Thanksgiving Roundtable. End of Year Action and Predictions

 

Welcome to our Thanksgiving Special!

Today we are trying something a little different. We are bringing on five experts in their fields to discuss the state of business and what you should do to successfully wrap up your year.

Meet our Panel:

Bob Gross of Gross Automation - Founder/Visionary/Owner - Leading Gross Automation Into The Future. Named Wisconsin Governor's Export Achievement Award Recipient in 2020!

David Turner - Founder @ Turner Process Solutions | You've got Process Problems? We've got Process Solutions! | We help your business make more money by improving process efficiencies.

Sally Mildren - CEO of Boss Lady Consulting - Brand | Marketing | CX for SMB, nonprofits and healthcare. We help small and solo teams increase their impact, grow their revenue and better tell their story.

Ben Zang - Benefit Concierge for Transition Health Benefits. Speaker and small business employee benefits guy.

Paul Curtiss - Managing Director at EBIT Associates. EBIT Associates is a middle market investment bank specializing in merger and acquisition advisory, high-end business brokerage, financial restructuring, valuation and strategic consulting.

[00:00:13.780] – Alice

Hello. Welcome to Books in the Biz, a podcast that looks at both the financial and operational sides of success. Please welcome our hosts, Dan Paulson and Richard Beltré. Dan is the CEO of Envision Development International, and he works leaders to increase sales and profits through great cultures with solid operations. Rich is CEO of the Veltre Group and a financial strategist working with companies to manage their money more effectively. Now on to the Show.

 

[00:00:46.130] - Dan Paulson

Welcome to Books in the Biz, our Thanksgiving edition. Rich, welcome back. How are you doing? How are you?

 

[00:00:55.430] - Dan Paulson

You preparing the turkey yet?

 

[00:00:57.510] - Rich Veltre

Yeah, we're working on it, believe it or not. Did some stuffing work already. It's coming along.

 

[00:01:04.310] - Dan Paulson

Yeah. My wife was preparing the cranberry sauce. She makes it homemade, and the turkey is in the brine as of about an hour ago. So we are ready to rock and roll. Anyway, let's get back to the subject. I know we have a whole panel of people, herd, herd of people waiting behind the scenes here. We are going to do something a little bit different today. We are going to have a whole roundtable discussion. We are inviting in a group of experts. Some of them will be familiar if you've our past episodes. Some will be new, but I would like to first welcome in Paul Curtiss. Paul, welcome.

 

[00:01:37.690] - Paul Curtiss

Thank you.

 

[00:01:39.590] - Dan Paulson

David Turner, welcome.

 

[00:01:42.830] - David Turner

Hello, hello.

 

[00:01:46.160] - Dan Paulson

Let's see. Sally Mildren, welcome.

 

[00:01:49.480] - Sally Mildren

Well, good morning.

 

[00:01:51.890] - Dan Paulson

Ben Zang. Good morning, everybody. Big bad Ben is back. And Bob Gross. Thank you all for coming in. I am going to let each of you do a very brief announcement. We don't need to take 40 minutes explaining who you are, what you do. But if you can just say who you are, what you do in about two or three sentences, I'd love it. I'm going to start in my upper right corner with Paul Curtis. Paul.

 

[00:02:15.300] - Paul Curtiss

Hey, I'm Paul Curtiss with EBIT Associates, and I help business owners decide to exit.

 

[00:02:21.710] - Dan Paulson

Excellent. Thank you. David Turner.

 

[00:02:24.580] - David Turner

Founder of Turner Process Solutions. We do manufacturing, automation and process efficiency design.

 

[00:02:31.690] - Dan Paulson

Excellent. Sally Mildren.

 

[00:02:34.260] - Sally Mildren

Good morning. I'm the CEO of Boss-Lady Consulting, and we help nonprofits and small business create impactful marketing strategy.

 

[00:02:43.170] - Dan Paulson

Excellent. Definitely want to talk to you. Ben Zang, what do you got?

 

[00:02:47.500] - Ben Zang

I am a business health insurance broker. I help businesses figure out how to take care of their people.

 

[00:02:54.690] - Dan Paulson

Excellent. Bob Gross, welcome aboard. What do you do? You're muted. Unmute. Unmute. Bob's muted, so we'll just get started. Bob, are you there? Can you hear me? Blink your eyes twice if you're okay.

 

[00:03:26.060] - Ben Zang

Always one in the bunch.

 

[00:03:27.870] - Dan Paulson

He's trying to get his working, so we'll just get started here. But guys, thanks for coming on, especially Wednesday before Thanksgiving. We thought this might be fun and entertaining way to do a little roundtable and discuss business, but in a more entertaining way. I've got basically just a few questions to get started. And from there, feel free to talk amongst yourselves, ask each other questions. We have a wide range of experience here, from manufacturing to marketing, to health benefits, to buying and selling business, and of course, automation. So it's a pretty good cross-section of people. But first of all, and I'm not trying to put anyone on either side of the fence here, but let's talk a little politics. We had an election this year. One of the things that always boggles my mind is everyone puts life on hold for about 90 to 100 days before the election, and then they go ahead and do whatever they were going to do anyway afterwards. But whenever you talk to them, we're not going to make a move, not going to make a move. We're going to see who gets elected. I'm curious, what did you guys see this year?

 

[00:04:37.310] - Paul Curtiss

Yeah, I definitely saw that. There was a lot of people who were like, oh, I definitely want to think about exiting. It's been on the plan, but I got to hold off. Okay, and a lot of times I would give them the statement of, let me get this straight. This election is one of those where we either are going to get what we have for another four years or we're going to get what we had And they look at me and go, so you still want to wait?

 

[00:05:07.460] - Dan Paulson

Yeah. And they go, yeah.

 

[00:05:09.580] - Paul Curtiss

Okay. Okay. Okay.

 

[00:05:11.570] - David Turner

Okay. Yeah. Manufacturing is the exact same way. Everyone up Starting about September, it was, let's wait till the election. Then we'll go see where we are. Now it's like, oh, we're so close to the end of the year. Let's just wait till 2025.

 

[00:05:25.100] - Paul Curtiss

So this Q4 has been pretty rough for major capital spend.

 

[00:05:34.170] - Dan Paulson

Ben, have you seen any difference with health benefits? Have people been more anxious to get signed up, or have they also been in a holding pattern?

 

[00:05:43.120] - Ben Zang

I think there's a big holding pattern on to, hey, what are they going to do with the subsidies? What are they doing with health care? Is Obama going to get rid of the, or is Trump going to get rid of the individual policies? Is he going to strike down Obama Medicare, and none of that, it's too big to change right now. So they're not doing a ton of that stuff, at least until 2026, '27, '28. Good. And it'll be slow. Good.

 

[00:06:13.660] - Dan Paulson

Yeah. Sally, how about you? I mean, you're in the marketing space. Yeah. It seems like people either ever flow with marketing when it comes to election cycles.

 

[00:06:22.540] - Sally Mildren

Well, I think that services overall, we serve rural health and nonprofits. They hunker down in quarter four anyway because it's in a budget cycle. And so in health care, certainly we've seen shifts because people are not wanting to add external contracts now as well. That's part of the ongoing financial pressure in health care. But I also have heard from a lot of other marketing agencies that their quarter fours have been the lowest of the entire year. They've seen very little new traction happening, but it's pretty typical, I think this time of year anyway.

 

[00:07:02.800] - Dan Paulson

Yeah. To me, it seems like it's end of year is always a hit or miss type of thing. Sometimes I get a ton of people that want to sign up by the end of the year. Other times they want to wait till the first part of the year. Can't explain it. The election years are always weird. Rich, how about you? I mean, you're the financial guy. What changes on your end?

 

[00:07:21.760] - Rich Veltre

Yeah, there was an awful lot of, we call it hunkering down before the election. And the election, just to me anyway, the election is just a psychological reasoning why they don't want to do anything. It's just this is the excuse that we have, and everybody collectively says, oh, okay, but there's no change that's going to happen on November third or fifth or whatever it was the day after. That's going to affect all these people who said, we're going to wait. But the funny part is, I would say what I've seen now is that the buzz is different. Everybody suddenly said, well, let's talk. Nothing's going to happen to help fourth order. It is what it is. They already killed it and kept it still. But they're all talking about a very good 2025. They're all talking about now we can go ahead with everything. So I'm excited hoping for first quarter 25, but I don't necessarily think anything's going to happen in the next month. I think I might have a lot of phone calls, but get nothing out of it.

 

[00:08:29.490] - Paul Curtiss

It It's going to be interesting because I had that situation happen. One of the people that I've been working with all year in July said, Oh, you know what? I want to sign, and started down the process, started down the process, then just kept kicking it down again, and literally signed the week after the election. I'm like, really? Okay. To go to market next year. So we'll be on the market in January. But it was like, now I'm not scrambling. I'm not going to Let that happen. But it was one of those where it's like, okay, we are not going to make this a rush, because we should have started three months ago.

 

[00:09:11.370] - Dan Paulson

So I'm just curious, and this is a question for went on the call, what was the biggest fear that people had? Because, Paul, you couldn't have said it better. You're either going to get four years of what we have, or you're going to get four years of what we had. There really isn't. I don't think Trump's election is going to change all that much from what it was four years ago. Kamala pretty much said hers wasn't going to change at all from what it's been. So why were people so skittish about making decisions? What do you guys think? I think interest rates- Go ahead, Ben.

 

[00:09:47.790] - Ben Zang

I was going to say, I think interest rates were the biggest buzz I kept hearing.

 

[00:09:52.650] - David Turner

Mine was product demand. They weren't sure that people were going to continue to purchase. So they were hunkering down, moving out stock for the rest of the year. But I think a big part was just product demand was down. So all the process efficiency, process engineering we were doing was mainly around one day, two day, keeping the lights on, not major capital improvements because interest rates for capital, one, but two, demand. No one was investing in the manufacturing long term. It was short term gains get us running today, but we'll figure out next year, next year, because we've got a lot of major capital improvements planned, but no one's pulling the trigger on them, which is crazy because you already know the ROI, though, every day you If you don't pull the trigger on ROI, you lost it. Yeah. And like said, nothing's going to change. It's going to take a month or two before it really shifts gears.

 

[00:10:57.780] - Dan Paulson

That's the challenge, I think, of anything that at the moment is intangible. I run into that, too, where you can show somebody the difference if they just take action now. But because they can't see it, feel it, taste it, touch it immediately, they get stuck on, well, is that really going to happen? And I think that holds back on their decisions. I got to check in on Bob here. Bob looks a little cold. He's frozen. Can you hear us, Bob?

 

[00:11:28.130] - Bob Gross

I don't know. Can you hear me?

 

[00:11:29.510] - Dan Paulson

Yes, I can hear you. All right.

 

[00:11:33.880] - Bob Gross

Well, what I'm doing is I'm...

 

[00:11:37.720] - Dan Paulson

You got an echo. And there we went.

 

[00:11:40.730] - David Turner

We lost him. Easy come, easy go.

 

[00:11:42.720] - Dan Paulson

Easy come, easy go. So anyway, yeah, I think it's difficult for people to understand that, because that's really a lot of what I've been running into, as you point out. Interest rates are high. People are cautious about making any major investments And instead of seeing the ROI on what they could be getting, they're stuck with the mindset that everything's going to stay the same, even if I do something, therefore it's an expense, not an investment.

 

[00:12:10.890] - Sally Mildren

I think there was a study released two days ago by University of Michigan that talked about consumer index and sentiment following the election, that there is a slight uptick. Obviously, higher among Republicans, a bigger drop among Democrats, slight drop among independents. But I think the thing overall for any industry is that consumers are exhausted. They're exhausted. And the research is showing that everywhere. And so going into this holiday season, it's ironic for me because Black Friday was originated as a, oh, my gosh, we're so behind on books now. We want to get a big surge of quick money at the end of the year. That's where where the whole concept came from was to try to get them into the black as a business. And now for so many businesses, they hang everything on Black Friday, on Cyber Monday, on Giving Tuesday, if you're a nonprofit. And I think the concept of waiting for the one thing or the silver bullet, or this specific tactic, or that shift is a trap that a lot of smaller businesses, for sure. Small, medium businesses fall into just getting in line and doing what everybody else is doing rather than capturing the opportunity to stand out.

 

[00:13:41.990] - Sally Mildren

And so for us in the consumer space, That's the thing we're seeing with a lot of clients, is they just want to get in line and do what everyone else is doing. And that's the Black Friday. That's the Black Friday, that's the Cyber Monday. That's the Giving Tuesday, laying all our eggs on that basket. I think it's a risky proposition.

 

[00:14:02.480] - Dan Paulson

Well, that's a good lead in. So now that the election is over, what should people be doing? Sally, I'll let you take it first.

 

[00:14:08.330] - Sally Mildren

Well, I think that from a marketing standpoint, they need to be evaluating what worked and didn't work. I've seen way too many businesses that will hire a consultant or not have staff doing it, and they either don't understand what's working or not working, or they don't have clear goals for what they're investing in. So they'll just farm out to somebody to do something, the things in marketing, and there isn't clarity around what's working. Our principle core hypothesis is that you need to get smaller and simpler to be better, not do more with less, but do better with less in order to truly stand out in the market. And so for me, I feel like people need to evaluate. If you're spending money to put posts on TikTok, is that driving to business at all? Who cares if one went viral and you got 2 million views on a video that meant nothing and drove zero business. That isn't the goal. But the goal is, is what you're doing working? And should you continue to invest in that next year?

 

[00:15:25.350] - Dan Paulson

Great advice. Bob, you're back. You're moving.

 

[00:15:28.720] - Bob Gross

I'm moving. Can Can you hear me?

 

[00:15:30.650] - Dan Paulson

I can hear you.

 

[00:15:32.000] - Bob Gross

All right. The microphone failed and now it's back. I live and work in technology, but I'll be darn. I need to find the youngest person in the room to help me.

 

[00:15:45.220] - Paul Curtiss

That's totally how it goes.

 

[00:15:48.090] - Dan Paulson

I'm sorry. I'm sorry.

 

[00:15:49.330] - Bob Gross

No, no, that's all right. I apologize, Dan.

 

[00:15:51.590] - Dan Paulson

You actually jumped in at a perfect time. So you're in manufacturing. We're just starting to talk about, well, what are you doing between now and the end of the year, now that the election is over? How has it impacted your business? I mean, you've been involved in a number of things in Wisconsin, I know. But what's it done for you as far as manufacturing goes?

 

[00:16:13.380] - Bob Gross

Well, I'm scratching my head a little bit because a good part of my business involves export, and a lot of my customers deal with export. And so it wasn't working before. I'm not sure what's going to happen in the future. I thought it was real interesting that we immediately went after Canada and Mexico, which is our two biggest trading partners. But then Canada and Mexico came back and said, okay, you're a little bit right, and maybe we should help you with the border. I don't know how to plan for next year. This is going to be interesting. But between now and the end of the year, which is when we're supposed to write the plans, I guess I just go ahead as if life continues. I mean, life will continue. I just don't know to what extent trade or export will be involved. I love to hear other people's opinions on that, too.

 

[00:17:14.630] - Dan Paulson

Anyone feel free to jump in?

 

[00:17:16.250] - David Turner

I'm excited. I'm excited for it. I think it's going to bring more manufacturing back to the States just because we can be cost competitive again with the higher tariffs, and We're not subsidizing our own production through government contracts, but I'm excited for it. The downside is, it's well, it's going to bring a lot of job opportunities. There's not going to be a lot of people to fill those jobs.

 

[00:17:47.820] - Dan Paulson

As he points to his robot sitting in the background.

 

[00:17:55.050] - David Turner

So, I mean, No, I think it's going to be a lot of opportunities to grow. I just think that everyone's going to hit the trigger once, and then there's not going to be enough people to do the work for you, to even get to that spot to be successful. It's because everyone's holding off till 2025, Q1, Q2. The first person to the starting line gets the contracts and gets the contractors to build out their production lines. There won't be enough contractors to go around, I think. That's what I see. I think everyone's going to be super busy. And then we're going to hit 2021 again, where manufacturing and construction goes sky high, and it just stalls because there's not enough people to go around.

 

[00:18:50.840] - Bob Gross

Well, I have an interesting engineering solution to that being we're a team of engineers, and I recruited a gentleman out of each and I recruited a gentleman out of Mexico. And there's a number of, especially Canada and Mexico, under the USMCA, which Trump did do, we can move freely. Anybody in a STEM field can work in Canada, Mexico, the US, and can move freely across the borders. So it wasn't a real stretch to go down to Monterey and pick up a degreed engineer who everything papers are signed, everything's documented. There's no There's no bad anything here, but there's talent, and it is available. It's just not traditional talent. We didn't go down to Marquette or up to UW and grab an engineer because those are a little bit harder to find. But there are solutions to the labor problem if we're willing to address it. And yes, you're welcome for the soft serve to point at your robot.

 

[00:19:56.550] - Dan Paulson

I want to get a copy, making a robot.

 

[00:20:01.060] - David Turner

Got two arms, does a coffee machine thing.

 

[00:20:03.040] - Paul Curtiss

Would that be great? Yeah.

 

[00:20:04.830] - Dan Paulson

That would be wonderful. Paul, how about buying and selling businesses? Are you seeing with what they're talking about, is that going to be impacted all by the current changes that are happening?

 

[00:20:19.370] - Paul Curtiss

Well, one of the biggest worries is not so much next year, but I think we're going to see it start next year. There's going to be this for all of us on this panel. For decades, they've been talking about the greatest transfer of wealth is going to happen, generational change, right? And I The statistics are pretty high that second generation owners are not selling inside the family, and they're going to have to, or I should say, are not being transferred inside the family, so they have to go outside the family to sell publicly. And the worry is that there's going to be so many businesses going to market in the next five years to the next decade, and there won't be enough money out there or enough buyers out there to solve that supply and demand issue. And I think we could start to see some of that feel this year. There's a lot of people that have the money. There's a lot of home office and PE firms that have the cash that buy and roll up and do all the terms in my industry, on Bolt, on whatever you want to call it, where they have a business and they want to add to it, either a region or a workforce or a robot.

 

[00:21:49.040] - Paul Curtiss

Like, oh, that's a cool tech. That could help us. And they'll add into it. And I see I've been getting a lot of calls asking, What do you got coming on next year? What do you got coming on next year? I'm looking in this and I'm looking in that. So they want to buy because they're worried about that transfer happening and they want to use the money now so that they're making the money and add it in. And so I've been telling a number of people that if they're thinking about exiting, they should start thinking about it in the next... I've been saying this since the beginning of the year. It had nothing to do with it. In the next five years, like try and be on the front of that wave. So if you were thinking of retiring at, say, 70 and you're 60, you may want to move that up, right? And just get an understanding of what does that take? What does that mean? How much is that going to cost? Because there's interest right now. And I think that next year could be a good year for everybody. But if you're not ready to go to market next year, you're going to have to start.

 

[00:23:06.830] - Bob Gross

So Paul, can I ask a question?

 

[00:23:08.810] - Dan Paulson

Is that acceptable?

 

[00:23:09.630] - Bob Gross

So my son and I, my son is my next generation, second generation coming up. We went to a program, and I think it was Brian Bellevue, the Economist. And he basically, with my son sitting next to me, he said, sell your business to your kids in roughly 2028, and then buy it back from them in bankruptcy in 2032. He said, because we're going to have this big, big shift. Are you figuring into that, or what's your feeling on that?

 

[00:23:39.610] - Paul Curtiss

Well, it's interesting. I've been blessed enough to move up in some of the volume size that I was doing. And I'm in a middle, lower middle market. So 2 million to say 25 is really my sweet spot because I just settled in there because there's not a lot of people in that space. And those businesses, if you put those businesses in front of the right people, they sell really fast. And that whole idea that there is going to be that generational change, and that it's going to be... What I think is happening, and what he's saying, and what the industry is saying, is that a lot of first-generation business owners, and especially the second-generation business owners, are not teaching their kids how to run the business. They're teaching them how to operate and do the business but not run the business. There's a big difference between the do and the run, right? Are they working on the business or in the business? That whole cliché, right? I see Sally on her hand because it's so true, right? If I don't think that that will happen, where a business owner will sell to their family, and then it will collapse, if they have been involving the family in running the business.

 

[00:25:14.370] - Paul Curtiss

I have a classic client now who's, for the last two years has been wanting to retire and exit. She's ready. Her son comes up and says, Hey, I'd really like to take over. Cool. Go ahead. Let him I'm good. And she goes, okay. And she tries it. I call her a year later, how's it going? He's a little slow on picking it up. And I didn't have the heart to say... At the time, I wasn't thinking about it. I didn't think about, okay, what are you training him to do? And I found out this year that he's very good at doing the business, but he doesn't want to run the business. So it changed my perspective of how to encourage her to make that transfer happen. And it was one of those things that you make him a key employee. And if you want, leave a small ownership with it. And that will make financing a thousand times easier because they're like, oh, the old company is vested in the new company because the son has a 5 % share, 10 % share, and has been running the business with mom for the last decade.

 

[00:26:28.410] - Paul Curtiss

And so I think that's what's going to have to start to happen is that they're going to have to bring in an operating team to purchase and have the family members that have been doing the business stay in and stay on in some way, shape, or form. I don't know if that really answers the question. It's just that's how I think it's going to start to look. I think the landscape of how the transfer is going to happen, it's not going to be a clean cut anymore. There's going to be some family member left on for a five year exit or whatever it may be.

 

[00:27:01.700] - Ben Zang

I think the market is going to have to start getting more creative about how businesses are both run and exited and in that and taken care of. I think the more I play in my little sandbox of health insurance, employee benefits and things like that, companies are getting better at listening and getting creative to what's actually important to the people within the company. And whether that's the people within the company that you have to take care of or the people you're trying to sell to. I think relationships are going to be a far greater asset than I think people realize.

 

[00:27:43.490] - Rich Veltre

Yeah, I think the other thing is, I think it's not just the family side either. I think I was just involved in an acquisition where a company came in as private equity and bought an existing, really what I think is a really good company. But I was brought in as an interim to fill the hole till they got a permanent placement in the CFO suite. And when I walked in, it was always, here's your list of all the things you have to do in the first three months that you're here. And I'm going, but they never did any of that before. And there's no team here. And then so I start looking like the winer and the complainer, because I'm saying, guys, this isn't going to work. Just do it the way they did it before. Okay, but you have a whole reporting requirement to the bank that they didn't have before. So I think your comment about how things have to become a little bit more creative goes along with another piece of the comment that I would add that, don't expect to just fill the seats with more people. Be creative, as you guys said.

 

[00:28:51.230] - Rich Veltre

Be creative with automation, with software, with other ways that you can use the technology. It's there. The technology has has now been here for probably the last 20 years. It's been growing, especially on my side, on the accounting side. I feel like we're way ahead of other areas, right? Because we've been in the cloud a lot longer than other people because it gave us flexibility. So that has expanded. So the accounting side of it, the finance side of it, really has already been way outpacing what I've seen in the other areas. So I think I'm going to agree that got to be creative, got to get the acquisitions and the sales or the exits, really following a much more creative path. And then that should alleviate some of the old stigmas, right? My son is going to destroy the business if I give it to him. That thing has to... I think that's going to stop. I think it's going to become where the creative people are going to get to the head of the pack.

 

[00:29:54.590] - Paul Curtiss

Well, and I also think, too, Bob, is with that concept that the next generation will take it. And I think there's going to be a way to let that next generation build it bigger than what dad is doing in your situation. You've laid the groundwork, and then this happens all the time in businesses. The one who is running the business gets to a plateau where they feel comfortable with it, and they don't keep doing what they did 10 years ago. And so for the last 10 years, they're like, I'm good where I'm at. This is great. And then if they make that transfer, but they go, Hey, son, if you do this, or even if it's a mother-daughter situation, it doesn't matter, right? If you go, If we do this, and I help you with these ideas, and we get this thing doing this again, son could retire. And both of you could benefit from the second sale going public because Sun grew it back to what it was doing 10 years ago, and that middle plateau is gone. And everybody goes, Man, this thing is really stable. What are you guys doing different to grow?

 

[00:31:15.260] - Paul Curtiss

Oh, well, we decided to add this new thing on, but we decided to also do what we wanted to do five years ago. My son brought in the energy, and I'm sitting in the background just making sure that running the business is happening. And so I think that going to that whole rethinking how it's being done, I could see that happening, too. So what's your thoughts on all this, Bob? We spat out a whole bunch of stuff. What are you thinking?

 

[00:31:45.190] - Bob Gross

In that process, the problem is, and this goes back to what you had mentioned earlier, maybe not preparing to work in, but working on. And that's going to be a big in the next year as I look at that. So yeah, having him next to me when the guy said, and then you buy it back from him in bankruptcy in 2032. So I'm sitting there going, okay, I'm now this old. I'm going to be this old. Everything else. And my son's just sitting there going, ain't going to happen, dad. Ain't going to happen.

 

[00:32:20.100] - Paul Curtiss

Yeah, that's cool. At least he was saying that and not going, could that be me? What's your response? Sally, what do you got?

 

[00:32:31.410] - Dan Paulson

So I guess that's the reason why we need to engage Dan in further conversations.

 

[00:32:36.770] - Sally Mildren

There you go, Dan.

 

[00:32:38.000] - Bob Gross

Soft serve.

 

[00:32:39.060] - Dan Paulson

All right. Thank you. Hit it out of the park. Sally.

 

[00:32:42.830] - Sally Mildren

Well, we've had clients that brought us in the sons taking over a second generation of a 30, $50 million company, and there wasn't enough appetite of dad to let go. And so we did a whole rebrand. We positioned them in new markets. We did all the stuff, and it got completely shut down. And so I think that the other change that has to happen to Rich's point is there can't be more of a commitment to how it used to be than where we need to be in the future. And I think that's the trap is people think they can maintain what we have now and just grow, but that's a linear growth. You're not going to ever make that quantum growth or the vertical growth without changing something fundamentally, whether that's a new process or a new technology or a new market or maybe re-addressing how you do things all together. In this case, it was a huge service business, and the sons had amazing ideas, but the dad and the original owner ended up blocking it all of that work. So now the sons have left and started their own business because there was no flexibility.

 

[00:34:08.170] - Sally Mildren

And I feel like when we come in, get called in for marketing, we're taking a look at culture, maturity, readiness, the resources, plus the things that they say are their goals. If they want to go to $40 million and they've been at 10, something fundamental has to shift. It's not just throw massive amounts of marketing at it. And I think that's what you all are alluding to. But it's an interesting time because the next generations of leaders The millennial leaders, the little bit older millennial leaders are fundamentally very different, have a different frame of reference and different commitment than what we've been working with. And it's been curious and very interesting and expanding to help guide them in next stage growth. But I also would say I have observed that they are very open to consultants and to the likes of all of you to come in and help inform. They don't feel the need to be the expert on everything, but they will bring along experts that might help support that growth in the future. That's what we have noticed.

 

[00:35:30.100] - Paul Curtiss

Are you finding, too, that if you sometimes need to change key employees in roles that are there, that are probably been there with founder for 15 years or greater, that they're also holding it back, or are you not seeing that?

 

[00:35:48.200] - Sally Mildren

Yes, in many cases, that is true. I think there are those anchor people in almost every organization, whether you own the business or that are working in it, that's not the way we've done it. I've been dealing with someone like that with a new client, and that is one of the most challenging change management pieces to bring along that human to say, I understand that's not how we've always done it, but if we want to get here, that path doesn't connect. And it's rough. That's rough to manage. And sometimes they're more committed to not hurting feelings than to really doing the shifts that's needed. But that's where the full scope of operational, of process, of culture, and of marketing makes sense together. If you just add a bullet, let's do AI. That's going to save everything. That's not going to help if you don't have the operational rigor and commitment to doing it right.

 

[00:36:54.950] - Paul Curtiss

Well, I'm sure you see that, David, too, is somebody will be like, oh, I need this machine, but they don't have any plan or path to make your robot work. Do you see that?

 

[00:37:08.390] - David Turner

Absolutely. Yeah. Well, what Sally is saying is 100 % true. Actually, I just just posted on this yesterday. It's like, if you always do what you've always done, you always get what you always got. And that's critical with changing processes, changing management, whatever it is. It's And I had a boss years ago. We were big in the change management. And it was you change the people or you change the people. Very cut and dry. People have to change or you got to get rid of them because we can't keep going the same way. We've got to change directions to make that nonlinear growth. So I see it regularly where people are like, they don't have the infrastructure in place to automate, or the processes are so far broken that you've got to improve the process before you automate, because otherwise you're just making more garbage. You've spent more on your automation than you spent... And you're making more waste. So I see it both ways as well on that side. But Sally is 100 % right. You got to do something different, and you've got to make a nonlinear change to have nonlinear growth.

 

[00:38:33.440] - Paul Curtiss

And it's hard to bring that change. Like Sally was saying, too, right? And the idea of letting a key decision maker, we'll just word it that way, right? A key decision maker understand that they can let go of all five things they're holding on to and replace two of those with one person so that they can focus on maybe what they're good at, or if they figure out how to let go of the thing they don't like, that takes up now because their mental capacity to have to work on that is greater, it takes up 60 % of their time. Well, if you let somebody else I find it so interesting that I see business owners who will take really nice distributions at the end of the year to take care of the challenge when they could probably use that money to hire another person and make more money because they're not having to worry about the headache that they're dealing with. But they're really happy that they're getting a $300,000 distribution or whatever. You know what I mean? That's usually the number. It's right around there that people are like, Yeah, but if I...

 

[00:39:56.480] - Paul Curtiss

Okay. And if you let go of $100,000, You could make six. I don't understand.

 

[00:40:02.540] - Dan Paulson

Well, we all deal with the rational. Every single person here deals with the rational, and we also see it from a third party's perspective. I always try to put myself in that owner shoes. That owner All the time. Been in business for 10, 20, 30, 40 years or better. This is their baby. This is just like another child. This is something they've nurtured and grown, has provided them with a lifestyle. They want to continue that lifestyle going on. Things are happening right now that they don't understand. They have maybe a younger person, maybe it is a son, daughter, or a multiple family members that want to take it over. They see the next vision, but they're still holding the purse strings, and they're still going, I got to protect my baby, and I can't just end it with my kids, because to what you pointed out, Bob, actually, it's usually the third generation that pretty much puts it into bankruptcy, not Usually the second. Second one, typically, if they're allowed to, will continue to grow it. Then the third one increases their bank account and drives it into the ground. That's the way it's been in the past.

 

[00:41:10.330] - Dan Paulson

But we all have to get over that hurdle. And Sal, you're probably the best one for this because you deal with marketing, which is 90 % dealing with emotion anyway, is we got to get to the point where we get into that emotional hook and get them to understand what you're pointing up, Paul, which is there's more to be had here, but you got to let go of the change, give enough running room so you can get that benefit. And if you're going to hold that tight to what David said, you're going to get what you always got. So we've got to change something here to move them forward.

 

[00:41:45.900] - Bob Gross

So all I can say to answer that, Dan, is my precious.

 

[00:41:49.950] - Dan Paulson

You got to say it a little bit more of a Golem way.

 

[00:41:55.800] - Paul Curtiss

I think you got to look at the fact that if you're looking at growth, growth needs structure, right?

 

[00:42:04.840] - Ben Zang

And I think that's, I think, the biggest challenge for a business owner, when they get that my precious attitude. And maybe it's that You look at it and say, look, your precious could use a couple more bricks on the path. Let's build this out a little so it can hold what your precious was built to hold. I see that all the time in what we do, in the fact that you look at benefits. Oh, I have to have benefits because my people won't come. Well, you need people. You need people to grow. You're telling me you can't get in quality people, and if you had the right people, it would grow. So let's not balk at putting the structure in that allows your business to grow. The mindsets have to change.

 

[00:42:52.780] - Paul Curtiss

Yeah. And Ben, I was just going to say that the interesting thing, too, is Sally made the that the younger generation coming in, younger than us.

 

[00:43:06.200] - Bob Gross

I like how you did that.

 

[00:43:09.780] - Paul Curtiss

Coming in want to be their motivated in a different way, right? And a lot of them would not be opposed to a base plus incentive-driven path. So our generation was like, I want that big paycheck, right? I need to get over that six-figure number because I've made it then. I mean, that was a lot of us of where our mindsets were and our generation is. But they're like, Oh, you mean I could make Three times my base if I do this and my base is only $60,000? Oh, well. I mean, that covers all the things I like to do, and I can still go out on Friday. But every quarter, I might get a big check. So there's a There's a lot of ways that that can be brought into the whole process, too. When you bring somebody on, it doesn't have to be the normal... Yeah, I'll just go down that path. The normal way of hiring. It doesn't have to be that way anymore. You can incentivize. I have a transaction coming together that they were trying to figure out who was going to operate. It was an out-of-state buying an in-state, and there was a license that they needed to have somebody in-state.

 

[00:44:25.920] - Paul Curtiss

And I'm like, Hold on, let me make a couple of calls. I call a guy who's going to become their operator, and they incentivized him to come in in that way. They're like, How about when you come in? Like, he's coming in as an operator at the purchase and is going to be on the contract for a partial ownership, and it's going to be a minute ownership. It's going to start out with like 2 to 5 %. And the only way for that ownership to stay is for him to stay in, right? Of course. But he has this drive of an earn out to own and be first on the docket to buy in five years, and he's going to be getting a bonus of cash earnings. So I was like, wow, okay, that's a cool way to do it. And that was the other person's idea? I was like, great.

 

[00:45:17.480] - Dan Paulson

Perfect. We're getting on the hour here, so I want to take some time to wrap up. This conversation has been really good. I think I got to bring you guys back on at a later date. But as we wrap up, we're going into the end of the year. There's still a few weeks left, though it's probably not going to be as busy with clients, or it's going to be super busy with clients. It seems like there's no in between. What do each of you recommend people I'll do. Bob, I'm going to start with you first. I'm going to work my way backwards this time.

 

[00:45:49.460] - Bob Gross

Try somebody else for just a second.

 

[00:45:51.810] - Dan Paulson

All right. I'll try somebody else first. I'll go to Ben. Ben, how about you?

 

[00:45:56.120] - Ben Zang

I think the biggest thing I could say to to business owners is, bring in consultants that give you different ideas. I think the way that you've always done things, isn't always the way it's going to go. There are trends in the marketplace, like in my world, and it is a huge thing, and we are finding success in strange places. We did a manufacturing company over 200 lives. They saved $400,000. They're getting bigger bonuses this year for their employees just by bringing in somebody new, and taking a look at a new idea. So there are new ideas out there all over.

 

[00:46:40.140] - Dan Paulson

Call somebody. Great. Sally, how about you?

 

[00:46:44.240] - Sally Mildren

I think by and large, for marketing, companies need to simplify. They've created a monster of duct tape and tinfoil systems and software and processes that just are not efficient. Most of them are wasting a lot of money because they don't have clarity on what their end goal is first, and then working backwards from that for marketing. You can waste a lot of money. And marketing doesn't work is a symptom that I'm talking about you.

 

[00:47:16.210] - Dan Paulson

All right. Paul, how about you?

 

[00:47:23.390] - Paul Curtiss

Well, I think a lot of business owners need to figure out what they have and where they are. A lot of times they're so busy on working, again, in the business that they don't step back and figure out where they are. They need to understand from a numeric standpoint, maybe an accounting standpoint, maybe a valuation standpoint to go, what am I worth now? Where do I want to be? What is the number in my head? And what do I have to do to get to that number? It doesn't matter if you want to sell now Getting a valuation randomly in the middle of your fifth year, and you know you want to be at 10 years, where am I at now? And what do I need to do to get to the number I'm at in five years Because I don't plan on exiting right now, and maybe I want to buy a business in five years to help me grow. It's not always about the exit, it's sometimes about the growth, right? And so that would be the thing that I would have them try to take a look at. Look at their balance sheet, look at their income statement, try and get a QE, quality of earnings.

 

[00:48:36.250] - Paul Curtiss

And when you look at your balance sheet and your income statement, you get a quality of earnings and you put all that together and you go, oh, hey, that's where I am. And you see these glaring numbers, they usually pop out that go, Man, that is really low, or, Holy cow, we're spending that much on that? Like, what are we doing? And then you can bring in the consultants, you can bring in the marketing experts and go, Okay, here is what we can do. Maybe it's the automation, maybe it's the tools, maybe it's what is it that can take us to that next level, and where can we reallocate the already funds we have to make it grow better? That's what I can say.

 

[00:49:13.410] - Dan Paulson

Exactly. Rich, What's your prognostications for the last six weeks of beer?

 

[00:49:21.190] - Rich Veltre

I think the biggest thing that I would tell people is, as we've been talking about this whole hour, I think one of the themes that I'm still getting And through my head is the fact that a lot of these business owners have always been reactive, and it's time for them to start looking and how to be proactive. So if you've never done a plan before, if you've never actually looked at how do I want to do in 2025, do one. And it doesn't have to be ridiculous. Don't hire somebody and go crazy and try to come up with a plan because your first plan is going to be garbage. The first time you do it, you don't have enough info And they're sold by weight, not volume. So do something to look at how you want to do in 25. And I think I was thinking about it as everybody was talking. I said, maybe everybody should write down, here's what my plan is for 2025. And then fold it up and put it in your pocket or put it somewhere where you can look at it in 2025. Just because it's an exercise to get people to realize that had I done this, this is where I wanted to go.

 

[00:50:27.500] - Rich Veltre

Here's where I wound up. And boy, was I wrong? I was off a bit, but now I was at least proactive. I put a plan together. Here's what I want to get to. And I came up short, but let me start to think about why. That's true planning. That's the true switch from the reactive to the proactive. So that would be my goal is to tell people over the next month, think about where you want to be in 2025, and then find a way in 2025 to actually look at yourself against it.

 

[00:50:57.760] - Dan Paulson

Excellent advice. Good plan should be no more than three to five pages with a one-page, we'll call it dashboard, that you can follow along and make sure it's working properly. David Turner. I know you've been having some Internet trouble, so I'm going to sneak in here while you still got a chance. What would you recommend people look at in the last six weeks of the year to get prepared for 2025?

 

[00:51:18.780] - David Turner

I think piggyback on what Rich said, we got to make that plan for 2025. I mean, right now, on the service industry side of it, we We've got to make it to 2025 so that we can be prepared and ready to jump when everyone starts cutting us checks. So that's really what we're doing is we're hunkering down. We're shrinking a little bit to survive the Q4 2024 because everyone else has stopped. And once we can just be ready for Q1 2025 when everyone hits go button and see where we land. But I really feel like 2025 is going to be, we're going to run like gangbusters from start to finish.

 

[00:52:08.080] - Dan Paulson

Great. Excellent. Bob, I waited till last for you.

 

[00:52:12.140] - Bob Gross

Okay. I had a whole bunch of things that started happening on the overhead that would have drowned me out. We did a SWOT this fall, an SWOTT, on the company. And out of that, we developed five major initiatives or goals that we want to pursue next year in 2025. And that is as a company. And then each department right now is working on their three to five goals that they're going to accomplish. And so in the next, you said six weeks, Dan. I thought it was less than four.

 

[00:52:50.260] - Dan Paulson

Well, technically it is because Thanksgiving is late this year, so it is probably closer to four.

 

[00:52:54.870] - Bob Gross

And then take some holidays out of there because it's a Wednesday. We don't have a lot of time left. But in that little time that's left, I really want to, with each of my top managers, get those three to five goals. What are they going to do in their department? And hopefully they're going to the next tier under them so that when we enter the new year, everybody has at least, and you never want more, I think, than three to five. You're more up on that. But three to five concrete things that will move forward based on the slot that we did earlier. And so that's going to be our focus here for the next couple of weeks. From an economy standpoint, it's going to be what it's going to be. I agree with David. I have no idea what the month is going to be, but next year. Now, are we just all optimists because we're business owners?

 

[00:53:51.070] - Dan Paulson

That we. I thought most business owners were pessimists.

 

[00:53:54.910] - Bob Gross

It's always going to get better. But yeah, that's where I would I would go with the, get those goals and get those in place and get them written as smart. Well, that's the other thing, that make sure that they're very smart. Yes.

 

[00:54:10.200] - Dan Paulson

Very good. All right. I'm going to let you guys go because it is a holiday, it's Travel Day. I know Paul's got to get on the road here pretty soon. So first of all, thank you all for participating. And again, we got to do this again. This was a fun conversation. I think it was very enlightening. It's always good to get different perspectives. As far as getting a hold of us, we can help with a lot of these issues that they were talking about. Rich and I can. We have started XCXO, which is actually fractional leadership for companies that are trying to fill these gaps. You can reach us at XCXO.net. Rich, what's your email address?

 

[00:54:48.540] - Rich Veltre

It's rich@xcxo.net.

 

[00:54:50.950] - Dan Paulson

And mine is dan@xcxo.net. Guys, thank you. Have a very good Thanksgiving. Travel safe, and we will see you in the new year.

 

[00:54:59.370] - Sally Mildren

Thank you.

 

[00:55:00.280] - Paul Curtiss

Thanks a lot. Thanks, guys.

 

[00:55:01.400] - Sally Mildren

Thanks.