The Art of Succession

welcome to the Art of Succession podcast

with Barrett Young Join us as we explore

the strategies stories and insights that

shape the journey of leadership

transitions and business success no

matter where you find yourself along the

journey This is the podcast where you'll

find the tools to make it happen Man

this internet thing is really cool and

it you know it makes so much sense for

people to be able to file court

paperwork online instead of having to

come stand in line and fill it all out

by hand So we had to do a lot of cleanup

and structure building to make the

company appealing to an acquirer And the

real money comes from rich relationships

with those customers knowing the nuance

of their particularities My name is

Barrett Young and this is the Art of

Succession podcast My guest today is

Nick Goff a CFP candidate and the

founder of Open-Handed Wealth For the

span of seven years Nick worked with his

dad at Court Solutions a payment

processing company primarily focused on

traffic court fines In 2017 they sold

that company to a consolidator And Nick

continued to work in the same role for

that company as it continued to acquire

before launching his company and

changing careers Nick welcome to the Art

of Succession Hey I'm thrilled to be

here Thanks so much for having me So I

want to start off with what's the

burning desire or what brings you to the

art of succession today what is it

specifically about business succession

that you want to share with with my

audience starting there's a reason that

that you know the business can be

referred to as the the baby of the owner

You know when you cradle something from

its infancy all the way to its uh you

know divevestature or all the way to its

success and you ride off into the sunset

and hand down to your kids there is an

unbelievable amount of of your soul

that's like poured into this company

It's an incredibly transitional pivotal

time in life when you are leaving it and

going onto a new chapter Uh I love uh

that exact space It's where I personally

walked It's where I watched my dad walk

and it's where I'll probably walk

someday soon as a eventually as a as a

business owner myself Great Awesome So

let's get into that story Your dad

started the company in 2000 and you came

along in

2010 It fill in the context a little bit

What do you mean by a payment processor

well so I'll even fill in some context

there So he started one company in 2000

Uh he was bought out for that company in

I think ' 07 started this one in ' 08

And so then I came to work for him in

2010 So this is the second time that he

was trying to start a very similar

business And I think that initial seven

years probably helped immensely I'm sure

to launch the business that he you know

eventually I worked for and that he sold

Yeah payment processor um was kind of a

newish term I guess back in 2010 but you

know if if you got a traffic ticket uh

there were basically uh no modern ways

to pay it uh where we were joined to to

serve and so you know we built a product

and my dad built a a website product

where you could go look up your traffic

ticket process a payment for it and the

court would get the money in you know a

day or two and that was pretty

disruptive technology ology to the uh

money order or certified check that was

uh required up to that point for for

paying any sort of government fine like

that to a pretty rural uh you part of

the country Gotcha Okay How did your dad

come about that i I didn't realize he

had started another company there but

was he a tech guy was he a web developer

like how what brought him to that no not

even close Okay Not even problem solver

He was an entrepreneur He's a problem

and he was such a problem solver which

would you know really uh gives me great

courage because you don't have to be a

web developer to start a tech company

who knew right even in 2010

uh somebody approached him in like the

late 90s with this idea that like man

this internet thing is really cool and

it you know it makes so much sense for

people to be able to file paperwork

paperwork online instead of having to

come stand in line you know and and fill

out you know fill it all out by hand Uh

but you know even then it was like we

have to have stuff notorized inside You

still have to do that So they but they

developed this kind of um you know

online paperwork processing management

platform Uh but it wasn't just filing

paperwork at that you know kind of

branched into other court related

services right and payments are a huge

one And so my dad spun off from there in

the I guess the late

2010s you know 0809 and started Core

Solutions uh to do traffic ticket

payments and really just zoomed in on

that slice And so it's still you have a

problem of like well if Nick speeds

through town gets a ticket and then he

wants to go pay it how does he look it

up so we had to have a data connection

with the the court you know case

software manager

u and then be able to present that on a

website where you could go and find

yourself without in theory just mining

it for all of the traffic tickets in our

database So you know that was still kind

of early stage of of that technology

trying to you know set that up in a way

where it was secure enough but also

still user friendly Gotcha Okay So then

I guess his first business it sounds

like he had a partner then that was the

tech side of it or the had that vision

and he just he came along He had a

partner that was the legal side Gotcha

And then he they kind of outsourced the

the tech side uh building a website and

you know setting up the connections and

integrations and all that My dad's a

salesman He's a phenomenal relational

you know go-getter problem solver kind

of guy

Mhm Gotcha Every business needs that He

was that you know the the integrator you

know following the like the EOS you know

traction kind of framework So he was the

visionary He needed the integrator And

so they hired this out and and it was a

beautiful thing Gotcha Okay I mean very

cutting edge starting this company doing

this kind of actual work on the internet

in 2000 Um I'm thinking back to

209798 Uh eBay is the biggest

marketplace on the internet PayPal just

starts to facilitate that Um and here

your dad and and his partner come along

and they're like "Well we're going to

allow you to pay traffic courts and look

up actual court cases and look up the

fines associated with them on the

internet." So kudos to your dad

Definitely saw the vision there of what

was possible Um what kind of I mean you

came along 10 years later what kind of

problems did they have to solve for what

kind of things did they get into that

they they didn't realize going into it

uh that they came up with solutions for

to make this successful

i think probably one of the the biggest

hurdles right out of the gate is

building trust because if you just pick

up the phone and call a government

office you're like "Hey I have a way for

people to pay

you." I mean imagine doing that now

right much less 15 years

ago Um building

trust with the you know the the the

public sector is very difficult It's a

very very long sales cycle Um I also you

know there were some other issues of

just growth Growth is very very slow and

stubborn uh because you have to sign on

individual

accounts and the real money comes from

rich relationships with those customers

knowing the nuance of their particular

well their particularities um yeah every

every county is going to have different

things that they need and yes got to be

customized to their solution well I'll

give you a fun a fun example here and

this is where I I love this idea of like

become an expert on your customer's

problems and be really good at solving

them You can call it whatever you want

You can call it tax prep you can call it

financial planning you can call it you

know payment processing but if you can

be really really good at solving a

painoint they have they'll love you

forever And who why why wouldn't they so

we had a problem uh a couple of problems

where you get a ticket uh you want to

pay immediately and you pick up the

phone because you see a phone number on

the back of the ticket So you pick up

your cell phone right

luckily it was past car phones but like

you know you pick up your phone you call

in and it's like "Hey can I pay this?"

Like "Okay yeah sure When did you get

it?" Well seven minutes ago Okay It's

not going to be available for payment

until maybe a week or two because it

just takes that long when you're dealing

with carbon copied you know tickets

Nowadays like the e- ticketing systems

are literally instant Uh but you know

that that's modern technology even now

that isn't fully integrated across the

country right so uh we built a little a

matching system where we could just take

your information and ceue it up and save

that And then as we were getting in new

data it would say like "Oh this here's

Barrett's last name date of birth and

you know his citation number and it

matches." And send you an email like

"Hey we think we found your ticket You

can click here to pay it." And that was

a way

of you know following up with you

keeping current with you reminding you

to pay your ticket because let's be

honest life happens and we forget Um and

then also capturing that revenue for the

court So we saw some really really good

results from from that system And

another one was like again like you said

these different jurisdictions had

different particularities of like well

they do it this way they do it that way

You know if you get a ticket for no

driver's license but you do have a

license It's just sitting in your wallet

You forgot at home Typically you can get

that reduced to like a $20 admin fee and

you're done But you have to get a copy

of it to the court which back then it

was like

faxing you know And so we developed a

system where they could like you know

snap a picture with their phone email it

to us We would take the record and then

eax it to the court We would then we

could actually they there were some

customers or some clients that even let

us do the verification for the clerk to

say like "Yes this matches the person's

name date of birth our records that

we're looking at from your database you

know Mr Mr Courthouse." Uh we'll match

it for you reduce it process the payment

on the phone right then send you all

that you need to to keep your record So

it was like we really integrated

ourselves deeply with our customers to

solve their problems to make their lives

easier and they loved us for it Yeah

It's interesting because you really were

serving two types of customers You had

the customer you were actually

collecting revenue from which was the

court

system but the user of your platform was

not the court system They just want to

get paid They don't want to get phone

calls and and they don't want to get

phone calls from people that are

frustrated You want to make sure that

the user that's actually using it not

somebody coming in on a monthly basis or

anything like that but just a one-time

thing has a good enough experience that

they don't just say "I'm just going to

write a check This is stupid." So how

did how were you getting feedback on

that platform at the time because you

your direct customer is the court they

don't know they don't use it Um how are

you getting direct feedback from from

the secondary customer back then uh

that's a great question I actually don't

know if I have a great answer for that

but I think what you just did is you

identified the the first real problem

which is the customer I have to sell

isn't the customer who's going to pay me

anything and I have to It's kind of like

in pharmaceuticals how like a farm rep

has a pharma rep has to like get the

doctor to prescribe the medicine and

then get the person to go and fill the

prescription So we we had to kind of

navigate that sales process

Um what we found is that if we could

make the if we could serve the court

clerk well and if we could really make

his or her life easier reduce phone

calls integrate well learn their systems

and we had we were really nice We had

really nice people working with us We

were just kind you know and when you

treat someone with kindness and who

usually gets griped at at the on the

phone all day and cussed at and screamed

at and you know like they pick up the

phone and call the clerk and rip him a

new one because the officer you know

well he pulled me over and it's like you

you hear like the the worst stories So

if we were just nice and if we could

make their life easier and take those

phone calls off of them they would push

people to us They would change their

voicemail and be like "Hey if you're

calling to pay a ticket call them." you

know they would put our number and

website on this on this ticket you know

so when you're holding it you can see

our so like it it was a and then we had

to make the the user experience very

clean very distraction-free very simple

you know so you when you go it's kind of

like if you went to Google in like the

you know early 2000s you're like "What

is this it's just like a white page with

a box What do I do with this?" It's so

easy All I have to do is search

Ask G's was where it was at you know you

go and it's like "Hey I'm Jebs What do

you want to learn about here's all your

filters." And like it was Jeez did a

good job of explaining what you're

supposed to do with it Google was just

like kind of like Apple is now where

it's just like "Yeah we made a product

and you had to figure it out you

know?" But we had to make a product that

was so simple that you could you know

you could you could do it with no

questions And making that as

frictionless as

possible helped helped a lot Hey there

We're coming up on the end of season two

of the artist succession and July brings

our one-year anniversary of the show as

well I hope that you've enjoyed the

changes that I implemented in season 2

I've gotten some really good data from

the algorithm just to see how people

have been responding to that For season

3 I've got some other ideas but I really

want to connect with you as a listener

So down in the description below you'll

find a link to my calendar I've got

space for five listeners who are

available to book a 5 to 10 minute Zoom

call with me I really just want to talk

with you meet you and find out what

brings you to the Art of Succession when

you listen to the show and what you

enjoy about it as I look to season 3 and

beyond of the show If you don't have the

time to book that I understand I also

have a Google form down there that you

can fill out and just leave your

feedback for the show as well I want to

thank you for being with me on this

journey so far I'm looking forward to

the season 3 launch and the new guests

that I'm going to be bringing to you And

let's get back to that episode Before

the show you talked about your brother

also joined the company So you joined in

2010 Did your brother join at the same

time what brought you guys to dad's

company at that time What was the role

and what was the you know what were you

solving for the company yeah you know

for me I think I came in because my dad

was willing to pay me more than Publix

to buy groceries

and I would rather work for my dad than

work back in groceries uh through high

school Okay So 2010 it was it was the

part-time job kind of thing It was a

part-time job for me and it became

full-time and you know I wanted to be

involved in the family business You know

that that was cool to me It wasn't um

you know I never really grew up aspiring

to work in an office and sit at a desk

you know behind a computer I don't know

many people that really dream of that

but um it was it was neat and it was fun

to be involved in business and I took an

interest in it when I was you know

especially getting college I majored in

finance So I I eventually took on the

role of the financial manager for the

for the company making sure that our you

know reports were tidy that the

accountant and tax repairer had what

they needed that their questions were

answered that there was a strategy and

just you know somebody keeping a a a you

know a finger on the pulse so to speak

of the numbers of the business besides

just the this classic entrepreneur like

bank balance accounting like I have

money in the bank I'm good you

My brother came on almost the same time

actually as the operations director So

my brother's brilliant He's uh he's an

incredibly talented software architect

and engineers completely self-taught He

majored in political science He's

absolutely brilliant Probably reads a

book a day Um he's he's just one of

those guys So when he came in he he

started not even with a whole lot of

business experience but just kind of an

understanding of systems and processes

and how things should be built And he

was so good at

taking my dad's hairrained ideas that he

would scribble out on a whiteboard and

turning it

into an

actual Okay I think I see what you're

trying to do And it's going to look like

this And to get here we need to back way

up here and start slowly and building

toward

this which was such an important I mean

talk about an integrated role like that

was such an important

piece for my dad to have that person

um who who could help you know bring

that clarity and that structure Yeah

Okay So it sounds like this is an older

brother who had already who was already

ready to start his adult professional

life and you guys were brought the

integrator in-house at this point

whereas before it would have been

contractors and and in this company now

that your dad spun off in 2007 Your

brother came in as the integrator to

your dad's visionary Yeah Yeah Very much

so He's an older brother Yeah So he's

four years older than me and

uh you know I'm lucky to have gotten to

work with him Awesome So what did I mean

what was the vision at that time in 2010

for the company i mean I know your dad's

just thrilled to have his two his two

boys working with them and you're kind

of new not sure what you want to do but

I mean where did what was the vision for

the company for that almost 10 years

that you guys were working in there i

mean bear I don't know if there was much

of a vision Okay You know and that's

kind of what's funny is like you know I

think my dad's vision was make money

provide for the family build a business

Okay So is that not a good enough vision

you know like that was kind of his Yeah

No but his visionary

days that caused him to launch an

internet company in 2000 had kind of

just settled a little bit maybe or you

saw the end in sight Let's say that may

maybe I I discounted that question too

much When you say a vision let let me

put it this way I guess the vision was

um you know we want to we want to be the

payment processor for traffic

courts and you know that was kind of

just driving you know I guess it was

broad that it was probably that about

that broad uh when I say vision now I

think differently um having read the

books that we have in the last 15 years

and you know all the the the content and

podcasts around vision and mission and

values stuff like that you know I think

of Chick-fil-A I think of Apple I think

of these big companies that are are

vision driven we weren't one of those we

just were like world changing kind of

yeah we just built a you know my dad

kind of built a business and it was it

was you know let's let's get this off

the ground let's take care of customers

and you know let's let's make that court

clerk's life easier here by taking those

angry phone callers away and processing

payments Yeah Um I mean a much more

localized vision but still a vision for

a small business I mean what was the

size of the company when you and your

brother joined how many how many people

were on the team uh single digits Yeah

Low single

digits When when we finally sold and

when he sold it let's say we when he

sold it in

2017 I think we're up to like 14 or 15

employees So still very much a small

family style feel business Um

And customer-wise I mean how many

payments like talk to me about growth

during that that led up to the

acquisition

um just what was what was the what was

the

attractive value proposition here for an

acquirer yeah you know integrated

payments Uh what I mean by that is is

payments that are relational

relationship based

um very sticky you know like I said we

deeply integrated with our customers we

we knew their problems well we solved

them and um you know we had good strong

cash flows for it you know we had double

digit growth several several years in a

row and um as long as we continue to

very rarely do we lose a

customer you know and the the margins

were great you you know I mean we would

charge a a percent processing fee which

you know would cover our integration and

development time and costs and call

center and you know there was still um

enough meat left on the bone for you

know for an odor to to find appeal in

Yeah I was going to say the sales cycle

might be longer when you're dealing with

those kind of entities but you bring on

a court in 2000 2001 it's probably still

using the same system Unless you don't

screw something up it's like no we made

our innovative decision We're going to

stick with it for the next 30 years just

about Now I'll say you there's it's very

hard to actually vet the the at least it

was It's probably much much easier now

with the amount of data out there But

man trying to vet the potential revenue

of a of a court uh was extremely

difficult Um some of our highest revenue

courts were these tiny little towns that

you never heard of that are Yeah

basically speed I mean some of them but

like you know they had a little slice of

the

freeway and you know and then other

other clients we thought would be really

significant never bought

in and so we got a tiny percent of

their you know their gross traffic

ticket volume and as a result because

they didn't really they didn't really

see the vision right it wasn't that

appealing to them Um they weren't

putting your number on the tickets They

weren't saying all payments must go

through here They're like "If you want

to come in and pay in person we'll still

take that check." All that kind of stuff

Yeah And we had we had clients that

would uh take payments over the phone at

their office on their own credit card

processor And it's like well why'd you

why' you you know after using your

system

after using your system to look it up on

the web I'm going to call and process it

there Yeah Yeah Well because the court

wouldn't charge you a service fee like

we would

And so sometimes the court clerk would

be like "Well I don't want you know I

don't like that they're having to pay an

extra $15 or whatever." It's like "Well

that's fair but you know you could have

been doing something else instead of

taking that phone call." Um we'll get

into the acquisition here in a in a

minute

What talk about your dad just

approaching retirement starting to look

at his two boys working in the company

your older brother running the company

uh very much so in the

day-to-day Share with me just a little

bit of the conversations that were

happening before 2017

Yeah So you know at one point my dad did

approach my brother and I and kind of

just threw out

like if we wanted to take over the

company he was open to that uh that

conversation you know and my brother and

I kind of we talked about it a few times

and just kind of agreed that it it it

wasn't going to work out for us Um you

know my dad wanted needed to be able to

just have kind of a clean break and go

retire And to do that we would either

have to just come up with the money to

buy him out um or borrow it And we

didn't we didn't have it We didn't want

to borrow it And we didn't really want

him on like a you know a three fiveyear

sort of payment plan uh being bought out

slowly And the other thing too is we

kind of saw there was some upcoming like

legislative tension about online

payments and again the sales cycle so

long Neither my brother and I are really

salespeople So we didn't really want all

of that involved Um and so you know my

dad started looking for an acquirer

probably in I don't know 2014 15 even uh

but struggled because

of I mean a number of reasons you know

for instance you know the the whole

business was built on

handshakes you know we didn't actually

have contracts we didn't have we didn't

have like letters of understanding terms

and conditions like I mean we didn't

have any of that stuff uh you know 15 10

15 years ago know and so it wasn't very

attractive to an acquirer to come and be

like look you have good cash flow but it

could literally disappear tomorrow

because there's nothing you know it just

felt like a big liability a big risk so

we had to do a lot of cleanup and

structure building to make the company

appealing to an acquirer and it was fun

and it really was you know getting HR

structures and policies and procedures

and agreements and all that kind of

stuff Well I mean how did your dad when

he when he was still in the talks with

you guys how did your get dad come to a

value for the business or was it just

like you being a financial

guy looking and saying realistically dad

you need this type of a number in order

to be able to retire fully from this

point was there a valuation done or was

it just very much more like we need to

take care of dad and we can't do that

with the cash we have right now i don't

think it was really either um the

typical small business world right where

it was like he kind of had a number in

mind of what he wanted and it wasn't

really based on valuation or metrics I

think it was

just I don't know if it was just like a

big number This is my dream He just had

a number in mind and it was not crazy

high but it was high and we were like I

mean dad we want to take care of you

absolutely but like you

know I don't think we can quite do that

um evaluation would have been

interesting And now as a financial

planner I I

see Oh man I mean the the stress of this

is part of why I got into the career

shift that I got into because I saw

firsthand the stress of an entrepreneur

who spent 15 years building two

businesses and was betting everything on

the sale You know my dad had very little

life savings to this point that I knew

of at least And you know he was not

independently wealthy In fact he grew up

rel in relative

poverty And you know in many ways like

his story is

is the American

dream You know he's the

the son of immigrants or grandson I

guess of immigrants I think it was my

grandfather that came over from Italy as

a as a kid with his parents I guess he

my dad was the grandson of immigrants Uh

but you know like first name born Yeah

his dad was a barber you know who who

worked until his last day of life And um

you know so for my dad to have this

dream of retirement and being able to

live out his days with my mom together

enjoying life was was really important

to him But you know he had poured

everything back into the company

um or spent it on his family And you

know it doesn't take a lot right and I

mean 10 15% savings over 30 years will

do wonders You know everybody can live

on 10% less Um and uh but he you he

didn't do that Nobody was there to help

him and coach him to that And so there

was a ton of pressure a ton of stress on

I've got to sell this company for the

number that will afford me the

retirement that I've always dreamed of

Let's talk about the acquisition uh

first

So my understanding is this is a company

that had started to acquire similar a

consolidator They were acquiring other

payment small little payment processors

around the country at this point Is that

correct that's correct Okay So

what did did your dad get the number he

wanted from that that was in his head or

did you guys realize it's not going to

be that and and he's going to have to

get it lower you said you did some prep

work to get it up to that number Talk

through talk through a little bit on

that for me

Yeah So this was the fun part Uh

honestly you know so the first um gosh

the first real offer that we got this

company I forget even where they were

maybe New York or something they they

reached out to us and asked basically

the terms of their purchase was like

"We're going to individually buy your

customers and any customers that don't

come over fall off completely you can't

have them neither can

we And at the end you know we'll just

set a like a I don't know a two or 3x of

revenue per customer or whatever the

number was We'll just buy your customers

a trailing 12-month revenue or you know

times some multiple we'll just pick them

off one at a time It was like that

sounds horrible Oh my gosh And if I if I

lose my biggest customer like we're all

hosed Would Would would they have been

Sorry uh would they have been changing

the system at that point then or were

they looking to acquire and just move in

seamlessly it sounds like they would

want to buy the customers So the

customers have to migrate to their new

platform Make it very difficult make it

so that most of them don't want to stay

and then not pay for the ones that left

So yep I got you It was it was terrible

So we said a quick note to that but that

was really discouraging because you know

when you're looking for an acquirer and

you finally get somebody on the phone

and they're like "Yeah we want to buy

your company." You're like "What oh this

is awesome Cool Okay let's talk And they

talk and they outline the worst plan

ever And you're s kind of sitting there

like with your eyes blinking like I

can't I can't imagine trying to do this

but I'm nervous to turn it down Feels

like your life's kind of hanging in the

balance And then if you have the guts to

say no now you have to wait out however

long until the next buyer hears about

you and bites which could be a week a

month a year and you just have to keep

trucking with your business uh hoping

that day comes So that was that's tough

Uh and my heart goes out to any

entrepreneur any business owner in that

position because I know the just the

pain of just waiting and waiting So

anyway mid 2017

um we get another call Uh this is a

really solid company We'd be acquisition

number 20 Um they had plans to go

public and uh yeah they had done this

many times over and they were quick and

efficient knew exactly what they wanted

They threw out a number uh with a payout

and I think the combined total kind of

got my dad to that number he was hoping

for which is really really cool So it

was a

win-winwin Uh you know we started having

meetings started doing due diligence

signed NDAs and it closed by uh I think

it was December 1st So it's about four

months

And they did acquire the company then

and the existing systems and you came

over with the job and they bought

everything and everyone and they said

you know we don't we're not buying you

to gut you Uh we we buy successful

companies and try to help them do better

And they were very kind very they're

great folks Great folks They made our

team all the way down And it was true

They didn't you know they didn't buy us

and and fire half the They didn't fire

anybody Uh in fact they you know they

really helped to update some systems

that needed updating and to move us to

their processing platform that saved us

a ton of money uh because they had way

better rates than we did because the

volume was you know 100 times higher And

so it was it was cool I learned a ton uh

from those folks and getting to be there

Yeah So you stayed there for another six

seven years Part of that probably is

your mindset is shifting and saying I

don't know that I want to do this for

another 30 But what was it about being

part of this new company what does it

feel like to be on the acquired side uh

and the consolidated side that that drew

you to it um for as long as it did

well so it at first it felt scary I mean

I had plans to leave I think in the

first six

months

Um because you know you can say "Oh

we're gonna we're gonna buy you and keep

everybody We don't want to let anybody

go." You can say that all day but as

soon as you own it it's up to you and

you can do whatever you want So I I was

nervous for probably the first year like

waiting for the other shoe to drop Um

once that kind of went away and I

realized my job was not about to be

taken from me

um you know I I saw it as a really neat

opportunity to grow in a corporate

environment that I'd never been in

Um you

know there's so many stories of people

that make it to a corporate environment

hate it and and leave Um I wanted to try

it out And so

um it was fun It was It really was It

was neat for a while

Um I will say I came in to my dad's

business with the goal

of you know find working in the family

business making better money but

ultimately I knew I wanted to help my

dad into a retirement position I had

been interested in personal finance and

investments since you know high school

uh and had really taken I wanted to

pursue the CFP In fact I started

pursuing the CFA charter after college

while working for my dad planning my

next career move before he was ever even

thinking of selling the business So it's

kind of always been in my mind of like I

wanted to get into financial planning

and investments uh the the family

business and the trajectory of the last

14 years of my life really were a

different path that I just was on I mean

it's just where where God had me

Um so

postacquisition you know I'm waiting for

the other three to drop and kind of

planning my exit and I just ended up I

just kind of kept postponing it every

year for like seven years What were you

I mean how were you growing talk to me

about that going from a company of 14 15

people to a corporate environment What

specifically

uh just skillwise relationship-wise what

were you focused on that kept you

engaged for as long as it did knowing

probably by this point I am going to

launch I just don't know when Yeah You

know I'd say a couple things First off

it's a lot of fun to present to people

that you're not related to and to

actually get to like pitch an idea or

share a a business update or talk

through a financial report with somebody

that doesn't show your last name It's a

lot of fun Um it's a good kind of

pressure and stress to be like you know

make sure your your buttons are done and

and go up and and know your stuff So

there's a pride that comes from the

polish of a corporate environment that I

think is really is really good Uh I'll

also say I did have opportunities to

just rub elbows with people who were

smarter than me older than me better

than me more experienced than me Uh and

that was always fun too So it was it was

neat to meet the the folks and just see

like how the real pros do it of you know

project management IT marketing um

business like big like high level

business structure uh planning and cash

flow forecasting and and all that So I

didn't have too many in the room

meetings but I had a few uh and really

did enjoy them And then like when COVID

hit um and a lot of you know my

day-to-day responsibilities and projects

and everything kind of went on hold I

don't like being bored So um I had been

waiting for a good time to start

learning Microsoft PowerBI because I was

doing reporting and analytics for years

at this point And I had built this huge

big spreadsheet that was just a chaotic

mess to everybody but me I knew it like

the back of my hand Uh but I needed a

much better way of of of doing all that

right of doing the data management and

the projecting and you know so anyway I

I knew that I needed to learn R or

Python or something to like but I hate

coding you know I didn't want to do that

So PowerBI was a really cool opportunity

to learn how to do data analytics and

dashboarding and report management for

you know a large entity a large

organization with lots of data Um and so

I dove in head first and within about 3

4 months uh I had learned the platform

built two three reports showed them to

my boss and he you he was floored showed

them to his boss before you know it I

was I was tasked with doing like you

know data management and reporting for

you the whole sector of like 12

companies which was extremely difficult

because nobody had data as good as we

did at Core Solutions and our sister

company Um nobody had data like us So

trying to get a report that looked as

good as the one I made for us for them

was it was awful Uh but you know it

taught me a lot about uh projects

managing people and you know following

up with them because they don't really

care about doing what you ask unless

their boss tells them to I mean it's a

good challenge Anybody can make a report

with beautiful data but real world is

you're gonna have to make that not

anybody

It's it's easier to make a good report

with beautiful data but the real world

is clients are going to bring you the

worst data and can you still make sense

of it and turn it around so yeah And I

know you know not to put words in your

mouth but I know you've got four kids

and almost five kids under the age of 10

also So there had to be some of that

just it's nice to be able to shut this

off at the end of the day I know when I

went back to being an employee in 2017 I

went from working for myself from home

in my pajamas for clients that were

remote to suit and tie or shirt and tie

commute um you know clock in clock out

all that kind of stuff But I was in such

a place at that time that I needed that

ability to just shut it off and walk

away from it at the end of the day Okay

So was that also part of it for you at

that time with babies being born yes I

mean in 2017 we had one we had our

second in 18 and then 20 22 and 25 So

you know it it's been a crazy seven

years no doubt Um 8 nine years

But I will you know I don't know being

in a family

business I don't know if there is

like shut it off and and leave because

as long as your parent or your brother

or your uncle or whatever is is the

owner you kind of always think like well

if something happened to him it's coming

to me So you can't you can't always just

shut it off Um I was an employee I will

say postacquisition that that definitely

changed Um and then even pre-acquisition

in like 2015 for a very short stint I

was an employee in a small family

business uh a different business So I I

left my dad's company uh trying to make

a bit of a career move into more of a

financial position um at another local

family business and it was very very

difficult Um you know the but being a fa

being a

non family employee in a family business

I saw that side of it too and grew a lot

of empathy for the people in my dad's

company that didn't have our last name

You know because they came to work every

day for the family Yeah I don't know So

just it's a whole different kind of

dynamic But yeah postacquisition being

able to just Yeah turn it off and go be

dad and be a husband and be Nick and it

that was very very

helpful So a lot of people go back to

being an employees and they enjoy the

life They enjoy maybe the increased pay

They enjoy shutting it off They enjoy

the the glamour that comes from being

part of a corporation again or a bigger

company again What caused you to start

to shift i mean I know you always wanted

to do financial planning but what what's

shifting in your mind and how are you

surveying the times

and why what caused you to go out and be

uh self-employed again oh man I mean I'

I'd say in in many ways it's the stories

of people who' done

it always appealed to me a lot the

founder e or mythos of like the me

against the world kind of thing I don't

know I mean just the you know more the

like XYN

radio the interviews with other

financial adviserss who are helping

clients

uh doing good

work making good money and enjoying a

lifestyle

practice You know that was it It was

them maybe in an assistant Maybe they

had two or three employees a little

boutique firm but they were making good

money They're serving clients doing work

they love and they're working 25 hours a

week It's like hey that sounds pretty

nice You know I would be fine to do that

and to be able to devote my time to to

helping people navigate something that's

typically incredibly stressful money

Yeah Um I know you've shared watching

your dad do it kind of wrong Um I mean

nothing against your dad but just the

the American dream of work until you die

and then oh wow there's nothing here for

me to live out my last couple years How

much of that is in the back of your head

because I know that's a big part of what

you want to focus on now with your

financial planning firm How much is that

are you remembering those conversations

how much of that is remembering this

deal uh motivating you yeah I mean I

don't know if I'll ever really grow past

the first 1015 years of my career Um so

it it's yeah it's a huge part of the

story I you know I'll share a quick

story about

um you know this is why I got into the

business because I watched this happen

Uh so it was 2015 I guess 16 somewhere

pre-acquisition you know even before he

was planning on really selling uh the

the business had grown the cash flow was

strong and it was it was probably the

best few years my dad had ever had in

his life Um and we were approached by a

financial adviser a financial planner a

fee only guy who's a friend of mine from

from church at the time And he said "Hey

you know have you ever considered like a

retirement plan like a 401k or something

for your dad's business?" And at that

time I'm thinking like 401k I didn't

really know what a 401k was but I knew

it was like something more for like a

big company I was like I don't really

know And he said "Let's just talk I I'm

glad to just draw up a proposal let you

look at it answer any questions you

have." Well he probably didn't realize

what he was getting into because I can

come up with a lot of questions And so

many conversations and phone calls later

uh I presented this to my dad the CPA

our accountant and I think uh our our

somebody else But anyway I I just

presented this idea and I was like "Hey

I think this could be a really great way

for us to save money." Now the plan was

predicated on my dad maxing out his uh

maxing out his you know his his limit

right his his annual auditions limit of

I think at the time was like 60 5,000

something Now it's like 70 or whatever

But um that or 59 whatever it was that

the point was he was over 59 and a half

or over over 55 rather for over 50 for

ketchup I'm getting confused Point being

he could sock away a lot of money and

that was the huge lynch pin for the

whole plan to make sense The owner gets

to put a lot of money away All the

employees get a benefit And here's the

global tax savings Mr or Mrs client

instead of writing a check to Uncle Sam

for this amount you're going to write a

check to you your employees and you know

your your team And doesn't that sound

better so the problem

was it was not implemented fully because

he never actually contributed anything

to the plan because he just didn't know

what he had to do He thought somebody

else was handling it I guess the adviser

thought I was handling it I thought the

accountant was handling it No the ball

totally dropped And so instead all he

did was just give money to his employees

and you know match and struck a nice big

check for the setup fee and all like it

was still great It was great for all the

employees Everybody loved it It was

great for morale and retention and all

that but it didn't deliver the benefit

it was supposed to to the owner and

because of that I mean the whole case

for the plan kind of ended up falling

apart and nobody really caught it So it

just sort of you know it happened and

and it was just a part of you know a

part of the process that I don't think

anybody ever really caught until I just

caught it a few months ago even I

reached out to my dad I was like "Hey

did you

ever recently after I literally just

caught it?" Cuz I asked him I was like

"Do you do you remember this?" He's like

"Yeah." I said "Did you ever roll that

over?" He's like "I never did." Like I

never put anything in Like you never put

anything in Like Dad the whole plan was

for you

to sterning years to maximize this thing

Yeah

So that's part of the story I carry with

me all the time Little little examples

like that I got I got 50 of those

examples Barrett that I can give you of

just like if somebody had been there

with a financial planning mindset to say

"Hey um you know Mr Graph let's just

make this one or two small changes so

you have a bit more of a plan a little

bit better of a structure." Um you know

something else we talked about before

the show bear it was like the post sale

income gap problem for entrepreneurs

right so you're you're company's making

5 million you're taking home 500,000 Uh

you're going to sell it for like you

know whatever 4x IBIDA and so you're

going to sell it for for two or three

million and now you're going to have you

know 80 or 120 grand a year in 4%

income What are you going to do because

you just took a 70% pay cut from your

500 grand a year income down to

120 What are you going to do like you're

going to go start another company You

going to work at Walmart you like you

know shoring up that gap with a decade

and a half of of 15% savings can do a

whole

lot But it takes planning in your 30s

40s 50s so that when you're in your 50s

60s and 70s you don't run into that

problem like so many other people do

Yeah I know And you're in this to

prevent other people from doing this So

you know hindsight's 2020 but I also

would think the number that your dad had

in mind when he approached you and your

brother would have been a lower number

also had he been able to put money into

retirement uh outside of the company So

this is why you do what you do in

financial planning why you work with

small businesses So talk now to somebody

who is a seller who's listening to this

who thinks that their payday is an

external acquisition or even an internal

acquisition and just talk to them about

the both and uh approach for a minute

Well one thing we didn't even mention is

is the deal tax right and this isn't a

tax conversation I'm not a tax expert

but you are

Uh the deal tax is a real problem

because if you're going to have someone

in your company buy you out you're

having to pay them wages that they're

paying taxes on that they're then going

to turn around and pay you that you're

going to pay tax on to then give them

the business

Um I mean I've seen figures that the the

total deal tax can be as high as like

50%

even higher Um and you can you know do

some discounts and stuff like that But

like working with an adviser is not just

paying somebody $20,000 down the drain

for some you know PDF document It's

working with somebody that could save

you hundreds of thousands of

dollars may maybe more Uh I mean if your

if your business is doing a few million

dollars in revenue and you're hoping to

sell it for a few million dollars then

your tax implication could be a million

dollars If your business is doing 10 or

20 or $50 million you can just add zeros

to those numbers So

like and I'll I'll we'll probably

mention this in a second but like I I

see a lot of times that

uh there's this reluctance to bring in

outside advisors because we have an

aversion to being sold Um we think

especially like when you think taxes you

think advisor sort of relationship You

don't think well my CPA is trying to

sell me something When you think CFP

when you think financial advisor you

think oh you're trying to sell me a

shares or some investment or something

like that that you know you're gonna

make a commission on some insurance

policy It's just a life insurance play

isn't it like no not at all Like my job

is you know to look out for you and to

make sure that a deal is structured in

such a way that you're not just leaving

loads of money on the table and that

you're not also banking on that one

number coming from an acquirer

Because well you mentioned this but if

if my dad had had you know a a

significant retirement savings cushion

already sucked away from the last 20

years of savings the stress of the

process would have been way less The

requirement of a certain number would

have been much softer Not to say that he

shouldn't have still pushed for a good

sale number but it his whole life

wouldn't have been riding on it right um

and you know if I talk about this a lot

too of like you don't know what the

economy is going to be like or what the

interest rate environment is going to be

like or what your health is going to be

like or what your family dynamic or your

business or your biggest customer

relationship is going to be like

tomorrow next quarter next decade So if

you're planning on just building up a

company and then just selling it because

everything is always going up and to the

right that may not be the case You may

have a really hard economy year the year

before you want to sell So your profits

may dip 25% and then you're taking the

haircut because you planned on selling

it right after a down year and the

acquirer is like "Well your sales just

went down 20%." So you know there's so

many factors in selling a business that

have to go just right for it to go just

right And as many as we can uh reduce

the pressure on with just some simple

common sense planning moves uh I mean

that's that's what I like to do I like

to keep things simple It's not about

making it complicated Uh it's just about

simple common sense steps toward you

know removing some of the complexity

removing some of the pressure of what

could be the biggest financial

transaction of your life selling selling

business I mean at the at a high level

it's diversifying that portfolio right

and we as entrepreneurs are so bad at

diversifying because it has taken a 100%

of our focus and energy in this company

for as long as it has in order to make

it sustainable But now you're telling me

take some of that money and don't

reinvest it back into your company Put

it somewhere else Um so to anybody who's

like "Oh I just reinvest my profits." I

would beg you print off a list of your

expenses from last quarter from last

year and look at them and tell me how

many of those you swear you couldn't

live

without Because what I see way more

often than not Barrett is not that

you're reinvesting in capital equipment

and hiring new salespeople and going

into new territories No you're just

actively growing a company from

investment You're just We're just really

good at spending a lot of money

We I mean that's just we're just really

good at spending and you know maybe you

don't need to do free lunch you know

twice a week maybe you don't need to you

know have the the new equipment maybe

you don't need etc like go through find

it yourself like chances are you could

cut 10 to 15% out of your expenses

tomorrow and be fine and that's all

money you can start saving today Just

the the thing about the economy shifting

and your trade whatever whatever you're

in shifting too This is why we do what

we do why I do what I do at GW is I've

had too many companies that say "Oh I'll

just work here and then sell it

someday." And they get to the end and

they find out they're basically selling

their equipment you know on Facebook

Marketplace because that's the only

people who are going to buy it They you

know they stopped innovating They just

kept doing the work They didn't change

the technology They didn't hire or

weren't able to find people to come in

and keep the business model actively

engaged in the prof in their trade or

their profession And so they get to the

end and you find out it's not worth

anything You you've

invested 30 40 years into this and

you've made good money along the way but

at the end of the day that's what you

have you have the 30 or 40 years of cash

flow and if you're not putting that away

into retirement you get to the end and

that and that company's not worth

anything then it's just it's a shame It

it breaks my heart It makes me get up

and do what I'm going to do Um I

couldn't say it better Yeah So I really

couldn't Well that's exactly why I mean

that's why we do what we do isn't it

that's why we do what we do Yeah Because

dude there's something about the 10 15%

savings rule If you just follow that you

will solve so many of these problems You

won't have to like it won't all be

hanging on how good of an economic

engine did you really build in your

business Because if it's just a service

company and you're really good at

building decks or laying concrete or you

know whatever doing taxes like that's a

service that's not an economic engine

someone can buy for the cash flows and

pay you a nice multiple on And even if

it is a great economic engine you still

have that income gap problem we talked

about earlier of like is it

worth enough to pay you what you're

currently making and continue the

lifestyle that you have right now Yeah I

mean I I really couldn't say better I'll

stop trying to improve upon it That's

all right Um Nick before we jump into

the lightning round here was there

anything that uh you wanted to add that

we haven't covered yet anything I missed

you you know this show is a a show for

entrepreneurs right it's a show for

anybody in in a business interested in

selling or acquiring or or having

already been through that process I

would just say uh you don't have to do

this

alone don't don't try um you know

entrepreneurship can be such a lonely

journey don't don't make uh business

exit planning a similarly lonely journey

you don't have to so bring in adviserss

you uh who who uh have been there who

know the the journey who know the ropes

and let them walk alongside

you Yeah this is the one for most

businesses most people this is the one

time this transaction is going to happen

in your life

But for someone like you someone like me

this is one of three one of 10 one of 50

depending on you know how many how many

deals you do uh in a year that that I

might deal with So um yeah good stuff

All right so you ready for the lightning

round Nick i'm ready Let's do it All

right Uh coffee or tea and how do you

like it coffee with a little bit of

heavy cream Okay Um pie or cake and do

you have a favorite kind apple pie Um I

think you just shared it but what is a

what's a common belief among

entrepreneurs that you would want to

challenge

oh man that your business has to run

your life I mean embellish on that just

a little bit Um if you got into business

it wasn't so that you could work 90

hours a week and at the expense of your

family and friends What is your favorite

holiday and why

oh man that's a tough one Uh toss up

between Christmas and Easter Uh

Christmas for all the family Uh kid

reasons but also u you know as a

Christian celebrating the birth of Jesus

is only improved upon by celebrating his

his resurrection Um are you a morning

person or a night person and do you have

a favorite routine morning all the way

Yeah I love an early morning with you

know a cup of coffee a good round of

exercise probably on my mountain bike Um

and you know hopefully hitting a couple

hours of work before anybody else is

even up Um what is one thing that you

would want your successor to remember

you for

man you know in Proverbs it says "What's

attractive in a man is his

kindness?" And those are the words that

my father-in-law told me when I asked uh

if I could marry his daughter And uh I

hope more than anything Barrett that

people would remember me for my kindness

I I want to treat people the way I would

want to be treated myself And if I'm not

kind I'm not sure what else really

matters

Um where are you finding creativity

right now

different work environments

How so i've worked at home for 5 years

So getting out to other work spaces

helps me to clear my head think

differently Are you using like

co-working spaces for that are you just

talking like Panera Bread Starbucks

stuff like that yeah the Starbucks

Panera isn't ideal Uh so mainly

co-working spaces or even like uh

driving to a pretty place and sitting in

the truck and or outside and working

Awesome Love it Used to do that myself

Um what do you have coming up that's got

you really excited for this next year

well we're expecting a baby in September

so that's pretty exciting

All right I'll take it Congratulations

again Thank you Um and Nick where can

people go to find out more about you

yes you can go to

openheadedwealth.com You can check out

my social links there Instagram Nick

makes sense

Um I've got some free offers for anybody

listening as well Um just go to

openhedwealth.comresources

um got some really helpful handouts for

building your first cash flow plan for

investing with purpose I do biblically

based investing for my clients Uh some

tax saving ideas business planning stuff

like that So uh but yeah opened.com is

where you can find me Feel free to reach

out I would love to I'd love to meet any

of your listeners Uh but yeah I do uh

most most everything I do runs through

there Awesome And do you also have a

podcast Nick i do So you can find me uh

one degree by Nick Goff on uh anywhere

you listen to podcasts Awesome Well

thank you Nick I I I really appreciate

you coming on and just sharing your

passion for small business owners and

sharing your story walking alongside

your dad through this whole thing I

appreciate it Barrett My pleasure Thank

you so much for having me It was a a

pleasure to be here I appreciate you

extending the invitation uh and giving

me a chance to come on the show and tell

my story I I appreciate and really love

what you're doing Uh so keep up the good

work I think it's a great show and and

the great work that you're about Thank

you so much You've been listening to the

Art of Succession podcast with your host

Barrett Young Twice a month we'll bring

you interviews sharing the successes and

challenges from business owners with

their own succession stories The Art of

Succession is sponsored by GWCPA and is

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