Navigating the Terrain Of Business Transitions with Elizabeth Ledoux

Are you thinking about how to grow your business with near and offshore staffing? But you're also wanting to make sure that it's reliable, cost effective and really well done. I think docsa talent is the way to go. Here's why. They don't just fill your jobs. They bring integrity, top talent and a people first approach that's hard to find. I've known the people at Doxa talent for over 20 years now and I say that you can count on them. I have talent. Talk to Doxatant and you won't be disappointed. Go to doxatant.com Bill G Again, that's doxatant.com BillG One more time. Doxatalent.com Bill G Check it out today. Start with the end in mind. What is the exit plan? How are you going to get out of this thing? That's the question I see most entrepreneurs put off way, way too long till it's way too late and they don't have a lot of ch and it's a lot harder. I've seen companies do it well and owners and companies thrive, a legacy preserved, wealth captured, ensuring their financial security. I've also seen people torpedo their companies crash and burn, family upsets and shareholder disagreements, the run the gamut, seen people wait too long till they were old and sick. How do you get it right? That is the topic of our show today. Hey everybody, my name is Bill Gallagher. This is Scaling Up Business Podcast. I'm the scaling coach and host of the show. Show comes here every week with somebody new talking about something you need to get right in scaling your business. Getting the people right, the strategy, the execution, the cash, managing, surviving, maybe even enjoying the journey of growing your business over time. That's my focus. Anyway, you'll find our shows, our workshops and more@scalingcoach.com and scalingcoach.com is also where we have our workshops, our free course, all kinds of things like that. So that's the website and you know now 500 many shows of back catalog. So lots of things on every topic that you could go listen to. These shows are not the kind of thing that are, you know, old too fast. These are enduring topics. All right, enough about that and about us. Let me bring on our guest who's already with me on camera. Elizabeth Ledoux is founder and CEO of this company, transition strategist and Tiger 21. She's helped many companies navigate the whole process of transitioning over 30 years and she's been around business as founder and around, well, all kinds of things business. She'll say more about it. Welcome to the show, Elizabeth.

Thank you. Thanks. It's great to be here.

A show of her own. Yeah.

Oh, yeah, that's right. Yeah. All about transitioning businesses is my show.

Yeah. So if you dig it, you'll. We'll throw that link up there as well and at the end and so you can go back and hear more. So Elizabeth joins us from Fort Collins, Colorado, is it?

That is correct. Yeah. Fort Collins, Colorado. Beautiful day here today.

And yeah, it's a beautiful day here outside of San Francisco, where I am also.

Nice, nice.

Well, let's talk about keeping the world beautiful and trying to keep your business alive and make the transition, not have it crater. I was talking with an owner just yesterday about potentially closing their business because they couldn't envision an appropriate transition. And you know, that can be kind of heartbreaking. So how do you come, like, how do you get your start in business? How do you get interested in this world of transition?

How did I do that? Well, why don't I tell you a little bit about my background and a little bit about myself just to get started. Started, if that's okay. I've been doing this work for over 30 years. Crazy story. I grew up in Colorado and I decided that I wanted to be at a school, a university that was the closest school to skiing. So I decided to go to Colorado School of Mines, which is one of the hardest schools in the world with regard to petroleum engineering. And that's my degree. So at the time I was one of the few women and it's at the time was in the top six in the world for petroleum engineering. So I graduated from there, went to drill some oil wells for a while and then I became a mom. And when I became a mom, I did not want to be on the rigs offshore month on, month off. And being an entrepreneur, decided that I was just going to start my own business. And so I went into consulting and have been in it ever since. I just love helping people and owners, private owners, to figure out where they want to go and what they want to do in their life and how to keep the communities healthy as they transition through their business and out and transition others in. So that's kind of my short story.

I focus on this part of the business, on transition as a thing, succession, legacy, that world because.

Well, a couple reasons, Strategic planning. I did a lot of that in my history going and working with business owners. And you know, strategic planning is short, tall, kind of it's, you know, the next year, the next two years, the next three years. What I found is that the transitions are much more complicated. They're much harder to do because they have a lot more emotion in them. They have a lot of new behavior. They've got. The person who's transitioning has to create new practices and new behavior, and a person who's the successor coming in has a lot of work to do, and a lot of it's a huge learning curve. So I found it to be more inspiring. I also, back when I started doing this work, I. I started into transition planning, into exit planning. They used to call it that in the, you know, earlier 2000s, exit planning, and found that people were really not interested in planning their exit. That was not fun. An exit is an ending. It's an event, it's a stop where you're done, you're exited, you're out. And so I found that what people really enjoy doing is planning transitions. And in the work that was being done then, people weren't putting people first. What they were doing is they were figuring out the how and the how much. So go to the CPA or go to the lawyer, which state planning lawyer, whatever. And you do need to do that, but foundationally, why not understand what you truly want so that you can create it in the future? And transitions can have a very long Runway. Like, you can do it in a year, but the ones that are five years or 10 years or longer, you have more choices, and it's a lot more fun to do it, if you're thinking about that. So that's how I started.

Yeah. You know, it's interesting. The companies that we see a lot, and probably a fair amount of our audience aren't thinking about this first and foremost. They're thinking about, how do I get to 100 million, how do I get to a billion, a half a billion, how do I get my company to. And whether that's revenue or value, they're thinking about that first. And only maybe 10% are thinking about, I want $100 million exit. Right. Like, there's a lot fewer thinking about it in that way, about life after and what the company looks like after them or that kind of thing. It's just about a particular financial goal, which is fine. And then a few of them are thinking about impact in the world. Like, we want this company to do this thing for this many people or whatever. And that one's a little bit easier to translate to the transition that you're speaking to, because it's more about impact and Less about the money, but in either case, you can get to that. But a lot of times people are just like, I don't know, Bill, I'm 40. I'm not thinking about that yet.

Yeah, absolutely. Absolutely. No, I'm like, you really want to.

Run this till you're 70 and then you're forced into a corner?

Well, and not even that. I mean, do you really want to run it until you're 45 or 50? And, you know, we think that we're going to live forever, and we think that we're going to be healthy forever, and we think that, you know, everything's going to continue on. And, you know, one of the big dilemmas. There's so many dilemmas that happen in a transition, and one of them is lack of purpose, lack of fulfillment. You know, you're not ready to go, that kind of thing. And. But also, yeah. If you happen to be incapacitated or not be able to run the business for whatever reason at an earlier stage, what you leave behind is sometimes just a disaster. It's just a mess because nobody knows what to do. And you've got all the knowledge. Private business, small business, small to medium size. The owner typically drives so much of it, and they've got so much knowledge that they really don't understand truly what a big deal they are in the company. Yeah. And what, what influence they have. Yeah, yeah.

It's interesting, you even long before any of that, you start to realize, oh, wait a minute, I never can leave this business. Especially in North America, people are so tied to their jobs and then. And they're extra tied to their businesses and that job. And so if you're a business owner, it's even harder to get away than if you're an employee. And so you find people who can't leave for a week without being on the phone and zooming into a meeting or this or that, who are answering emails while the family's at the beach.

Yeah, yeah. And that's part of. I've met many, many owners who, who. They gain most of their fulfillment by being engaged and being the one to do that. And it's actually a habit, you know, it's a habit just like our phone, when it beeps, we're like, oh, what's going on? I got to check in. Yeah. And, yeah, you can't even really have a dinner without that. So part of that is just the training over the years and years and years. And I said earlier that there's behavior change that happens in a transition and in a Succession and those are two different things. Right. You can't, you can't have a business transition or an exit if the business is going to continue without having somebody else who comes in and takes it over. So one way or another, this is not, this is a team sport. This is not an individual sport. And I think when you're an entrepreneur, building, growing, developing and doing that, that's even though you have a team around you that is more of an individual sport, you're making the choices, you've got autonomy, you're doing things the way that you see them in your vision and all of that. And so, yeah, this is a big different thing to go through.

Well, so let's share some stories. I always like to focus on the client stories. I think they are far more engaging than the simple principles. Maybe start with your Canadian business owners. You shared some as we were preparing with family concerns and yeah, and I.

Tried to, you know, I try to think of different stories that might be meaningful for people. And this one was, this one was pretty typical. It was, it's two related people, brother, brother in law. And they were trying to figure out years ahead what to do with the business and some of the things that they had just to set up the story a little bit. So they're related. 50, 50 owners in this business, good size manufacturing company, They've got three kids working in the business. So two from one side of the family and one from the other side of the family. And one of them had, the one that had two kids in the business, the kids were older. So you have a difference in age of children too. So we've got similar age of partners, different age of children. And the one, the one who had the older children was in a place where he needed to start to think about engaging them and putting them into the business and how they would gain ownership and you know, because they were of the right age to do that. And when I say of the right age, we're talking like late 30s, early 40s. I'm not talking 20 year olds, right, that are out of college and ready to go. We're talking about people that are ready to start building their own wealth, ready to start owning at that age. And so he was in that place and the other owner wasn't. So what happened is by working with us, we were able to navigate the two of them together because one had a need and a desire now and one did not have that. So how do you bring those two people together? We did that in a strategy. We ended up that strategy. Ended up being a 10 year strategy. Included conversations about equality, fairness. One family had two children, the other family had four children. How does all of that flow in a 50, 50 relationship? Because they're cousins and you know, should they be equal or should they not be equal? And just how does that wealth pass? So we walked all the way through, helped them to figure out what they truly wanted and then introduced it to their kids. Ended up going through, truthfully about eight years of work with them and they successfully were able to bring their children together. They successfully were able to build a new board of directors where the, where the transitioning generation could learn to give up the reins and give up the decision making power while also training and teaching at that board level. The kids coming in and when we started, there was a high likelihood in the owner's minds, the current owner's minds, that the next generation would not be able to work together, that that was not going to be possible because of family history and because of the way that the family saw each other. And so that all we wandered through that and got that fixed. So yeah, so the next generation's working together. The generation transitioning is working very little at this point and things are moving forward. And the cool thing to see truthfully is that the newer generation, that young generation that's coming in, they do have ownership now and they're taking the business to a whole different level collectively together. Which is exciting because this is a. It started. This generation that's engaging right now would be the third generation that started with their grandparents. So it's kind of fun to see that. And I'm painting a picture of hopefully some challenges that they were facing. And then with the right work and the right conversation and the right communication, I've seen so many things that people navigate that they never thought they could.

You know, it's interesting about that is I think this is. There's a complication, a classic one that I hear there that I see again and again and that's people have collapsed and all entangled ownership as well as role or management. Like so there's a job that you might have in leading the company and there's comp and things that go along with that and authority and then there's ownership which has voting rights and that kind of thing and comp associated with it. But in many companies and families, especially family business, all that's all mixed up. And you've got people making all kinds of money who don't actually do anything for the company.

And then.

And the pay is set as like a salary instead of some profit share. And then the company goes up or down and the company's in trouble because the family's all gotten used to this salary that really is. Should be profit distribution.

Yeah, yeah, yeah. Well, and that I, I hope it's okay if I, I have so many stories I would love to just tell you. Yeah, Totally different family. You know, it's funny, one of our, one of the number one complaints that we hear from people who are transitioning. It's not the transitioners that are worried as much or are anxious as much as it is the successors. The successors are just patiently waiting. And it can be a successor whether you're a non family member or a child. Right. It could be just a regular employee who's been promised to have ownership someday. And you've got two different mindsets going on. Like what is someday and how much is it? Right? What is someday and, and is it 2% or is it 49%? Right. And are you gifting it to me or do I have to buy it? And how does this all work? So, yeah, different family. It was great because we, we actually got hired because the successors decided that they were totally fed up with their father. Five boys. It was five boys, three in the business, one in a different business, and one not even associated with any of the family businesses. And what the dad had done, out of the goodness of his heart, he had provided the opportunity for the kids to work in the family business. And in doing so, from a younger age, he had created equality and fairness. They didn't matter what job they did, they all got paid the same. And the pay was low. Right. Because when an owner builds the company up, usually they're used to taking a lower salary one because of tax purposes. Right? Because it's a little bit better to take distributions than a salary. And then from a tax perspective, and then the other one, they're just used to reinvesting. Let's reinvest, Reinvest, reinvest. I'll be okay. We can live off of this, right? Kids grow up and then all of a sudden this business is taking care of not just one family, but five or six in this case. And so all of them are being paid the same. Being, say, provided a car, provided a phone, all of these different things. And there is no reason for one to work harder than the other. There's no reward. None of that existed. And he was in a really bad place, the owner. Because how do you go and unwind all that? How do you go and say you know what, you're worth more because you're doing the CEO job and you're not worth as much because you're not doing it. So you're going to get a pay cut and you're going to get a pay raise and that's all going to happen next month. So it was interesting to have them have to deal with that and to work through it. He basically, in a way, because you're trying to create equality and fairness, you almost create this socialist society inside of a capitalist company that really doesn't work. And it was again, through the goodness of his heart trying to do the right thing for the kids. So ended up again wandering through. This was a five year strategy and kids are now making what they need to make. They're able to buy homes, which is terrific. You don't see sometimes, I think as an owner, by keeping control and by keeping that and by trying to make everything good for everyone, I think sometimes you don't see the unintended consequences that are out there.

Yeah, you know, I'm reminded of, I was a, I had a friend, I was an advisor on their advisory board. Not the coach and not the only advisor and that kind of thing. And this guy was a CEO of a company his dad had started and all of the siblings were getting some kind of pay from the company, but this guy was now the CEO and he was growing the business significantly, doing acquisitions and things like that. And then he got into a spat with the family over his comp. He's like, well, I have a totally different job and I should be paid differently. And this is the market and that kind of thing. And I love growing this and I'm going to grow it, I'm going to increase the value and I want a different share of all of that, like the comp. Everything. You can all make some money and you're all owners, but we have to unravel this thing. And they, anyway, they didn't navigate it well and they got very emotional and positional and dug in and eventually they, they blew the company up. And, and then, you know, after a generation, the company was gone. And this thing that had been supporting all of them because they couldn't get over it. But not only that, now the family holidays and things were, you know, irrevocably strained and, and I've since lost touch with them. But the last I heard they hadn't restored it. Like it was a rift.

You know, those things, yeah, they're, they are so unrecoverable. The longer you wait the harder it gets. And. And that goes. So years ago I wrote a book called It's a Journey. And the idea is to start with the four W's. The why, the who, the what and the when. Right. And leave the how and the how much to after you get all the other stuff done. And that. I don't know that story that you just told, but that would be similar to some of the other ones that I've heard about, starting with the how and the how much because you miss the. You miss the boat. And you know, going back to your prior comment about things getting mixed up, Bill, we. When I think about the equality and fairness, it goes into values systems. So. Which are subjective. They're not objective. So you know, is. So if you have ownership. So if you think about the three levels that get smashed together. Because I think there are three. There's the owner investor level. The owner investor level is just an investor. I've got my money invested just like I could invest in a stock or just like I could invest in a piece of real estate or whatever. But I've got my. Yeah, I've got my money invested. Then you've got a board of directors that serves the investors. So the board of directors job is just, you know, make money for those investors and keep their investment whole and hopefully give them a decent return. And then you've got the people who are in the job who should be paid at market value, which probably 95% of the time we do not. When we enter and start talking to owners, we do not see people being paid at a market rate, including the owner. Usually that is not the case. Nobody employees are usually being paid at market rate. But family members and owners are typically not. Or if they're investors, they're not. Yeah, makes it hard on the business in case if somebody leaves.

Do you say that it's always lower or that it's just not market. It's upper down.

It's always lower, going back higher.

Like I, I know some owners right now who are taking a very high salary instead of taking a profit distribution. And I'm like. And you're. You're paying yourself over market. Just take a regular market, pay for the job you do and then take your profit distribution.

Yeah, so. So it depends on. That's why I like doing this work so much. Bill. You asked me why I do this work instead of strategic work or. Yeah, but. Yeah, the way that my mind works. There are a lot of caveats to that. So depending on who my investors are, if I have Multiple investors. That's an easy question. If you don't have multiple investors. If you have multiple investors, though, and let's say you and I are two investors. If I don't take a high salary, which comes to me, then we take distributions. But you get half and I get half. And I might think that I'm worth more than you and I'm making more. And that goes back to this, the son who was building and growing the company. You know what is fair? Is it okay to distribute to everybody? Or. Because depending on the type of structure you have, LLCs, you can take disproportionate distributions, and S Corp, you can't. So, yeah. So how do we make it reasonably fair based on our value systems, which are subjective, to make sure that everybody's on the same page and understands what we're trying to do and why we value that person at that level. So it gets complicated with multiple people involved.

Let's talk about motivations. You started to share a story with me about surfing earlier. I'd like to talk about that because I have been. I like this new kind of wind surfing. And I am seeing our winds start to come up in San Francisco. It's time. The season has arrived.

It's coming. Yeah. I might go out this afternoon, but that sounds awesome. Yeah. He. This is one of my most favorite clients of all time. This client, I met him at a conference that we were at, and we just started talking, and it ended up that he was transitioning out. I did two transitions with them. I did a transition out of a firm that he was in because he was an advisor, so CPA type person and also financial advisor. So did that one to help him get out of that and start his financial firm. And then years later, we did a second transition when he decided that he needed to leave. He had a lot of foresight. One, he'd been through quite a few transitions himself, and he wanted to do this one really well. This was probably the last one that he would ever do in his lifetime. Two, he had a medical issue that he wasn't sure. He had to have some surgery, and he just did not want to leave the business high and dry if something happened to him and he wasn't able to come back. So we started off, and this is just a reminder of sometimes we think we know exactly what we want. And I can tell you that through the work that I've done over all these years, at least 50%, if not closer to 70% of the time, owners come out of this discovery process of what they want and building their strategy forward with a completely different perspective of what they went in with. So this owner goes into. He goes into this process saying, I want to sell to a third party. I want all cash, I want it all up front, and this is what I want to do. Right. Which is basically the how and how much again. And so I said, well, okay, hold on. And his lawyer, I'd been working with him, but his lawyer, he called up there and said, hey, I'd like to will you write up a document so that I could go find this third party buyer and I could just get this done. And the lawyer said, you need to go figure out what you want before we spend a lot of money on an agreement, because I can't write it if I don't know what you want anyway. So we start out and go through the why, really the objectives, and their objectives are, what do you want for yourself? And I found that owners are not Many owners are not selfish when they go through this process. They don't look at what's going to be fulfilling for them. How do they want to live their lives? How much money do they want in the bank? Do they want a second home? Do they want to travel? What do they want in their life? And one of my favorite objectives, which is from this client, his objective was he wanted to surf when the surf was up. And if you really think about that, I mean, Bill, you know what that means. It's the feeling of I can go whenever I want to, when I want to.

Yeah, at a moment's notice. Yeah, yeah.

Moments notice. So anyway, that was, to me, that really said very, very well what he was looking for. And it framed everything that we did going forward because he wanted to have the choice to work. He actually still works in the business. And I did that transition with that owner. Just this last year, she sold to a third party. So it's a great, great story about this business moving forward over time. But we started with third party, went to, well, that isn't what he wants. So then we went to selling to somebody who would be kind of a synergistic kind of a business. Somebody that would, you know, meld right in and this would push right in and be another arm to that business. And in discovering and looking at that one, he's like, nope, that's not what I want. And so then we went to the third. The third one that we looked at, and this one was an internal transaction. And what we found, we all have these mindsets and fears that keep us from really doing what we want to. They just are roadblocks. They stand in our way. And what we found out is that he was pretty nervous, I won't say terrified, but pretty nervous about going and talking to his two right hand people about transitioning, like, hey, I'm going to sell this because worried about losing them, worried if they didn't want to do it, worried if both of them, you know, wanted it and then we'd have a 50, 50 ownership and would they get along and what would that look like? And you know, the list goes on of all the things that we can spin up in our minds. But we positioned that. We helped him have the two conversations. One of them was interested, one of them wasn't, one of them wanted to leave with him. And so it worked out that he got what he wanted and it was kind of the fairytale story. All the clients stayed and everybody. I love the win, win, win all the way around. If you can get it, why not.

Try and you can be honest about what you really want. I think we spent a lot of time in life saying what we think we're supposed to want instead of what we really want. And there's not a lot of personal freedom to say what you want. And it's so much self imposed right that being honest. Listen, I'd like to surf a lot and whenever and I'd like to just go and have that freedom. That's a great motivation. I worked with a guy with a big company and he's like, look, I have this big company and that kind of thing but I want to run it in a way that when the wind is up I could go kite surfing and like awesome, you should have that. I like to think about that. I don't get that nearly as much as I want to, but I do. I have carved out specific times in season that I can either work or go. And I know that there's flexible commitments in there and there are specific times that are likely to be. So I can get kind of both of what I want. Right. It's, but it's thoughtfully by design because I'm not ready to retire yet.

But yeah, yeah, and, and you know, people, people, we have a different program, so we have this transition roadmap program and then we have another program called the Pathfinder. And it's really about understanding what's next for you and what's your next adventure. And being an engineer. I love statistics, I love patterns, I love all of that. And so it's this Pathfinder is about Exploring yourself, what are your patterns in your life and what really makes you tick and. And what makes you happy and fulfilled. So, yeah, if I have run more of those programs for people who have transitioned out of their companies, had a big liquidity event, have, you know, $50 million in the bank, $100 million in the bank, and they're miserable. They're just so sad and they wake up and. Yeah. So I think by design and having a longer Runway to get out of a company gives you the opportunity to move emotionally, mentally, into something else. And also which is required if you're the person transitioning, you've got to get out of the way for the successor to take over. And if you don't, it's not going to work, but you need something else to do. So it gives you a nice transition.

I think that notion that a lot of money or a lot of time is necessarily what you need or want, I think is completely mistaken. Like, purpose and fulfillment and a balance of fun, like all hedonistic pursuit, is not terribly satisfying. It can leave you lonely and shallow and. But nothing for you is also not so great. Right. But could you do the things that you find fulfilling, that play to your strengths, that you enjoy, and could you find places where those are all either completely aligned or certainly in close proximity? That's super satisfying. Right?

How can you be satisfying?

When I take a group of CEOs or a leadership team out on a sailboat on the San Francisco Bay and then we get to. To talk about their business and their lives and how they integrate, and they're all like, put in a challenging experience. Sailing on San Francisco Bay is not a lightweight thing. It's not sailing calm lake in the summer, it's awesome. It's exhilarating. They're challenged, they're engaged. They start to think about that, and then I'm like, wow, I made a difference for people. I did something I love in a place. I love being outdoors, being in the elements, pushing people. Like, fantastic, right? And like, I get it. All right. That's the kind of thing that I think is I took a group of entrepreneurs on a surfing camp to a surfing camp in Central America, and, you know, we talked about our business and that kind of thing, but then everybody tried to surf and nobody had been surfing before. Right. So fantastic.

Yeah, yeah. And you can hear that. I mean, in your voice, you can hear it. It's fun, it's exciting and. Yeah. And. Yeah. Making a difference in somebody else's life.

Yeah.

Yeah. And so, you know, going back to the why with an owner, founder, wealth creator, the why has to be you and what you want. And really taking a good look at that, because it's different with or without the business and in what capacity? And then what do you want for your spouse? I can't tell you how many times I've. Yeah, you just don't take the time to say, hey, what do you want in your life? And how are we going to do that? And then what do you want for your kids? Do you want to give them an opportunity to run the company? Do you want to say, absolutely not? You know, we're going to sell it and we're going to go do something else with that money. Those are all values. And then what do you want for the people who have helped you get to where you are today? Whether they're. Yeah. Employees, right hand people, other partners. What do you want for the business? Do you want it to continue to serve? Serve. Could be any philanthropic thing that you're doing. Could be the church, could be. We have a company, this was another Canadian company. On average, they gave a million dollars a year to the church, on average. And they wanted that to continue. So how do you do that? How does that work?

Yeah, well, there's a lot of what, whatever your particular cause is or your thing. Like in that case, they were happy about that. But I had another person I know who is giving all their money to things around climate. Protections or whatever. Right. Like thinking about reducing global warming and protecting the environment. Awesome. Whatever it is, whatever lights you up, like have that freedom to be able to do that, you know, I think we should be thinking about what we want our life to look like in our 20s, in our 30s, in our 40s, like at every stage. And it'll change a little bit, right? But I had certain thoughts about what my life would look like in my 20s, about my 30, 40, 50s. And of course it was different than that, but some of those elements carried through. And then in my 30s and early 30s, I started to think about that and some of those things were really much more true and accurate and changed the way that we ran our businesses. And our kids got to a certain point place, our family got to a certain place and we had to change the way we worked because it wasn't okay to go through life that way. But I definitely missed a couple of opportunities to sell big portions of companies to hang on. I shut them down too early, I ran them too long. I missed some of those moments. And you know, that's. That's heartbreaking. And I certainly don't want our clients to miss that moment. And the biggest thing is not thinking about it ahead of time, you know?

Right, right. Well. And. Yeah. And trying you. Everybody's going to miss some opportunities, so. And especially when you're trying to put more than one person together. I said earlier, it's a team sport. So you've got, you know, you've got the person, transitioning person, successor coming in. You're trying to match up their objectives so that they're together. The examples when they. That when you have conflict is when you don't do that. So, for instance, I'm making a whole bunch of money for my sisters and brothers, and I'm not getting comped properly. Right. And they just. And so that objective is different and not being recognized by the other side, then you end up with conflict. And if you. I always like the concept of giving a gift. So we're all gonna. None of us are gonna get everything we want, ever. I don't think if you find somebody like that, I'd love to know them. And so. And it's nice. It's nice not to have something being taken from you in what you believe to be unfair. So if you can have. But it's hard to have the conversation because as soon as you see the unfairness, you spin it up in your mind that they're doing it potentially intentionally or they're not paying attention to whatever is going on. Yeah. So if you can bring together those objectives and then give the person a gift, like, hey, you are working hard. You should get more money. Right. And I'm working hard, too, because you're using my money to make all that money. So how about if we figure out how much is going to us for the investment side and how much you get for really, you know, doing what you're doing and doing it for us, you're making the investors money. But that's a whole different conversation. And harder to have.

It is, for sure, harder to have. Tell you had one more story about a Midwestern company and maybe share that one as our final kind of story.

Yeah, yeah. This is. Owners make decisions many, many times because of what they're trying to accomplish. And many times it's not the financial number. So if you're going to do. Yeah. When you're trying to make a transition, there can be some remorse. And that if you go and just sell to a third party, you're out, you're done. No employees, no family members come in as owners. And this particular lady, she is Just a kind of a, I don't know, a hero in my world. She's so dear. And she bought the business from her dad. She decided that she was going to keep their community whole. It's a good sized business in a smaller community and she wanted to keep the community whole. So she decided that instead of going to sell to a third party, which she could have done and by the way achieved one of her objectives of all cash out within say 24 months. Done, done, done. Ready to go and do something else to keeping the community whole was a bigger objective for her than the money up front. And she decided to bring in a person who is a minority owner. Her goal originally and, and in these journeys her goal originally was to, to say hey, I'll sell it to you an employee and you buy the whole thing and I'll just, you know, finance some of it for you. But had to go get a banknote and was he wasn't in a place where the banking would have been the right decision. Plus interest rates were skyrocketing. It was a couple of years ago and they were going up very quickly. So you know, retooled the plan and she decided that she was going to sell a minority interest, help him run the business for two years, signed a contract that she would be out in two years that he's obligated to buy the business or what they'll do is go sell to a third party. So he's got the opportunity to do well, he's got two years to figure out his financing, go get other investors, go get other partners, active partners, inactive partners and if he chooses not to do that because it is wasn't right for him, whatever, they will go sell it together and he will have a small liquidity event while she has the larger one which I think again is a win win because he has the opportunity and it worked out. So they're in the midst of all of that and it's pretty exciting because again, you know, you, if you really think about the transitioner and the successor, the transitioner has been doing weakness for so long, they know how the business operates. The successor has so much to learn. Financial banking, relationships, taxes, all of this stuff. And so yeah, so he's been learning that and it's been, it's been a journey for both of them that they're enjoying.

Lovely. Well I, you know, having that in mind, being flexible and creative in the approach, thinking about what you're going to love down the road, what do you want the company to look like after you're gone. What do you want your life to look like? All of those are really useful things to do, and it really helps to start them years before you think you need to begin to envision them and lay the foundation for them. It can make a huge difference in you being satisfied with all aspects, not just the number of dollars in your account, but the whole process. What went into it, what happens to the company after you're gone? The thing that you've spent so much time, and whether it happened very quickly or you spent decades building it, you put a lot of heart and soul into building the thing. So if you think about your life beyond the business as well, you'll set it up for success. The company, Elizabeth's company is transitionstrategists.com transitionstrategist.com is her company. And you can go there. And then of course, she has a podcast on this to hear more stories and think about that. The Business Transition Roadmap podcast. That's a whole mouthful there with the list. It's long, but it's a long process.

And it is. It is. Yep. The sooner you start, the more choices you have. And. And if you're a futurist and a visionist, visioner or visionary type of a person, I just think. I think that playing with these concepts and ideas can be fun for you instead of frightening. Yeah. So I just encourage people to play with it and look at all the options and to have fun while you're doing it. Because kind of. Why not? Why not?

Well, then we have one thing that ties into that as well, and that is there's four stages of scaling your company. The last one is about the transition, about planning for and setting that. So four stages and then three secrets for the companies that we see that scale really well and easily. And the biggest. So four stages, three secrets, and we have a free course on that. You can go learn about each stage and what happens at each stage, how to navigate it, how to get to the next stage, and then with the whole sequence in mind. So you kind of know not just the problems that you're dealing with today, but what you'll be dealing with in the next phase. And these stages span years. They don't happen overnight. So we put together a free course to get you started with it. There's worksheets and examples and stories of companies and that kind of thing in that free course. Kalingcoach.com freecourse has got all of that there. You just give us your email, we'll send you access to the course. There's video, there's worksheets, there's downloads, there's examples, all kinds of stuff in there that you can kind of self pace. And one of them will go to the transition, which we deal with in only the lightest way. And then you can go to Elizabeth and learn more about the transition, go much deeper on that bit. But that's the last part of our free course. So thanks again to the folks at Storion who produce our show each week in, week out, get our guests booked and ready and promoted and everything like that. And to my friend and mentor Verne Harnish, who's longtime Colorado guy who created the whole scaling up framework and the Rockefeller habits that went before it and want to thank everyone for watching, for listening, for tuning in. We'll be back next week. Keep scaling until then. Bye bye Now. Are you ready to turn your goals into daily wins? You should check out our Scoreboard software. Powered by Align, it's the official software for scaling up. With Scoreboard, you'll get an AI driven coach for priorities and KPIs and it'll help keep your team focused on what matters most. With Align, you can track your goals in real time and you'll even see results on the go. With their mobile app you can rest easy knowing that Align has world class onboarding and support to set your team up for success. This is really more than just software, it's what I actually use to manage growth in our scaling up client teams. Unlock clarity and results with Scoreboard by alignment. To try it now, go to aligntoday.com Bill G One more time. Aligntoday.com Bill G that's aligntoday.com Bill G Check it out and try it now.