Welcome to today's webinar. Our speaker today is Cindy Reid from Ready for Next Advisory Group. Before I turn it over to Cindy, I'd like to let those of you who are live with us know that you may submit, excuse me, you may submit questions during the webinar via the Q&A tab at the bottom of the screen. This webinar will also be recorded so that you may watch or re-watch on demand at your convenience. And with that, I will turn it over to Cindy. Good morning. Thank you so much for having me here today. I'm delighted to be able to talk to you in regards to your dealership and whether or not you would consider it to be transition ready. So just a little bit of an introduction. Ready for Next is a collection of three different entities that serve the business owner community, whether it's family businesses or enterprise businesses that are corporately owned. And then there's also the communities in which they reside, as well as all of the professionals that work with them. And by professionals, I mean business owners have an ecosystem surrounding them that include lawyers and accountants and business advisors, financial planners, wealth advisors, et cetera. And that's not an exhaustive list. And we work together with those professionals. We also work together with business owners directly, like I said, as well as the communities, which means some of the members of your economic development or your governmental bodies who are charged with making sure that businesses in their communities have the supports and the resources necessary to ensure their success. So I specifically am a partner with Ready for Next and work in each one of those entities. And I help individuals like yourself and business owners like yourself to build stronger, more valuable businesses, trying to get you into that space where you're considered to be best in class and most attractive for when you are ready in the future, regardless if it's two months, two years, 20 years, 50 years from now, being transition ready, simply positions you in the best possible way for the eventuality of transitioning your business, whether that's an internal sale or an external sale, internal transition, et cetera. So we work with business owners like yourself to ensure that if you ever get a knock on the door, and believe me, it happens more often than you think. And usually right after I say it, somebody puts their hand up and says, you're not going to believe this, you no sooner said that. And somebody, you know, asked me if I would be interested in entertaining an offer for my business. And when you are transition ready, you are the most prepared to have those conversations and to be able to garner the most amount of wealth and capital from that business that you've spent your life building. So today's objectives, we are hoping to share with you the importance of our methodology, which is considered the three legs of the stool, and holistic planning for business owners of all types. So this is very universal and transferable between different types of business owners. We're also going to talk about the differences between fair and equal or fair and equitable, and how that shows up in family businesses and the complexities and some of the issues that it can cause when trying to go down that balancing act. We're also going to talk a little bit about the differences between legacy and liquidity and what those might mean to you. How the five Ds, which are death, disability, divorce, disagreement and distress is addressed in transition planning or being transition ready. So we're going to talk about the impacts of those five Ds and how to better prepare for them. And then we're going to talk about some of the resources that are available to you to support your business and the resources available through AED and RFN's partnership with them as well as directly through RFN. Now, throughout, like Liz said, if you end up having questions, by all means, throw them out there because I want this to be as interactive as possible. So if you have questions in the moment, something just grabs you by all means throw out there and we'll see if we can address it on the fly. So as I mentioned, the three legs of the stool is a methodology that we follow. And what it does is it takes, if you can imagine just a three legged stool, remove any one of those legs, and you're not going to have a balanced, you're going to have a stool that falls over, you're going to try and sit on and it's going to be in imbalance, but it's also going to be ineffective. So each of those legs of the stool is assigned one facet of your planning or one facet of your life. So once one leg is for optimizing the value of your business. So taking a look at the entity, the enterprise that you have, and making sure that it's optimal at any given point in time, whether, you know, it's again, in furtherance of a transition or a sale, or you're just wanting to manage a best in class business and reap the benefits of having the most amount of cash flow or the most amount of efficiencies, the most amount of client engagement and employee engagement, etc. So optimizing the value of your business has a lot of components to it. It is not all about financial, it can be about culture, it can be about the, you know, the humans and everything that you're putting out there, including the customer relationship approach and the values that you share with your community. Personal financial readiness, that really does encapsulate making sure that a business owner has taken the time to meet with whether it's a financial planner or their wealth advisor, and basically understanding what will I need in the future? What do I have at my disposal today? And we all know that business owners put an awful lot of their time, energy, resources, and capital into their businesses, whether it's in the early years or throughout the lifespan of the business, and ensuring that you've done the work to organize your personal financial planning and get the clarity around what do I have, what resources will be available to me when I transition this business, or whatever, you know, that looks like if it's an outright sale, or if it's an intergenerational transfer and understanding where is the capital going to come from or the cash flow going to come from in order to sustain me when I am no longer actively going to work. And depending on the business that you have, you may carry on and have it as a, you know, an absent owner, managed business, or it might be an outright sale, or again, an internal transition, but understanding your own personal needs and having that clarity is imperative to knowing what transition options would best help you meet your goals. If you have, I'm not going to spend a ton of time here, but if you can imagine going to your financial planner, and this is one of the challenges that we come across a lot, is that a financial planner is going to ask or want you to share what you think the value of your business is, and if you intend on selling it in the future, at a specific price, you think it might be worth, just pick a number, whether it's $2 million, $20 million, $200 million, $2 billion, whatever your lifestyle needs are, the lifestyle you've become accustomed to, or the one you'd like to become accustomed to, it's going to require capital and cash flow. So when you're looking at the value of your business and saying it's worth those, you know, dollar points that I mentioned, your financial planner is then going to say, okay, let's say it's worth $20 million. Let's say it's worth $200 million, you get my point, and plug that into what is the time frame that you think you would like to either slow down or stop working. So then they take that age or that year, and they say this amount of money will be available at that point in time to support you in your lifestyle goals and needs. If that number is either incorrect, or you have unproven, or maybe even a little bit of uneducated estimates or guesstimates of the value of your business without really, like, truly understanding where you fall in the marketability and the value of your enterprise, it can have a really big impact on whatever those goals are that that planner is trying to help you manage and prepare for. It's an unfortunate reality that 20% of businesses when they go to market the first time are successful in actually transitioning or selling. Now that leaves 80% of other business owners and businesses in a situation where they're not easily marketable, or they need to go back and do some work where they need to retool how they're bringing themselves to market. So understanding what do you need in future years, in retirement years, if you want to call it that, is imperative to understanding what do I need to get out of this asset, this business, or businesses if you're an individual that owns more than one business. Now the last leg of the stool, and each of these are equally important. Again, you will not have the balance if any one of them are, I guess, given less attention than the other. They're all equally important. Life after business is talking about who are you if you do sell your company today and new ownership takes over and you don't go to the office, you don't go to the dealership, you don't go to, you know, your business tomorrow. Who are you? What are you doing then? And it's easy for all of us to envision, oh, I'm going to the golf course. Oh, I'm going on a world trip. I'm doing this. I'm doing that. Like the things that we put off until we have the time to do them, the rewards that we work so hard to finally achieve. But the reality is, is that those things are usually, I wouldn't say temporary, but they're not the everyday. They're the nice big events, experiences, et cetera, that we look forward to. But then there's the every single day when you get up, what is your purpose? Who are you? How do I, how do you identify? Because we also are acutely aware that a lot of business owners' identity is very entangled and wrapped up in their business. And no longer being a business owner or no longer being that pivotal person or that known person in the community as that individual can sometimes be a challenge and a hurdle that some have not really prepared for or given a lot of thought to. So we highly recommend that individuals start to think, especially if you're nearing those ages of contemplating your next steps and your next phase in life. So whether you're, again, five years out or 15 years out, the more thinking that you can put into it and the more preparation that you can do in order to understand what your life after business will look like, the more successful and the more satisfied you will be. Another unfortunate statistic is that 75% of business owners post-transition or post-sale transaction are disappointed or are unhappy with either the result or what follows after that transition. So it's very important to us when we're working with business owners to address these things and to try and give them some resources and tools and some guidance and support on that journey to make sure that they are in the best possible position and the most prepared that they possibly can be. Now take a typical, I'm just going to transition a little bit here to kind of make my point in regards to how imperative it is that business owners understand, A, their resources, but also the differences between a non-business owner investor, if you want to look at it from that perspective, and a business owner investor, is this is a typical picture of a 65-year-old who has a diverse portfolio portfolio. They've got a certain, and this doesn't represent anybody, it's just for illustrative purposes, but you can see that the pie chart is made up of different types of assets. They have real estate, which might be their primary home. They might have real estate rentals as well. They'll have stocks, bonds, mutual funds, whatever the other investment assets and other savings vehicles are that have amassed their financial wealth. And when we take a look at a business owner, a 65-year-old business owner, you can see that majority of the financial assets are actually the business or trapped within the business. So understanding how to extract or harvest that value, and the best way to go about it for your goals and what your priorities are, are the highest priorities when we are working with business owners, is taking a look at this very illiquid asset and figuring out how to make it the most valuable and the most transition or transferable as possible in the timeframe that matches the goals and the hopes of the business owner. A lot of businesses are unaware of what their actual true or current values are. And if you have or have not had a business valuation done in the past, we always recommend at least a calculation of value, if not a formal valuation, be done every few years just to benchmark how you're doing, give you an idea of what the value of your business is as it sits currently, and give that insight to yourself so that you are aware or more aware. Now, there's a very big difference between a formal valuation and actual sale price. And I think that there is also a little bit of confusion in regards to those two different terms, when it comes to business owners and the expectations that they have of, well, I think my business is worth 20 million, or I had a valuation done, and it said that my business is worth 20 million. Okay, but there are also many different ways to value a business. And if you can imagine, say, for estate planning purposes, having an evaluation done, especially if it's to mitigate taxes or to try and reduce taxes, the valuation is probably going to be as fairly as conservative as it can be to bring the value down. So, of course, triggering any taxes will be as minimal or as mitigated as possible. When you have a valuation done for the purposes of sharing it with a prospective buyer, you're going to want that value to be as high as possible. So, of course, the valuation for that purpose might be, or again, it could be in a partnership situation where one partner is wanting to exit if there's more than one owner. Of course, that valuation is going to be driven to hopefully garner the most amount of value because, again, the partner that's wanting to exit is going to instruct the business evaluator to do evaluation for the purposes of the highest value for transition purposes. There's a lot of different ways evaluation can be done. They're all very close, but they have different purposes. When you're comparing that valuation number and what a potential buyer is willing to pay you, there can be vast differences. For example, you may have a business that is a perfect strategic acquisition for another company who is trying to grow either another vertical or they're trying to expand their offering, they're trying to expand and diversify their business, and their strategic planning says the best way to do that versus growing organically is to, of course, go out and acquire a business like yours. So, if it's a strategic buyer that's coming to you and they're wanting to make sure that they can get something that's a really great going concern that's a best-in-class business, they will pay you a premium over and above, likely pay you a premium because they're coming after you for very intentional strategic purposes. So, if they're going to actually be out searching for that prize, which is you, you may very well garner a premium. So, therefore, you will get more than what you had ever anticipated because you're a desirable business for this strategic buyer. There are other ways in which you may receive a premium. You may, in fact, be subject to a discount depending on the environment, depending on the situation, and depending on the industry, depending like all businesses are slightly different. I understand we're speaking of, you know, AED dealerships today. So, you probably have a lot of similarities, but the gist of your businesses are probably very similar, but how you run them and different nuances within your business can be very different and cause there to be different values, even though they look like, okay, we're all on the same street, we all have the exact same, you know, storefront, we all have similar businesses in the exact same industry, they should all be, you know, and if you're all running and, you know, making approximately the same amount of revenue, it's easy to think that all of you would be valued the exact same way. But there are nuances and there are differences in those businesses that will absolutely have an impact, either positive or negative, on what you achieve in your sale price. The reason for taking a look at this too, and it is an ill, like when you look at business owners that have the majority of their money in their business, the fact that it's illiquid or that it's, if you look at it from the perspective of you have one stock, okay, without evaluation or without any really clear understanding of what your business is currently worth, and therefore checking in on it every few years to see how you're tracking or where you're, you know, the evolution of your business is taking you, good or bad. It's like having a stock with 80% of your wealth given to, you know, a wealth advisor or a broker and you call and you say, how's it doing? And he says, nope, we have no data, no, you know, no idea. There's no performa, there's no prospectus, there's no monthly or even annual statements that come out to show you how you're tracking. That would be a little unnerving, but that is what business owners deal with on a regular basis is that they basically have one stock or whatever all of their business values are. And not a lot of, again, benchmarks or measures and metrics to be able to keep up with, where am I going and how am I doing? So moving on from that, when we work with businesses and we talk about value acceleration, again, current state is where you are right now. Understanding what your business value is right now, understanding how on a scale of, let's say A, B, C, D, A being best in class, D being you're at the lower end of the spectrum and have improvements and opportunities to increase your business to a best in class. So wherever you are, when we're working with business owner, we meet you where you are, we assess the current state, see where there are opportunities for improvement or to reduce risks, which also obviously causes there to be an improvement in the business. And then we look out and we understand better. We, of course, with doing assessments and talking with you and understanding your priorities and your goals and your future, either priorities or where you'd like to be. That ideal state, understanding where you are currently and then building that bridge to get you there, that's value acceleration. So looking at, okay, currently I'm worth 5 million. Currently I'm worth 50 million. We work with businesses all the time in all different sizes. So even if they're a $500 million business and they wanna be a billion dollar business, your current state is where you are right now. Taking a look, getting in, finding out where your value drivers are, your value killers are, the opportunities for growth lay, and then building that plan and those processes to get you to your ideal state and where you either want to be or need to be. Remember the three legs of the stool that I talked about a couple of minutes ago. If you have your personal financial planning in order and you realize, because you've also done some work to look at what the business value is, and now you've got a mismatch, I thought my business was worth, again, 20 million, and I need 20 million in order to be able to live the life that I would like to live. Whatever those numbers are, they're your own, and that's very personal. But in my example, if you have a business you think is worth 20 million, you think that that 20 million will get you through the rest of your life with, you know, comfortably or sufficiently. And then you find out, because you do a little bit of the work and get a valuation done, or you get a pricing study done, that's what we call them, which is more of a real time, what will the market pay for your business? The difference between, of course, if it's 20 million and all of a sudden you find out it's worth 15 or less, and the other being, I need the 20 million, and you work with your financial planner to find out it's actually 30, the difference between those is what we call the value gap. So you may have hopes and dreams and goals of growing your business just because you want, and you're, you know, you're that type of a person that is always constantly improving upon and making better and trying to do the best in their business and grow their business. Or you may find that value gap drives you to have a need to increase the value of your business prior to transition, because you will not have enough in order to support yourself and to ensure that all of those, you know, those hopes and goals and those priorities are met post transition or retirement, whatever you want to refer to that next stage of life as. So I mentioned what we call value drivers and value killers. There are specific things within every business that add value and detract from value. So for today, I'm just going to highlight basically the top five value drivers and value killers. We'll start with the things that are the value drivers, because you're probably wondering, or what most business owners ask us is, okay, I'm current state right here. How exactly am I going to go from here to ideal state? What are the things that I could do or I'm going to need to be prepared to entertain doing in order to improve upon that enterprise value? Well, revenue growth is probably the top and creating sustainable and consistent revenue growth is a key driver. If you put a hat on as a business buyer or an investor versus the business owner, if you look at your business as we would through the lens of a buyer, you get to understand and get a better appreciation of the person that's going to come and buy your business is an investor. And they're going to look at yours and every other one that they're contemplating investing in to see which one is going to give them the best rate of return for their investment dollars. A really great way of putting it is, imagine everybody on your street where you live all put their houses up for sale at the exact same time. What is going to ensure that your house stands out from the crowd? If only 20% of those homes are actually going to sell, what is going to ensure you're in that 20%? What is going to drive the value and make your business or your home in this analogy, the most attractive and the most valuable that you can make it so that the buyers that are obviously shopping and come up and down your street and take a look at those houses, stop at yours and say, this is ideal. The investment that we would need to make is small. And if it isn't, we know that we could get our money back and have a rate of return that is significant by making these investments. So those are opportunities that buyers would see in your business. But making sure that you, again, are transition ready is going to help you to be one of those 20%. So getting back to what some of these things are, some of the value drivers that we working with, whether it's RFN or another business advisory group that focuses on value acceleration and transition readiness would focus on, of course, would be the revenue growth and making sure that it's sustainable and consistent and that you can demonstrate that you've got growth in your future and that you're going after it. Profitability, so making sure that you understand and that you have a healthy profit margin. Again, it might be industry specific, but making sure that you are on top of it and that you've got efficient cost management that contributes, that significantly contributes to value. Your market position, looking at a strong market position and competitive advantage also enhances value. Operational efficiency, so not a lot of waste. We would want to position any business as streamlined and one that has effective operations, though that definitely improves overall value. And we do a lot of operational assessments so that we can draw attention to the things that could use improvement or have opportunity for improvement to increase value. And some of those are really quick wins. Like this work that I'm talking about, this value acceleration work that I'm talking about isn't, it feels heavy. It sounds like there's a lot of work to do, but once you get in, there are some small levers. There are some small things that you can do that can have an immediate impact and a really profound impact over the longer term. I'll maybe give you, if I have time, I'll get into that a little bit more or a little bit more in depth. But rounding out the top five value drivers would also be strong management teams. I had the opportunity to talk with the AED Women's Forum or Women's Summit in New Orleans a couple of months ago. And we were focusing on teams and building cohesive teams and a culture of best in class teams. And I cannot emphasize enough that having a strong management team and competent leadership that can execute the business strategy and whatever your strategic visions are is really crucial to growing the value of your business. So with that said, the top five value killers, if you want to look on the opposite end of this spectrum is, and I'm sure that you could probably guess the first one, it's going to be poor financial health. So high debt, liquidity issues, financial mismanagement, those things can really erode your value. Legal and regulatory issues. So if you've had or consistently have legal problems or non-compliance issues, they can have a really big significant impact as well, negative impact as well. Customer dissatisfaction. I know this sounds, it sounds simple, but it really does have a really big impact. Client testimonials. If you've got a website where you could include client testimonials, if you've got the Google reviews option for people to do, I would absolutely, if you think that you've got great customer relations and customer relationships, I would absolutely advocate and strongly suggest to you to get some of those things in writing, to ask them if they would give you a testimonial and if they would be comfortable in putting it on, if they would be comfortable, you putting it on your website or somewhere in house, or even just in a file to gather because a buyer is going to want to know that you're revered in your space and in your community and that you've got a great reputation. So customer dissatisfaction and loss of customer trust and satisfaction can really harm your business and the business value. Technological obsolescence. That is definitely a value detractor. So failing to keep up with industry trends and technological advancements can also reduce your value. And to round out the top five, weak competitive position, meaning you have intense competition and you really have a lack of differentiation that can diminish your enterprise value. Again, going back to that analogy that I use that all the people in your neighborhood are putting their houses up for sale at the same time, what would drive an owner, sorry, a prospective buyer or prospective new owner into your house, into your business? What differentiates you from the sea of sameness? If everybody sort of looks and feels the same, having that market differentiator will help keep you above the rest and drive more prospective buyers in your door. And there's different ways in which to help you create that market differentiation. Now, when we're talking about ways to increase enterprise value, there's really three very specific ways in which you can increase that enterprise value. Increasing earnings is definitely one. And how can you increase earnings? There's a whole lot of different ways that you can do that. And it's not just working, you know, eight more hours in a 24-hour period. There can be a strategic focus on diversifying your products or service offerings. So you can introduce, and I don't know if this is applicable with this group today as much as maybe others, but I'm thinking there's probably different ways in which you could diversify with either new products or services to appeal to a broader customer base. You can optimize your pricing strategies, meaning you can conduct market research to set competitive and profitable prices. Or understand, I mean, this is the other thing about market research is that you can get a really good understanding of what your competitor's pricing is and see whether or not there's a little wedge that you can put in there to be more optimally priced. You can enhance your marketing efforts. So investing in effective marketing strategies to reach and attract more customers is money well spent. Improve operational efficiencies. I talked about that a minute ago as either a value driver or a value killer is, you know, working on your operational efficiency and streamlining processes to reduce costs and improve overall efficiencies is definitely going to drive and increase enterprise value. Customer retention programs, making sure that your customers would never think of anywhere else to go other than you and finding ways to implement strategies to retain them, your existing customers and foster those long-term relationships. Investing in new technology. Mentioned that one a second ago. Cost management. Again, it's not a slash and burn cost management approach. It is definitely taking a look at and rigorously managing expenses and identifying areas for cost savings without compromising quality. Emphasis on that. Another way of increasing earning is employee training and productivity. Investing in your actual employees and their skills increases productivity, which means more is done in a day, more is done in the hours that they have, more is done with less, with people that are more highly trained and are more competent. And then one other way to increase earnings to just speak about today is strategic partnerships. So maybe forming partnerships to access new markets, resources, complementary capabilities that can also be explored. We look at reducing risk in any business as a fantastic opportunity for increasing enterprise value. Different ways in which you can reduce risk and having a risk assessment done is identifying any of the person, like the actual potential threats and vulnerabilities that may expose you in your business or create risks that you could mitigate and address. Diversification is another big one. Diversifying products, services, and markets to reduce dependency on any single source is really important. Insurance is another one. Obtaining the right type of insurance and the proper amount of insurance in order to mitigate any financial losses in case of unexpected events. So if you're in, for example, a partnership with somebody and your enterprise value is sitting at anything in the millions and you don't have cash on hand in the event that your partner wants out or dies unexpectedly, is unfortunately disabled due to sickness or accident and needs to be bought out, having insurance to cover off those different types of events helps to reduce the risk that you inherently have within your business. Compliance and regulation, making sure that you're always on top of and comply with industry regulations and standards to minimize legal risks is a way of reducing risk. Cybersecurity, financial risk management, supplier vendor assessments to make sure that you are assessing and monitoring risks associated with suppliers and vendors to ensure reliability. Strategic planning, aligning your business strategies with risk management considering potential challenges and uncertainties is a way of also helping to reduce your risk. And then of course, continuous monitoring. So those two different categories or ways of increasing earnings and reducing risk both add significant enterprise value and positioning yourself as best in class is another way in which to increase your, and again, overall enterprise value, but it is going back to that real estate analogy. You have the house on the street or one of the top houses on the street that everybody is attracted to. So you've got to, again, to qualify or to consider yourself best in class. You likely have exceptional quality. You have a very client-centric approach. You've got great innovation and adaptability within your organization. You've got good talent, great talents, great expertise. You've got great brand identity, effective marketing and positioning. You've got good operational efficiency, ethical business practices. Again, those customer testimonials and reviews, and you've got great industry leadership. So I'm repeating a lot of the same things in different ways to make a point that there are ways in which you can address and some require a shorter lift and others a little bit larger lift, but with time, you can grow. And sometimes we only have a short period of time when we meet a business owner that says, I have an imminent transition in my future. Wasn't expected, it's here, or I've had somebody knock on my door. Now, what do I do? How do I get this house? How do I get my business in the best shape possible to garner the best and harvest the most from it? So again, depending on the timeframe, obviously we would prefer to start working with a client with as much runway as possible because then the most work can be done and the most value can be driven in a more measured approach in bite-sized chunks, if you will. But we don't always have that privilege of time. So if you find yourself in a situation where something is happening again, if it's a minute or if it's like under that 24 month mark, there are things that we can do to get in and help make that business look absolutely the best it can to be able to market it and get the most out of it. I'm just gonna transition now to a conversation that really tends to beleaguer business owners. And I say that because it's one that can be a real stumbling block when it comes to planning for the transition of a business, a family business specifically, when it may include a child or a family member coming into the business where there are more than one children or child in the actual family. So let's say you've got one, two, three kids. One is easy. You know, it either all goes to them, or none of it goes to them, or a portion of it goes to them, but there's nobody else that you're really necessarily having to do this balancing act with to figure out, well, am I being fair to this one? Am I not being fair to that one? The picture on the screen right now is of a farm, you know, a couple of different fields, farmer fields. And I see it show up, and we have a lot of ag industry clients that we help with this issue, because again, predominant amount of their wealth is tied up in their business, and they tend to have one, maybe two children that wanna take over the farming operation, and one, two, 10, depending on where you are, that do not. So how do you go about figuring out that balancing act and deciding what is actually fair to the one that's going to be taking over the operations of the business? Do we end up putting everybody as equal owners? Does that seem fair? It seems equitable. But now if they're not in business, not working in the business, and the one child that is in the business, has been in the business, now wants to take over the business, is the exact right person to take over the business, are they hogtied? Are they held back? Are they stymied by the opinions of the other owners who are not working in that business? I would go so far as to ask, are they now working for their siblings because they're going to work, and the onus is on them to create and maintain a viable and sustainable and profitable business for the benefit of others versus just themselves? There's a lot that goes into this conversation, and we have a lot of really great tools and ways to approach it so that we can address what fair looks like and what equal looks like and how to create the most appropriate blend and the most appropriate balance for the individual families. Because as the quote there from Aristotle says, the first form of inequality is to try and make unequal things equal. It's very, very, very difficult to leave, again in this picture, if you can imagine a farm to multiple children, and then have the one farming child try to operate that farming operation or buy out their non-farming, now new business partner siblings so that they have that autonomy and that they, because there just isn't enough leverage that's available. And it's highly unlikely, I should say the majority of business owners that we deal with have shown us that it's highly unlikely that there are equal amounts of non-business assets available for distribution to the non-business children. So there needs to be some conversation and some communication around how it's going to be done and even a little bit of creativity as to how to approach it. We talk a lot about requiring clarity. We emphasize needing clarity because without it really, if we're your advisors and we don't fully understand and have a clear understanding of your goals, your challenges, the opportunities, the barriers to success and the ultimate goals that you want and have, without that clarity, everything else is guessing. You're going to have the best of intentions, but without truly understanding, again, getting back to that three legs of the stool, if you don't fully understand what your personal financial needs are, how will you be able to go back and assess the value of the business to understand if it will or will not provide for you what those needs are? Understanding also the differences between liquidity and legacy are pretty simple. Liquidity being, okay, I've got all my cash in my hand or legacy, I really want my business to carry on in my community for forever, whether or not it's intergenerationally or it's just a cornerstone in my community that would be missed and it would be detrimental to my community if it were to be bought and moved outside of my community, looking at all of the staff and looking at the income generation that it provides. So getting very clear goals around how much or if liquidity is the primary goal or the secondary goal and whether or not legacy is the primary goal and secondary goal, and then making a good plan and pathway to achieving that is paramount to having a successful transition. There are five basic stages of value maturity. And when we're talking about value maturity and the value in your business, when you're identifying it early on or you're just starting your business, you're identifying the value in your business. The next stage, once you've actually managed to create value, you've gotten over that initial J curve and now you're in a positive position and you're starting to create value. Now you've identified that value and you're in a position that you're wanting to protect it. So you're now, okay, I've got a business that went from whatever I purchased it for or organically grew it from the ground up to, now I wanna make sure that there's no erosion or that we don't backslide from here. And then the next phase is, okay, I'm ready for expansion or I'm ready for growth. And of course the growth being what we consider to be value acceleration or any enterprise growth strategy, that's the building component. The harvesting component is what we're talking about today, being transition ready. How are you going to reap the rewards and harvest the value of the business that you have grown throughout these stages? And then of course the last phase is managing that wealth and making sure that that wealth then either provides for you for your remaining days or creates a legacy for future generations going forward. So when we're talking about some of the risks in a business, there are actually risks like risks that are applicable in these three buckets that should feel like such a downer talking about all these negative things at the moment. But at the same time, if we're aware of them and we can overcome them or we can mitigate them as much as possible, it is all to your advantage. So when we take a look at some of the risks that business owners have personally, we have the risk of death, disability, divorce, health, negative health, I mean, good health is not a risk, potential accidents and family tragedies. All of these things either take you out of your business or take your focus off of your business. Financial, you have market risks. We've got diversification risks, personal loans and debts, which is financial. We've got personal lawsuits that can creep up and have a significant impact on us depending on the structure of your business and how you own your business can be catastrophic as well if there isn't insulation between you and your business. Your business itself, if it's personally owned, meaning it's a personal asset is unfortunately subject to or at risk for personal lawsuits. When it's in a corporate setting, of course, you've got that insulation that I was just referring to. Loss of earnings, earnings power and long-term care can be huge financial burdens or financial risks. And then of course, in your business, you have customer-related risks. Key people that may vacate, leave, be poached, that is an existing risk. The economy is always a risk depending on what stage we're at or what phase we're in. There's distress, there's partnership disagreements, there's owner dependence. That is a very big risk. If the company cannot operate without you, if you cannot go on a vacation and trust that it is all gonna run smoothly and that you've got management or people that can step in and continue your operations without it falling apart, that's owner dependency risk. So when we talk about those risks and the big five Ds, it's unfortunate, but nearly 50% of all businesses are actually exited and are involuntary and forced by dramatic external factors. So as much as you may say, I don't have to worry about that, I'm not actually looking to retire, I'm not looking to exit my business, transition my business, slow down for however many years out you're wanting to project that, any of these things can happen at any point in time unexpectedly. So I know I'm sounding like a broken record, but being transition ready means you've got these things looked after that in the unfortunate situation where one of them may occur, you know, okay, I've died, but my house is in order, my personal financial planning is in order, my family or whatever my situation is will be well looked after, my business, I've got great leadership, I've got it taken care of, I've got succession in place for whoever would run it, or I also have, if that isn't the case and needs to be sold, you've got a well run efficient kind of best in class business that you can entrust somebody else, the executor, whoever it might be, to then take your business to market and garner the most amount that you should have gotten had you been there to sell it yourself. Permanent disability, divorce, disputes, distress, all of those, again, ensuring that you're transition ready will actually go through each of these and make sure that you're prepared if and to a degree when they will happen. So we definitely believe transition readiness and transition planning is a process. It is a journey. It is not an action or an event. It is not the thing that happens. It is the getting ready and the work that is done throughout the entire, well, lifespan of your company, for sure, if not your lifespan from the time, you know, we become adults and entrepreneurs all the way through to the end of days. That is an entire journey and transition planning is exactly the same. And we really thrive on being the accountability partners for our business owners on that journey to make sure that their next phase and wherever they're wanting to go is a well-thought-out, well-planned, and well-executed intentional endeavor. So for all of those that are with me right now, or if you are watching this recording, I encourage you to use this QR code to find out how transition ready you are. And you might be surprised. I can tell you that most business owners that take this and do this little scorecard are, I wouldn't say pleasantly, some are pleasantly surprised, but a lot are given visibility into the opportunities that exist to become more transition ready. This, it's a very simple scoring, it's a great tool that will give you the results in about five minutes. I think you need to sign on. You'll be taken to our Ready for Next, to our website, and you'll get in, like I said, an immediate response to this little worksheet and to this scorecard. And I, again, it's completely anonymous. The results will be returned to you immediately, but it will give you a much better understanding of where you and your business are today so that you can begin working on your business rather than just in it to create that transition readiness that will improve its value. In partnership with AED, we've also created an owner readiness hub that is a plethora of resources that are available to you at no cost. It's through your membership with AED. And the QR code that is currently on this screen will take you directly to that hub. And I, again, strongly encourage that you take a minute to go there and tool around and see some of the resources that have been created for your use. They will assist you in understanding, educating yourself, and also begin to build the value in your business that we've been talking about today. There's interactive assessments and exercises. Who doesn't love that? But they can give you immediate scores again to give you more visibility and more understanding of whereabouts you are in this journey. And it will give you more education on the value acceleration, not only methodology, but the steps and the ways in which we go about building value. The succession transition planning strategies, there's so much good information in here. I highly recommend that you take a few minutes, just over your lunch hour or in the evening sometime, because I know all of you are no doubt extraordinarily busy. But this is a great opportunity for you to start working or to continue working on your business with some really, really great tools. Now we are going to be attending the AED Summit in January, of course, in Vegas. And we have a suite on floor 27B. The number is here. There's our QR code to take you to our information before the summit. And I really am excited if any of you want to reach out to us beforehand, please do so. And connect with us directly. Go to AED and ask them how to get in touch with us. If you go to that owner's hub, or you do the scorecard, you'll be in communication with us then. If you'd like to have a conversation before summit, or if you'd like to meet in person and confidentially have a conversation about things that you would like more information on, we would welcome that. And we would really look forward to that. So with that, I have one question, and I'm so sorry, I have just found it. It says, how long has RFN been around? And give a case study of something good RFN has done for a client. Alrighty, well, I'm going to give my answer live. And RFN is a merger of two companies that have been around longer than AED, or sorry, have been around longer than RFN have been around. So SVA and the Felix Group Canada came together. I've known the partners through like the SVA partners for years and years, but we merged and became RFN, I believe in 2018. We both existed in a Canadian and a US environment, and then merged and became international in 2018. And to answer the question of giving you an example of something that we've done for a client, there are so many, but I know I am very much at the end of my time here. I can tell you that through the work that we have done, I will give you a small example and a large example. We have worked with businesses that are what we would consider to be a micro business to help them. Somebody knocked on the door of this, a lumber company. It's a bit more than a lumber company. It has a retail component and a builder. Anyways, let's just call it a lumber company for simplicity sake. And they were made an offer, unsolicited offer. And although we had been talking with them for years, trying to get them to address their transition planning, you know, necessities, they found themselves kind of behind the eight ball when this unexpected buyer came out of the woodwork. And the original offer that they were given was substantially lower than what the business owner thought his business was worth. Although he did not fully understand what his business is worth. He had an idea, it was some metrics, it was a multiple, you know, he was getting some feedback from the accountant, from the, you know, other business owners that he knew in his industry of what it should be. And he had this, he was actually wanting to exit in a few years. So this was very serendipitous for him because the timing was pretty good, but the buyer did not wanna wait for him to be ready in two years. So we got in, did some very fast work in under 12 months and managed to increase that offer from the buyer through doing reverse due diligence and cleaning up a bunch of things, you know, the number of things that we could de-risk as best we could, as fast as we could, and really made that company shine and had a different conversation with those buyers prepared about six months after they came with their first very, I would consider it to be a mobile offer or discounted offer. And he was able to get almost three times their original offer just because of the work that we did in under 12 months. So yeah, am I patting ourselves on the back? Absolutely. So that was a smaller company actually. And we've also had larger firms, international firms that we've worked with to help with their operational efficiency, with de-risking their company, with getting really tight on their strategic planning, with looking at their organizational structure, with looking at all of their, you know, sort of stem to stern and have worked with them for, I would say going on about six years, if not maybe a little bit better. And not just through natural growth, but because of the intentional work we did with them, their business is now worth about double when we had originally started with them. And that wasn't just going to happen organically. There were a lot of stressors and a lot of challenges within the company that we uncovered and a lot of opportunities to improve, which they implemented and did a fantastic job of and saw the rewards. So hopefully that was sufficient to pique your interest in asking more or learning more. But at this point, I am done. And if anybody, you know, would like to ask any more questions or has any more interest in asking and talking with us further, please get in touch. And I'll turn it back over to you, I guess, Liz, to wrap it up. All right, great. Well, thank you, Cindy, and thank you everyone for attending and we'll see you soon at Summit. Thanks. Thank you.

transition ready

business

Ready for Next Advisory Group

value drivers

financial health

family businesses

death

disability

owner readiness hub