “branding” that incorporates the proper alignment of customers and employees.  It is a powerful concept that takes guts for a company to embrace that kind of change but in the end - a business will improve in ways that ultimately provide a stronger valuation for the ESOP!

This episode will launch a series of ESOP feasibility episodes that bring up some relevant issues related to planning your ESOP.   Are you considering a partial or 100 percent ESOP?  What will work best for your goals and objectives?  We are going to dig into cash flow and the connecting points to modeling a sustainable leveraged ESOP transaction.  Assessing entity structure in relationship to the ESOP transaction subject to appropriate limitations.  Evaluate the forecast in relationship to multiple areas to qualify the integrity of future cash flows and the company’s ability to repay the debt.  These are critical steps in the ESOP planning process. Look for the next episode coming soon in this Mission Impossible series in ESOP feasibility.

This episode began from the meeting we had in Portland OR this year when I got to meet with some folks thinking about going towards an ESOP.  Former senior editor of Forbes - he created the Small Giants Franchise…he now has his own podcast called 21 Hats.  Loren is a wealth of information - all of this leads to an interesting dialogue on ESOPS.

On your journey to an esop - who are the ESOP advisors?  Catch me if you can is an excellent movie about a high school con man that intuits at an early age the art of providing just enough true information to become believable - this is a true story.  Why is he successful?  This episode has philosophy and psychology even though not my specialty…I am just an ESOP guy.  However - all of it makes me think of how important it is to align yourself with the rights advisors including sell-side, trustee, attorney, and valuation firms.

This episode leverages the knowledge of an experienced ESOP insurance agent to help folks better understand the requirements for Fiduciary, D&O, EPL Insurance…Patrick is has an excellent way of keeping this part of the ESOP requirements straightforward so that they are easy to understand and plan for on your journey to an ESOP.

In this episode, we deal with a good overview of how important it is to keep our key people if we want to grow and strengthen the value of the business.  Poor Edmund Dante’s - betrayed and put in the dungeon - retained against his will and that would inspire a whole novel/movie around vengeance.  We want our retention strategies to leverage positive tools like the ESOP and SAR plans to compel the best folks you have to stay for the long-term - and better yet continue the great culture you have built in your company for the legacy of your business.

 This episode focuses on the journey to an ESOP for Progressive Flooring and Services, Inc. out of Ohio.  We worked with the company for the last few years prior to and after COVID.  The company persevered under great leadership and a vision for the future to pull off a very successful ESOP transaction.  The episode will help others that are considering an ESOP with the experience Nino and his team went through…I find that these types of episodes are very helpful for companies to expose them to issues that either they are dealing with or haven’t yet  experienced.

In this episode - we explore a very often asked question as to what age should I be to start my ESOP.  One of my favorite aspects of ESOP transactions is that it can be very flexible to structure and it is not always a used as just an exit plan.  This podcast focuses on answering questions around the age of shareholders and when would be the best time for them to start the ESOP process - because you know “no one is getting any younger!”

Jim Bonham - President of “The ESOP Association” was kind enough to share with us a solid overview of the a dynamic and powerful resource for the ESOP industry.  They have a strong role to play into the ESOP political landscape being credited with ongoing legislative efforts to stay in front of congress and help advance positive ESOP legislation.  Mr. Bonham provides updates related to Secure 2.0 for the parts to affect ESOPs.  This episode will be very helpful to better understand The ESOP Association as a resource.

This episode is a continuation of our tribute to the 70’s with this classic and memorable song that captures everything we want to say in two simple words: FREAK OUT…. I was inspired for this episode in having multiple experiences with clients throughout the last several years from mild anxiety to a little more than anxious when it came to certain parts of the process.  Keeping in mind that this is for many the only time they have ever sold their business - it can be a trying time to say the least.  The ESOP sell-side advisor needs to plan and prepare with the client to try and eliminate as many potential surprises as possible.  But there are other reasons for freak out and this episode does its best to nail down those to prepare for what may come throughout your journey to an ESOP.