Why 60% of Business Transitions Fail (And It's Not the Tax Strategy) | ft. Andrea Carpenter | Ep. 505

Speaker A: Before we jump into this episode, I'm going to ask you a quick favor. We have over 500 episodes of the Siteshed podcast in the backlog now, which is amazing. However, only a small percentage of people that actually listen to this show follow the channel. 16%. In fact, following us helps in a big way. It helps us understand the type of content that you want to hear more of, which is how and why we continue to make better and better episodes. And as your host, I would be super grateful if you could please take a couple of seconds right now just to quickly hit follow from the app you're listening on. It might seem insignificant to you, but it does make the world of difference for us. If you're enjoying the show and feeling super motivated, I might even be so bold as to ask you to leave

Speaker B: us a review for you folks that

Speaker A: have been around for our, uh, journey to 500 episodes. Thank you so much for being part of it. And if you're finding us for the first time, welcome back, buckle in and look forward to the next 500.

Speaker C: So my definition of failure is anyone who is exiting their business. And we always say, you can exit your business, but one day you're going to be out of that business. It's those people that come out on the other side. They're not happy with how something went. I think it boils down to is communication, how the generations talk to each other, people having clear expectations between what is happening in each person's role.

Speaker B: Andrea Carpenter reveals why most family business

Speaker A: transitions fail and how to fix yours.

Speaker C: If there is a generational transfer, how do you invite those people in to start to have a conversation and it doesn't have to be like, someday you're gonna own this business, or I promise that I'm gonna hand the business down to you. I'm starting to think about what the future might look like, and I'd love to explore what the future for both of us as we start to explore this.

Speaker A: A quick thing before we jump.

Speaker B: Jump in.

Speaker A: The Sideshed podcast has crossed the 500 episode mark. 500Amazing Conversations with business owners, operators, and experts. People that have been in the trenches. And we're super proud of every one of those conversations. But here's a stat that gets me. Only 16% of our listeners actually follow the channel, which means the vast majority of you are listening without us even knowing that you're there. Following the show helps us keep making things better. It shapes the content. It signals what works, what doesn't. And honestly, it matters more than most people realize. If this show has helped you even once, helped you think differently, helped you make a better decision, or just maybe helped you feel less alone in running your business, please hit follow right now. It'll take a couple of seconds and

Speaker B: it does mean a lot.

Speaker A: And if you really want to make my day, you could leave a review.

Speaker B: For those of you that have been

Speaker A: here since the early days, you've been part of that journey, episode 500.

Speaker B: And we thank you so much.

Speaker A: We don't take that lightly. And if today is your first episode, welcome aboard.

Speaker B: Buckle in and enjoy the show.

Speaker A: Now let's get into it.

Speaker B: Andrea, welcome to the Sideshow podcast.

Speaker C: Glad to be here.

Speaker B: All the way from Denver, Colorado.

Speaker C: Yes.

Speaker B: Unreal. Thank you for joining us. Today we're talking about why, um, business transitions fail. Um, but before we jump in, first of all, can you give me an overview as to what that actually means and what we're going to be talking about and then give us a bit of a background as to who you are, what you do, where you do it, why you do it?

Speaker C: Yeah, yeah. So my, my definition of failure is anyone who is exiting their business. And we, we always say, you can exit your business, uh, vertically or horizontally, but one day, one day, one way, you're going to be out of that business. Uh, it's those people that come, uh, out on the other side and they're not happy with how something went. Um, people obviously don't get everything that they want. And as part of a transition or a sell, um, and a lot of times we say, we talk about business transition, we talk about succession, and everyone's like, whoa, that's not me. That's a long ways away. But what you're actually doing is you're shortening your time frame. You get within two or three years of wanting to do it, and the number of options that you have are a lot smaller, which just increases those chances of things maybe not coming out, um, the way that you want and limiting your options.

Speaker B: So, and so when we're talking about like, uh, transitions, we're talking about transitioning from owning a business to not.

Speaker C: Um, there are so many different types of transitions in our work. Typically what we're doing, uh, is we're helping with what I would call an internal transition. So a business owner who has identified someone on their staff or their team, a, uh, family member, if it's a family owned company, who is going to take the reins, uh, and take that over. But a transition could also be, I went down all of those paths and I decided I was going to sell to a third party that um, I was going to get acquired by another firm. We were going to join forces together that we were going to do an esop. So really it's, it's anything that's different from where you are today, kind of launching you into the future.

Speaker B: We've done a few podcasts um, over the years and one actually only a couple of days ago on not so much like uh, why business exits fail, but more like how to sort of prepare a business so that it can, it can be acquired. Um, the. We've all seen these disaster stories over the years of businesses that have like handed down to children, you know, the whole nepotism sort of model and it just like clap out basically. Um, so I, I've actually did a podcast. Why? Uh, they're going back a couple of years now with a um, very well known guest on the show Al Levy was talking about, you know, like what you need to do in order to hand a business down to, to family members, um, especially ones that feel like they're probably more entitled than deserving. It's not, we won't get too far into that right now, but um, it's a thing, we've seen it over and over again. Um, um, is this. How did you get into this?

Speaker C: Yeah, so, uh, my dad, not, not constructions, but my dad built a company, ended up selling it. Suddenly I found myself, uh, not as an inheritor of, of a business, but inheritor of wealth which brought me into how do you make the next generation more successful, more prepared? So if there is a situation where that person is going to be stepping up into the business, um, that they get it, want it, have capacity to do it, are excited about it, are a good fit for it. Um, how do you deal with fairness and equality between siblings, uh, people who are bringing different agendas to the table. So that was really my interest coming in. My business partner, Elizabeth started doing work with families on internal transitions 30 years ago and uh, really kind of partnering her support for the business owner who's getting ready to exit and the next generation who's the rising leader, the people coming up inside the business and um, helping those two people meet ah, and come up with a transition and a solution that, that works really well uh, for both sides. Um, has been a really fun collaboration of sorts for the two of us. So that was kind of my entry into the world of family business transitions.

Speaker B: Cool. So are we talking today primarily to business owners, would you say?

Speaker C: I would say it's, it's 50. 50. A transition typically requires two sides. Um, uh, most of what I'll share just knowing that many of the people listening are owners of the business. And if there's already great podcasts, the advice is the same. How to prepare your business, make sure it's ready, get yourself out of it. We can, we can talk about those things for owners. But also if you are considering passing to a family member, how do you prepare the next generation? How do you invite them in? Um, if you are that next generation, uh, the entitled word gets thrown around a lot in our space. How do you start a conversation about, um, what the future might look like if the owner is not moving, maybe at a pace that you feel would be appropriate and you want to just open that conversation. So really, uh, happy to speak to both sides of the table based on all the transitions that we've seen in our work.

Speaker B: Sure. Um, yeah, I mean I threw the word entitlement in there because it's something that I've uh, heard and been exposed to in the past with these kind of businesses that have been passed down. That said, I think um, overarching here, like the general consensus going back, you know, let's say five or six years ago was that trade businesses were very hard, if not impossible to offload, um, and sell. And I think now, especially of late, where we've had, you know, this model, um, of private equity moving over here into Australia, we've got Lighthouse that have bought up all these, you know, huge plumbing and um, home service businesses and things like that. Uh, the wheels are churning and people are thinking, oh wow, I actually do maybe have an asset here that can be, that can be handed off. And I think, um, very often, and I've seen like this work very well for a lot of businesses where they, a business does want to move, uh, the business owner does want to move on and they've got someone within the business that can take over, that knows the business, they know how it runs. They've been brought up in that environment, that ecosystem and they're the, they're the very obvious choice to, you know, sort of sell it to them and move on like that. I've seen that work very well.

Speaker C: Mhm. I think it's an underrated. Because a lot of times when you talk to a business owner, what are the things that you want to achieve in the transition? Sure. Everyone will talk about, well, I'd love to have enough money for the rest of my life. The type of exit I'd love to have is this. But you'll oftentimes hear, I love the work that I'm doing, I love the impact, I love my crew. There's all of these, these other things that are really important to you. And sometimes when you go the route of, of private equity, you're, you're giving up control of, of some of those things. Maybe you never want to be an employee for someone else and that is completely a deal breaker for you. But if private equity bought you, they need you to stay on for two years to keep running everything, like, is that a deal breaker? Would you consider that as an option in the transition? And so oftentimes when people work through all the options, you, you truly understand implications of, of different things in front of you. You can make better decisions around potential trade offs that you might have, uh, inside each decision that you're making.

Speaker B: The, um, the feedback that we get conceptually is uh, when business owners that are handing it down to some like somebody within their existing team that they know like and trust and essentially like a family, like their willingness to stay on is, you know, to sort of help them get the roots ingrained and you know, make sure that it's running well is far more likely than if they were just selling it to somebody that they don't, that they don't know through business sale for sure.

Speaker C: And that, that is I would say, the core of the work and the process that we do. Oftentimes owners come in, they think they're going to be able to make a transition like this, uh, in a year, maybe two. In my case, I'm actually the successor of Elizabeth, the woman who started our firm. We thought we were going to do a three year Runway and now it looks more like five years. So life happens, there's things to learn. Um, again, what are the things that you're handing off? What are the timelines, milestones, uh, different pieces that will pop up? Uh, we have this concept of transition 1.0 versus 3.0. So in the family space, family wealth, family business, there's this old idea that um, someone would go in a room with their lawyers and their CPAs and they'd write up their estate plan. And then when they pass away, everyone finds out was happening to the business. It kind of evolved a little bit into this transition 2.0. Um, now people get to find out before you're dead and you can help clarify and answer questions. But really our Premise is transition 3.0. How do you actually design? So if you're considering internal sale, um, or gifting, some, some parents will choose to gift their shares to their kids. How, however, you end up structuring that if you're considering passing it to someone inside of your business, how do you actually design that transition with them? And so you invite them to the table to sort of design it with you and that impacts when are we doing certain things? What are all of the jobs and the roles that you currently have? You can talk about different decision making levels, what are the roles you have in day to day operations versus board level decisions versus shareholder and owner decisions? And when are certain things going to happen and that will create the most confidence for the successor and the person coming up is when you can actually map all of those things out. And suddenly the entitlement conversation often leaves because now the successor knows and has a bigger picture and understanding of the things that will be expected of them to be able to move in and do this thing.

Speaker A: Quick pause for a second. If this episode's hitting home for you, do us a favor, please give it a follow on this app and if possible, please share it with someone that you think would also benefit this podcast was brought to you by Tradie Web Guys, where day in, day out, we work with tradies and contractors that are looking for predictable, manageable systems to close more jobs and scale with consistency.

Speaker B: It's a proven system that's focused on

Speaker A: closing more jobs, not just generating more leads. We have loads of case studies and

Speaker B: reviews on the website to back this up. If you want to go check it out.

Speaker A: The sound of predictable, manageable and consistent growth. Click on the link in the description or head to tradywebguys.com and start the conversation. All right, back to it.

Speaker B: I, um, have a cool story for you. So one of my good friends, Rob, he grew up, went to university with uh, one of the family members for the Faber Castell Group, which uh, for you guys that aren't familiar, they're the ones that do the pencils, right? They're out of um, Germany or France or something or other.

Speaker A: I can't remember.

Speaker B: Huge company, Massive, massive company. And basically the. It's a family run business to this day. However, for you to be able to work within that business and uh, eventually move through the hierarchy, you have to have certain, you have to have done certain things within your professional, professional career to even qualify for the right to have a seat at the table. And some of those things include you have to have run and built your own business successfully. Um, there's a number of different checkboxes there and I can't remember them off top of my head. But I thought it was a very interesting because essentially again, playing back to what I've seen is a lot of reasons why these businesses that get hand down to uh, children and children, children of children and that kind of thing, why they fail is because they've just never been like, you don't appreciate anything you've given. Essentially like if you don't earn it, you haven't been through the school of hard knocks and you haven't like earned those battle scars and the, you know, it's very, it's very easy to sort of just get complacent for m. Whatever reason. And so I thought that was a very interesting model because like, I mean I, I know I've had this conversation with you know, clients before and they're like, I wouldn't in a million years, I wouldn't hand my business to my son. Like he's an, is a disaster. There's just not sensible enough, like just too entitled, you know. And you see this, you know, as a parent, I'm sure you've probably, you know, had similar um, observations. But sometimes like giving, you can give your kids too much. Like they need to earn things, they need to actually strive and understand that there's, you know, there's process to this and there's, there's, you've got lessons to be learned along that journey.

Speaker C: Mhm. Yeah. That's an interesting story. So my podcast is called you'd Next Gen Friend. And I mostly only interview the successors. So the people who have come up through their family businesses, uh, it seems to be third and fourth generation companies where I'm most commonly seeing requirements on what it means or what it looks like to join the business. So those are the people sharing stories like their parents who were the first successors, the second generations, they're like, I was only ever promoted by my dad my entire career. I never had any worth outside of the business. So now the requirement is you have to go get a job and get promoted at least once outside of the business. Or like the example you gave of being entrepreneurial, like that was a quality that they found. Uh, other people, you have to qualify for an open role that the company has. We're not just going to create a role for you because your family, those are things that we'll commonly see more in third generation, fourth generation. Also typically the family trees tend to get a lot bigger. But if you're talking like you're the founder, you have children, are some of them going to come in? Are they not? I Often hear, well, my, my kids don't have any interest in this business at all. Um, sometimes you hear like, I don't think that they would be qualified or they'd be able to learn. And sometimes it's a question of, um, have you actually had a conversation with them? Do they understand what it would mean? Uh, depending on the size of the business and the lifestyle it might afford them, uh, what, like, is that something that they would be interested in and being a part of? Sometimes they're missing information to make a decision about what it might look like to come in or go. And the flip side of that, uh, we worked with a window company and, um, there were seven children working in the business. And dad thought that all seven wanted to stay and work. And the answer was that was not true at all. Some were doing it out of obligation or they felt forced or they felt like they had to be there. They didn't have a choice to not be there. And so how do you facilitate those conversations to make sure that everyone is happy and participatory and, and understanding what their role will really look like, uh, going forward?

Speaker B: It's funny. There's, um, one of my best mates growing up. His father was a, um, plumber in an area in Sydney. Um, myself and my buddy grew up, uh, went through the schooling system together. Uh, went through college together to study plumbing. Um, actually, and funnily enough, going back even to circa, let's say, man, like M. 1987 or something, you know, when I was a little tiny kid and I remember, you know, when you're in. When you're in. We call it kindergarten over here, but you write down what you want to be when you're older. But because I'd spent so much time with my friend and his dad, I'd written plumber. And so, uh, I kind of wish I had a friend whose dad was a doctor back then. But anyway, I used to go to jobs with him and, you know, we thought it was great. Anyway, long story short, my friend is one of, uh, one, two, one of four kids. Um, and the conversation around, well, who basically does the business get handed to at the end of the. You know, when. When his father retires was kind of, well, it's going to be split amongst you kids. And my friend, who is a very, very, very good plumber and his brother is also a very good plumber, they were like, well, this isn't really fair. Like, the other family members have nothing to do with it, nor have they had it. Why should they be getting it if we're the ones that are running the business. And as a result, um, they set up their own businesses and they didn't want anything to do with it.

Speaker C: Mhm.

Speaker B: And I thought that was very interesting.

Speaker C: Um, fairness and equality is, is really tricky because fair does not necessarily mean equal. Especially if some are actively working in the business. Some are not actively working in the business. But the parents, they built the business with this intention, right, that they were going to help all four kids. So how do you do that? Are things gifted? Could uh, the brothers buy? Like, could they have bought out shares for siblings to make sure that that money was moving? And what does that look like? And was there material benefit for them to do that versus going to siblings start their own companies? Um, and, and why would you do that? These are really important conversations for families to have. If, if one of the goals is let's keep the whole family together, like hopefully they still talk, they still get along, the siblings understand what's going on. Dad has no bad blood. Right. That other entities and companies were started and, and all the businesses were able to survive. Uh, on the flip side of that though, sometimes you see this kind of destroy, like no one wants to come together for holidays anymore. It's awkward sitting around the table. People aren't able to see their grandkids. So oftentimes those are really, really important objectives that we're trying to help the families sort through is how do we move through this together as a family? Because that might be the solution that they came up with at the end, that they should just spin off and go do their own things. Um, but potentially, and oftentimes there's solutions inside of it where maybe on paper it certainly doesn't look equal, but it is fair for how each person is participating, what their roles are. And we call that a separation of the family community and the family business community. You always get to stay apart of the family community, but the family, family business community has rules around how and when and in what level you get to participate. And potentially in that family, if you weren't a plumber, maybe you wouldn't get to participate in the family business community. And so really as the owner has control over saying what is a requirement, uh, of becoming a part of that family business community, but everyone gets to stay a part of the family.

Speaker B: It's funny actually, um, while we're talking about family and rules and things like that, it reminded me a couple of weeks ago I was, um, I was away with some friends and they, I mean, completely unrelated to the Trades, but they're um, they, their family owns a surf shop in a place on the, on the north, um, east coast of uh, New South Wales in Australia. And the father recently handed off the business down to the son to run and manage the business, uh, which was working great. He's doing a really good job there. However, when the father was running the business he had this rule and I don't know, I'm guessing it was just like a spit in the handshake kind of rule. But any external extended family member that came to the shop would get a 20% discount. And when, uh, this, my friend's um, brother took this business over, he basically said, no, we're not doing this anymore. And the reason was quite simple. Like we'd have all these, he'd have these family members that would rock up to the shop who he'd never even seen before. And he'd be like, what are the

Speaker A: names of my kids?

Speaker B: And they'd be like, no idea. And he goes, that's good. Then you're not really family so you're not getting a discount. And he basically took it off the table. But this rule that existed while the father was running the business for the whole time and when he took it over he's like, this is a stupid rule.

Speaker A: And I imagine that happens a lot. Right?

Speaker B: Like there must be a lot of sort of things that are just ingrained into the running of a business. It ain't broke, don't need fixing. Always been this way. Why change it? Like that kind of mentality. And someone comes in and goes, what, this is stupid.

Speaker C: Yeah. Also the tension of being a rising gen. So remember, this is me. I'm also in the process of being, buying the company from the owner. And so it's, it's this tension of like, well, things have always been done this way. Why have they always been done that way? Are there merits or a very good reason why it's been done that way? Or should I switch something up? Should I do something new? My experience, my background is different from the, the people who have, have come before me. So how do I infuse me into this business? Because I don't want to be a puppet, I don't want to run someone else's business in the way that they always ran it. Um, because that doesn't feel authentic to me. And there can be a lot of rub there, especially in the process of actually going through the transition, that two to four or five year period where you're actively handing things off, you're moving Equity. The owner is working on disentangling themselves and getting out of the day to day and doing all these other things. Like they reach this point where you're going to have to step back out of your active role and the successor is now going to supersede you in a decision making. And that can, there's a lot of tension uh, in that if it's not handled correctly, um, people can get really pissed off at each other and mad and angry and that's where things can sort of start to slide a little bit, slight sideways.

Speaker B: I can see how that would create animosity like with a family involvement. But truth be told, when a business is being acquired by another business, especially in the instance where they're buying a business that complements theirs and they're adding it into their business dynamic, that's pretty much the whole point of that acquisition. It's like how do we take this business, put our systems into place over here and our structure so that it runs more efficiently?

Speaker C: Mhm. Yeah. And every transition or acquisition or sale can be completely different on what the goal of it is. Um, if you were going to, in our work we see a lot of those internal transitions. So uh, I, I'm the founder of this business. I have two key employees that I think are, are going to be, they're the people that are going to buy this from me. Oh wait, the business is worth too much, they can't afford it. Maybe I'm going to do some owner financing, um, maybe I need to stay around for a little bit longer. And so you're working in close proximity with each other sometimes as the transition starts to unfold. It's certainly different in a third party sales situation where maybe you're just handing things off, um, and people are, are on their way, um, and kind of taking things over from you. Which has its own benefits and also its own uh, downsides. I think the statistic from the Exit planning institute was um, 70 or 75% of business owners will regret selling their business within the first year. And I would argue it's sometimes it's because it comes too fast or because you don't have something planned for after um, golf, going golfing, going surfing. Those are not like retirement plans. If someone comes to me and they're like, yeah, well I'm just gonna, I'm gonna hang out, I'm gonna, I'm gonna do this thing that's oftentimes it's the start of a recipe where you're like, uh, we're probably need to Figure out something else here because you need to take all the passion and purpose that you've been infusing into this business, into your team, and you're going to need something else to funnel that into, um, afterwards to feel like the transition or the sale was a success.

Speaker B: I think the concept of retirement has kind of shifted over. Well, I mean, maybe it's the circles that I move in, but even myself, I can't imagine not having waking up and having to do something like having some sort of purpose. And I think it's when you see people in our parents, generations and things like that that have, um, retired, inverted commas, and then all of a sudden, within 10 years, five years, they're dead because they just sit around and read newspapers all day. Like, what are you going to do? Um, you kind of need that drive.

Speaker A: But I mean, I guess you did

Speaker B: touch on something there. And I wonder if, I mean, there must without question be less emotional, uh, like conflict or ties when you're selling business to someone that isn't related to you.

Speaker C: Uh, oftentimes, uh, and it depends what's included in, in the sale, but it's possible your employees, people you've worked with for 10, 15, 20 years are, are going there and, and you hear things or you see things, or it doesn't exactly go the way that you intended or the timeline shifted a little bit longer or, um, at least when I watched my dad sell his business, it was like they did all these things. The most important things to him were company culture and, um, having the best customer service. And it was like, like, no, we no longer do that. We're maximizing for this thing and we're rolling it into the other software. And those have to be things that you're okay with, um, or that you can detach yourself from, uh, if you, if you give up control over that, um, not that an internal transition is, is perfect and, and things won't go out of control, but oftentimes, especially when it's family, uh, we'll see people like, okay, let's form a board. Like, maybe we're in a position that now we need a board and I'm going to stay on as chairman of the board, or you're going to have me stay in an, in an advisory capacity for some amount of time. Um, and then for many people, that's a really good fit for them. Right.

Speaker B: Okay. Um, so do you think, like, the majority of the issues, majority of the reasons that lead to 60% of these businesses or these transactions failing are, uh, alignment like structurally and like just having clear black and white. If this, then that sort of conversations.

Speaker C: Yeah. So if you think of an internal transition, um, 60% are likely to fail. Generation one to two and by the third generation, maybe 30% or even smaller will still, um, exist in some form or continuation of the first one. So it's a pretty abysmal rate for businesses successfully passing down. I think what it boils down to is communication, uh, how the generations talk to each other, people having clear expectations, uh, between what is happening in, in each, what is each person's role? One of the big tools that we have is called the transition compass. So why does everyone want to be a part of the transition that includes the owners and the successors? What exactly are the assets that we're transitioning here? When are we going to do that? Uh, who are the potential successors or the people that we want to take care of? Once you answer those four questions, it's easier to say, okay, well, how much money do I really need from this transition? And also, ah, how do I do it? How do I structure it? Is selling to a third party right for me is passing down, should I be gifting it? Should I not? Um, and I think really just stepping back and taking yourself away from just what is the tax implication or how do I get the highest valuation on this business to really what are the things I want to achieve or the legacy I want to leave? Uh, uh, with this, when you do some of that pre work, it sets you up for um, success when you actually walk into the transition itself.

Speaker A: So what do you, what do you

Speaker B: think maybe is some like just bullet points, stepping stones businesses should be doing in, in order for them to be, uh, preparing for these type of conversations.

Speaker C: Yeah. So the personal work that an owner can do, thinking about uh, their next adventure and what they see as life beyond the business or even just what are the fun things or objectives I want to achieve in my life and how does the business fit into that? Because sometimes staying and working in the business is a great supportive thing for them to do for a long time because they're having fun and they enjoy it. Um, um, so, so that would be one. If there is a generational transfer, how do you invite those people in to start to have a conversation and it doesn't have to be like someday you're going to own this business or I promise that I'm going to hand the business down to you, but I'm starting to think about what the future might look like and I'd love to explore what the future, um, or what the path might look like for both of us as we start to explore this. So opening that conversation, particularly with the next generation, early, um, that will help also with some of the role pieces. So my guess is the episode that you recorded that everyone should go listen to about how to make your business more sellable. It's talking about things like you have to work yourself out of a job, uh, you can't be the person, um, running and doing everything that's the same. And in an internal transition, you're going to work yourself, um, out of your role. Uh, if there are family members who are in or out, uh, how do you have conversations with them about what is happening, what's your intent, uh, for how that's going to pass down. So those would be a few things, um, that I would say that uh, would be stuff that you could start thinking about early, uh, before you're ready to actually do the transition itself.

Speaker B: Okay, and what sort of time frame do you typically see if you were to average out, like a transaction like this might normally take?

Speaker C: Yeah. So we've seen um, as short as year and a half, two years and as, as long as seven to ten. Um, and it could really depend on so many factors, things shifting, big, uh, accounts, moving in and moving out, uh, what the valuation of the business is, how prepared the successor is to take over the role, especially if it's family. And you're like, uh, my, my son is interested in taking over this business, but he's really missing. He doesn't know anything about the financials. He doesn't, he's never actually ran the crew. He's never done this, this, this, this, this. You're going to come up with this big long list of things that the person needs to learn and do and, and that can take time. And in some of the transitions we see that take three, four, five, six years. Um, as people work through the things that they need to learn and um, get mastery over before the, the current owner feels comfortable, uh, talking about actually transferring ownership to that person.

Speaker B: Yeah, sure. I guess the, um, in a way, the longer it takes, the better, right? To a degree. Like the more prepared, the more conversations that are happening between that time frame, it's less, it's less reactive. Uh, and on that note, I suppose there's also things that would pop up within life that would, would force people to like, move quicker on these things. Illness, marital status. Who knows, like one of many, lots of things.

Speaker C: I, I got pregnant twice in the middle of our, our transition. So, like, oh, well, let's delay it another year. Like, don't want to promise I can buy the rest of the business this year. Um, so, yeah, life can happen. People get sick, someone falls in love, they decide their, their, they're moving to Europe. Like, whatever it is. There are so many, uh, implications and things that can happen. We typically say, like, people ask what's the best time? Like, of course, as a, ah, transition advisor, I'm going to say do it as early as you can. Seven to ten years even before you are ready to transition. Um, can give you so much Runway. Because what you're doing is you're sort of identifying this point. So if you're like, oh, okay, um, I'm, I'm going to Asia from Australia. We're gonna go towards Asia, or I'm going towards the Americas. Those are two very different directions. So are we at least like setting sail in the correct direction? Um, uh, the general direction of where things are moving. And, um, we always say it's a roadmap, not a plan. A plan makes it sound so rigid, um, that there's only one way that things are going to go. But a roadmap sort of points you in a general direction and said, these are the things that you might want to talk about, things that might come up that we need to discuss. So as things like life show up, someone gets sick, uh, a key employee that you've had for a long time that you thought would be around decides that they're retiring early. Like, whatever, whatever those things are that come, you're able to pivot more easily. So there's lots of road trip analogies. Pick your favorite travel analogy inside of this. But okay, it's snowing. Let's take a minor detour. Um, it'll add three hours to our drive, but we'll be out of the snow, we'll be safe. Uh, everyone's happy on. We're still going towards that same general direction. Um, it's a, it's a really big gift. Um, especially if the people you're transitioning with are people that you care about on a deep level.

Speaker A: Andrea, I'm going to have links, uh,

Speaker B: to all of the website and, um, all of your social profiles and stuff like that within the show. Notes for you guys that are watching or listening to this, um, you can head across the siteshed.com and just search Andrea A N D R E A and this episode will pop up. However, um, with that in mind, who are the type of businesses that you would be wanting to talk To.

Speaker C: Yeah. So any business that's privately held, um, considering what transition options are, would be happy to talk with you to see if our process would be uh, a good fit for you. Uh, typically the type of people we see, they care about the people around them, they want to make good decisions. They need a little support and guidance, uh, along the way. Um, tax and estate and all of those pieces are equally important to transitions. And our team, especially for, for North America, um, can help connect you with, with CPAs and other things. But people are people whether you're Australian or whether you live in North America or whether you live in Europe. So the dynamics of the family. How do we talk about people? Uh, what, what are the. How do I bring my family together or, or start to think about what the next step are? Those are, are very universal things. Uh, and, and we'd be honored and happy to support, support, uh, families from, from any walk of life, uh, through, through our, our process called uh, the transition Roadmap.

Speaker B: So beautiful. Well, thank you for your time today. I hope that was useful for you guys out there. I know we've had these conversations and we see them pop up in the community all the time in relation to um, exits, acquisitions. And like I said earlier, we've all heard the horror stories about um, scenarios where this has not been done well. Um, so I think for you guys that are considering, you know, the future and you know, perhaps uh, like exit strategy and those types of things, um, you know, definitely like these are ah, these are considerations that you need to do, you need to have. And I think um, connecting with someone like you, Andre, would be super useful in making sure that you cross all the T's and dot all the I's and do things in the right order. So thank you for sharing, coming along and sharing some of your insights and wisdom with us.

Speaker C: Yeah, glad to be here. And I always uh, I like to say remember before the Buy sell, so before you think about getting to Buy Sell. So before buy sell.com is actually where we have like a quick 30 minute link if you're like. Because we know every business is so unique in every situation. So if you just want to take 15 or 30 minutes of your time to run through, these are the things I'm thinking about. What's the best next step for me. Um, you can find our team there and we'd be happy and um, to have a conversation with you about your specific situation.

Speaker B: Okay, fantastic. Um, again all the links and stuff will be in the show notes. So for you guys out there. If you want to, uh, reach out, then, um, I'll make that super easy for you. Andrea, thank you once again for your time.

Speaker A: And, uh, that is a wrap. I hope you enjoyed that podcast and I also hope that you have a plan in place to implement AI into your trade business. And I hope you have one soon because if you don't, you are going to get left behind. Head across to tradiehub.net and check out

Speaker B: the cool stuff that we're doing over

Speaker A: there with AI for trade based businesses

Speaker B: all over the world.

Speaker A: It is an absolute game changer. Go check it out.

Speaker B: Look forward to speaking to you soon.