Prepare for Your Exit with Enhanced Enterprise Value

Cole Abbott (00:00:00 -> 00:00:00)

Good morning.

Mark Abbott (00:00:01 -> 00:00:01)

Good morning.

Cole Abbott (00:00:02 -> 00:00:26)

Today we're going over what we, we calling exit. Yep. So we've <laugh>, I guess the topic, the core competency, formerly known as enterprise value. That's right. FKA. Yes. Uh, 'cause we've alluded to it on the podcast in the past. Mm-Hmm. <affirmative>. And also we've written a lot about it. Yeah. So, uh, we're making the shift Yes. To exit. Yes. And why are we doing that?

Mark Abbott (00:00:27 -> 00:02:03)

Um, several reasons. Number one, I think that, you know, when you think about enterprise value, part of the reason you're thinking about enterprise value is ultimately it's exit. Right? But, so, you know, you're building something, you're helping people understand what it is that you need to do to increase that enterprise value. So getting agreements on sort of the levers and the ways to think about measuring enterprise value and measuring enterprise value is really important from the perspective of growth and entropy on the opposite side, right? And so, um, so all that's really important. But ultimately, I, as I was working through this core competency, it seemed to me that, you know, we always talk about you want to build at least a stage five company that you can either hand off to the next generation or sell to a, to a buyer. You'd love to see owning and continuing to, you know, um, uh, back the progress of the company going forward. And that's all about exit, right? It's either way you're looking at, it's an exit moment. So you're either exiting as an owner or you're exiting as the leader. And, um, and it just seemed like that's a thing that we should be helping people really understand and focus on and, and become really good at. But we didn't have it in any of our nine core competencies. So, to me, exit and enterprise value go really well together. Um, they're mutually supportive of one another. And I also like the fact that exit is a much shorter word than enterprise value. Um, and so, uh, that's kind of the short version of the story behind the name change.

Cole Abbott (00:02:03 -> 00:02:28)

Yeah. Because we, you, under the, I guess, broad umbrella of exit is enterprise value. Mm-Hmm. <affirmative>. And then within that there's a a time component Yeah. And right. In a, in a goal Right. As opposed to just sort of a thing. Right? Yeah. Um, so it's a little bit broader than that. And then you can go into enterprise value, you can go into all these other things and Right. The ideas that we're really focusing on moving towards something Yes. And having that in mind and not sort of just,

Mark Abbott (00:02:29 -> 00:02:31)

Yeah. And that, and it goes beyond,

Cole Abbott (00:02:32 -> 00:02:32)

Right.

Mark Abbott (00:02:33 -> 00:03:04)

And, and, and exit as a concept is one that, you know, overlaps almost completely with succession planning. And once again, that's not a thing that's talked about really specifically in any of the other nine core competencies. And so I think it, I think the transition enables us to fill a gap that in hindsight was obvious. Yeah. Yeah. Because Right.

Cole Abbott (00:03:04 -> 00:03:31)

We wanna make sure that we're trying to cover most everything. Yeah. That makes sense. With the iCore competencies. Yes. And if we're leaving a big part of that out Yeah. Especially depending on what your strategy is, what your business is, industry. Right. Yeah. That is more important for some than others. Yeah. Right. Because you're looking, whatever your time window is, sort of defines that. And so for those with more defined window for missing that it's a Right. It's a little bit of a blind spot. Yeah.

Mark Abbott (00:03:31 -> 00:04:28)

Yeah. I think so. Right. And, um, and you know, you could, you, part of the exit, you could in theory cover inside of your people com, you know, competency. Um, but, you know, there's nothing, there's, there's nothing wrong with covering a concept in a couple of different competencies. 'cause that's the nature of, right. These competencies is it is a lot of Venn diagramming. Right. Um, you know, obviously there's data and people have an overlap as an example. Um, and rocks and people have an overlap. And so vision, you know, there's a lot of overlapping in here. Um, but I think really, you know, sort of leaning into understanding, um, this big idea behind, you know, positioning the company so that it could, it can persist for generation after generation. You know, you have to talk about exit.

Cole Abbott (00:04:29 -> 00:04:55)

Yeah. Right? Everything, all the competencies interact and overlap and everything. Um, and you say that there's a little bit of people in there. Yeah. But the part that is people isn't really the part that we're, that it's being focused on Right. With exit. Yeah. And so even though you have that overlap Yeah. It doesn't really cover, and it doesn't hammer on the point of being a core competency. Yeah. Right. That's more of a peripheral thing. Yeah.

Mark Abbott (00:04:55 -> 00:04:56)

Yeah. Yeah.

Cole Abbott (00:04:57 -> 00:05:33)

So, yeah. Uh, I, I'm trying to figure of word to, so with internally, we've had a lot of dialogue about enterprise value versus exit. Mm-Hmm. <affirmative>. And so where do you see, I guess, both internally or within coaching, or with, and we, I don't say that in terms of, uh, your investing background. We'll say that for later. Yeah, yeah, yeah. Right. But where do you see sort of that disconnect and confusion lie in really mastering and focusing, or not focusing, but emphasizing, uh, exit?

Mark Abbott (00:05:35 -> 00:05:55)

Well, I think, you know, it's, it's, it's, if you incorporate it into the nine core competencies, it becomes a topic that you will discuss as opposed to what the term, I think the phrase you would use is, is, is leaving it as something in the fog. Yeah. Right? What was it, what would the expression you use,

Cole Abbott (00:05:55 -> 00:05:56)

Uh, do not hide

Mark Abbott (00:05:56 -> 00:08:54)

Unwanted things in the fog. Right? So, you know, so internally we have conversations around like, what are my long-term goals, and what are the implications and what do we need to do to get from here to there? And what happens if something unplanned happens? Right? And so, uh, if those things aren't discussed, um, then we're leaving them in the fog and they're important things, right? And so just getting clear on where we are and recognizing, um, and being open and honest about, okay, so here's where we are. Here's where we're well prepared, here's where we're not so well prepared. Is this a thing we're gonna focus on this quarter is the thing we're gonna focus on next quarter, is the thing we're not gonna focus on for a year, two years, or three years? At what point does that become, um, problematic? Um, in that there's a little dissonance inside in terms of, well, we talk about explicit, coherent, haven't been explicitly coherent resident around what are our intentions. Um, it becomes more important, you know, for companies that, that obviously have third party investors who have someday, right? They, they have a fiduciary responsibility to, to their investors, right? Our investors have fiduciary responsibility to their investors to provide them with liquidity, right? Um, and so, you know, we talk about our exit plan for our current investors is we want to position the company to be able to go public. So, so we talk about those things, right? Um, and so there's an alignment there. And now it's like, okay, if you're gonna do that, what do you need to do in order to be prepared to go public? And well, there's a lot of things that you need to do to it to, in order to be prepared to go public versus just to run a business. And that someday you're gonna sell, right? Uh, there's reporting issues that you need to think through. Um, there's a whole host of, right, uh, things, um, in, in, and, uh, that have an impact across various parts of the organization. Security as an example, reporting as an example. Um, and, and, and, and including just sort of having, um, you know, a clearer rules of engagement on things that matter more to a public company than they do to a private company. And you just can't, you know, say, well, we're gonna go public tomorrow. You know, it takes, you know, it, it, I'm not an expert on, I've only been involved in taking a public com, a company public once, but, you know, it's, it takes quarters and quarters of work. I think for us, you know, it'll take at least a year, if not two years of work and planning to really be well positioned to, to, to, to, to comfortably and confidently go public. So, so that's a thing. And you gotta start from that,

Cole Abbott (00:08:55 -> 00:09:45)

From that foundation, having that context, you know, just be like, alright, we're year out. Let's do it. Let's do it. Yeah. And we had no right intentions or Right. Any prep going into it. Yeah. Uh, it, it's sort of like the, the more left brain version of vision in a, in a way Mm-Hmm. <affirmative> and sort of like the, you know, if you did a, a union thing, like the shadow side of vision, where it is the things that we are a little bit uncomfortable to talk about, right? Because it's out there and it's like, it's a hard thing that you have to focus on. Yeah. And it's not all dreamy and right. And optimistic and, and that, but it is. Right. We have to hold ourselves accountable to the thing that we are moving towards. Yes. And if we don't do that, right, you can say, oh, it looks like it on the surface, right? It's all great. But if we're not putting the proper processes, structure, data, reporting and everything to get to that point that we know we wanna be at, and if we have investors that we've agreed to be at, that's a huge issue.

Mark Abbott (00:09:45 -> 00:14:12)

Yeah. And it's, and there's a, there's a big trust component to this, right? Which is, you know, if, if, let's just say the, the CEO is saying, Hey, you know, someday we're gonna go public, but no, nothing's being done in order to actually prepare for that, then it's like, okay, so are you right? Are you selling me on this idea? But you don't really mean it, right? Because if you me meant it, you'd have to do, there's a lot of work that needs to be done. So then once you say, okay, so now what's all the work that needs to be done? It's like, wow, that's a lot of work. So now are you, are you serious? Or are you just like playing, pretending to want to go public someday? 'cause it sounds cool, right? It's like, no, you literally now have to start thinking about some serious stuff, right? And the same thing, the same thing goes for, um, let's just go a private sale ultimately, right? You don't just, um, for a whole host of reasons, you just don't wake up one morning and say, I'm going to sell my company. Right? Um, and the reality is, is that it takes, it takes some serious planning to get the company ready for sale. Um, and, uh, you know, it takes, it takes thinking about, okay, so, um, can this company be sold without it being dependent upon you? If the company's dependent upon you, is it really that saleable? Right? What do you need to do in order for the company to be saleable and not dependent upon you? Obviously, that's what we call a stage five company. Um, what are the things that you need to do, books and records wise? What are the things you need to do with your leadership team? Right? What are the things you need to do in terms of, maybe there's customer concentration issues, right? There's a whole bunch of stuff right around exit, whether it's private or public, that you need to actually lean into and think about. And, um, you know, for a lot of people, when you're running an organization, you're already, you know, you're already maxed out. And so something's gotta give, if you're gonna, if you're gonna do the work to be, be, be prepared, and, you know, and so obviously if all of a sudden you woke up one day and say, you know, I, I wanna sell it next, next year, um, that may be a lot of work now that has to go into that. Maybe you're hiring an investment banker, et cetera, et cetera, et cetera. And so just playing the longer game, right? Knowing where, okay, two years, five years, whatever it is, thinking through the implications and now sort of judging yourself, okay, so how far away am I from being able to do this? And then the other thing is, you know, uh, a lot of people talk about this, uh, you know, the, the economy tends to cycle every 10 years, right? And so what that means is, you know, you go from you, you go from a recession to a recession, typically, right? We haven't outlawed, we haven't figured out how to get rid of recessions. It's been interesting how we haven't really been in one knock on wood of any significance for a while, right? Obviously, you go back to oh eight was the last big one, which is a long time ago now. Really. I mean, it's crazy right? Now we can talk about the covid and all that, which was, which was, which, which had a lot of elements of a recession, but it really wasn't quite a recession. It was different than that. But typically it's about every 10 years, and then typically, right? If, if you're in a recession, that's a really bad time to sell a business, right? It's just like no one has the capital, no one wants to take on the risk. So there's moments where you don't wanna sell your company. Then there are moments where, eh, you know, the company's performing, you know? Okay. And then there are moments where the company's really, really performing well, and this is like an amazing time to sell the company. And you never know exactly where, you mean, I have have, you know, 45 whatever years in, in, in, in business. I have a sense for good times versus bad times versus mediocre times to sell a business. But no, there's no crystal ball. And so if you want to someday be prepared to sell the business or to take the business public, right? You, you have to prepare and you have to recognize that the timing won't always be your friend. So if that's on the horizon, then you should be doing the work and be prepared. But, you know, the truth is, is you, you may like prepare just in time to not sell because this is a bad time to sell. Does that make some sense? Yeah.

Cole Abbott (00:14:13 -> 00:14:43)

Right. 'cause you gotta be able to adjust accordingly. Yeah. But also in part of that, and having that always be there, you are making continuous adjustments with that in mind. Yeah. And you're not letting things get out of order, because if you do want to sell in a year for some reason Yeah. Right? You don't want to get to that point and be like, oh, we have nothing. Everything is outta sorts. Nothing is ready. We, and it's gonna take tons of work. We're not gonna be able to focus on Right. Actually running the business and making, if this as good,

Mark Abbott (00:14:43 -> 00:15:23)

And those thoughts are gonna likely come to you likely probabilistically. Right. They're gonna come to you during really good times. Yeah. But then if those really good times don't last for, you know, those windows where it's a really good time to do that, they're, they're not 10 years. They're, let's say let's, it is three years, you know, or two years and all of a sudden, 'cause all of a sudden you're like, you're a couple years into good times, you're like, Ooh, now it'd be a good time, but I'm not prepared. Now I gotta spend a couple more years. And by the time you get ready, it's all of a sudden, oops, no longer is a good time. That's one of the many reasons why I believe, you know, you need stage five companies are, the companies have gotten to the place where they're literally pretty confident in planning out five to 10 years and they can be ready for the window for the exit.

Cole Abbott (00:15:25 -> 00:15:55)

Yeah. Yeah. It's when you get it. And then there's, it's a little bit of co correlation causation there, because in doing all that preparation and being that ready, that helps you get to a stage five Right. As Right. And then you're also good at it. Whereas if you are not good at this, you're probably not going get to stage five. Right. So, yeah. Right. There's a little, yeah. It be fun to see the data on that kind of a thing, which I agree. You know? Right. I don't know how we'd find that, but, well, it's,

Mark Abbott (00:15:55 -> 00:15:57)

It, it, well, um, no, the data's out there for sure.

Cole Abbott (00:15:58 -> 00:16:14)

I mean, just in terms of being out there and being able to parse through it Yeah. And actually makes sense of it. Right. And determine how the correlation versus causation thing, that would be a challenge. Yeah. We'll, we'll figure it out. Yeah. Right. We'll get there, but, uh, right now it's just interesting. Yep,

Mark Abbott (00:16:15 -> 00:16:15)

Yep.

Cole Abbott (00:16:16 -> 00:16:31)

So, from, right, as we talked about, from the running business side, but from the investor side, from someone right. From looking at right. Businesses that do this poorly and do this well. Mm-Hmm. <affirmative>, uh, what's your experience? What's your interpretation on that?

Mark Abbott (00:16:32 -> 00:16:36)

Uh, the, what, what's the difference between the businesses that do it poorly and do it well,

Cole Abbott (00:16:36 -> 00:16:40)

Experience from your end? And then ex what does that, like, what do the outcomes look like?

Mark Abbott (00:16:41 -> 00:16:42)

Uh, well,

Cole Abbott (00:16:44 -> 00:16:53)

Both from a relationship as you're trying to develop, right. As you're trying to develop a re relationship Yeah. With the people you're investing in Yeah. And then also how those businesses perform. Yeah.

Mark Abbott (00:16:53 -> 00:16:54)

Well, I, I, I think

Cole Abbott (00:16:57 -> 00:16:57)

At the

Mark Abbott (00:16:57 -> 00:21:16)

Risk of stating the obvious, if, if you go through a good exit planning process, it is going to force you to look at a broad range of disciplines that are associated with just running a business Well, and positioning it well. Right? Like, you know, it'll force you, as an example, if you have, I'm just gonna say this, 35% customer concentration rate, and it is like, oh, that's gonna, that's an issue, right? Because it just means that the predictability of the future cash flow streams is a little bit, um, wonkier, because you lose that one per that one cu customer, right? That's a big thing. Um, and for some businesses, it's like, you know, you, you go from making good money to making no money or losing money. So it forces you to look at some disciplines that are associated with just running your organization. It forces you to look at disciplines with, uh, with regard to not just your customers, but what are the disciplines we have in place, as an example for having contracts with our employees, and specifically maybe around IP as an example, right. Um, it just forces you into, uh, a lot of hygiene that not only is good for positioning the company for exit, but it's just good business. Um, practice. Practice. Yeah. Yeah. It's, it's just, it's discipline. It's discipline, right? And, and, and, and, you know, I shouldn't say this. I, but I will, right? Revealing a little bit of the way I think about things. If this is a good discipline and it's a known discipline, then it's easier for me as a leader to say, Hey, guys, right? This isn't just Mark saying, we need to do this, right? This is like 1 0 1 or 2 0 2 or 3 0 3 of running a business, right? So we gotta do these things. It's not just 'cause I say so. 'cause a lot of times, you know, that's how it feels. You're like, well, you know, we need to do this better. Why? Well, these are the reasons why. Okay. That makes more sense. Right? As opposed to just, just because I say so. Um, and, and, and then, so then you can have objectives, conversations you got, you can even have objective third parties come in and say, Hey, right? Yeah. These things that, you know, this your crazy visionary is saying are important. They are important, and these are the reasons why. And by the way, um, especially if you have people who are also in, you know, shareholders with you, your leadership team or the whole company, which obviously is what we have, right? It's like, Hey, guys, if we're, if we're, if we're not good at this stuff, we're gonna trade it literally be literally 30 per 40% less valuable. Then if we just do these things, that's a pretty compelling return on effort. Um, and that's a com pretty compelling reason to say, okay, I get that. Right? These are the things that we need to do and, and here's where we are and here's what we need to focus on. And here are the, here, here, here are, you know, like what we, what what probably could not only be good for us to get done someday, but you know what, this is better done sooner rather than later. These other things, they can wait, like process, we've talked about that on numerous occasions. These things can wait. 'cause these other things are more important. So let's prioritize those and let's make sure we're all, we all have the context around why we have the priorities we do. Back to explicit, coherent, resonant. Okay. Yep. That makes sense. These are the reasons why we're doing it. We can explain that. People can ask a bunch of questions and, and they're like, okay, you know, I can run with the ball. And you're like, good, just run. And, you know, let me know in 90 days, like if it's a rock, right? Did we get it done and check in during the quarter, make sure we're on track to hit the milestones associated with that rock. But there's no question that when you go through a process like this getting prepared, you're gonna have a bunch of rocks. There's just gonna be a bunch of stuff you're gonna be working on. I would, depends on obviously what stage of development you are and, and how tight a ship you've run. But 10 to 20 rocks probably, you know, for a lot of businesses, do you really get prepared? Yeah. Yeah. Well, and, and so how much capacity do you have to do that stuff and over what period of time is it gonna take? Right? Obviously you don't, if you wanted to do that in one year, that's a lot. Right? So,

Cole Abbott (00:21:16 -> 00:21:29)

And you could take the rocks and Right. How many people are involved with the thing, each thing. It's a, if you're ideally you'd wanna like one rock per person per quarter times the team Yeah. Size. And it's like, oh, we gotta rush it. Then it's like, oh, we're doing one to two rocks, right? Uh, and

Mark Abbott (00:21:29 -> 00:21:32)

We got all this other stuff going on. Yeah. Stuff that we can't ignore. Yeah. Right.

Cole Abbott (00:21:35 -> 00:22:23)

All right. Well, so it's, it, it, right, it is a thing of, it's found, it's a foundational priority. Mm-Hmm. <affirmative>. And given that it's so explicit and foundational, it's not optional. Right? It's so, what's that? Um, it's like the, the book, the Greatest Salesman in the World, whatever. Mm-Hmm. <affirmative>. I think the first part of it is og Yeah. The first thing is form good habits and become a slave to them. And it's kind of the same idea, right? Mm-Hmm. <affirmative>, but at scale for the company. Yeah. And when you do that at scale with a bunch of people involved, it needs to be very explicit. Yeah. And everybody needs to get on board, and it's just, we have to do this. Yeah. It's not fun, right? It's nothing sexy about it. Yeah. It's just, we need to have this, we need to stay on it. Yeah. Um, yeah. And going, oh, I just lost my train of thought. There was the last thing you said.

Mark Abbott (00:22:24 -> 00:22:25)

I don't remember now. Oh gosh.

Cole Abbott (00:22:25 -> 00:22:29)

I was like, because I was, I had like two thoughts and I was like, oh, this, then this, um,

Mark Abbott (00:22:31 -> 00:22:40)

We were just talking about everybody understanding why these things are important, right. And agreeing to 'em, um, they're good best practices. I don't know. Yeah.

Cole Abbott (00:22:40 -> 00:23:27)

I, I know I'm <laugh> I I was like, I had a great question there and I lost it. Awesome. All right. Really proud of myself for that one. Uh, yeah. Okay. Wait, now I, now whatever. So given that there is, that, that tension between, right? Let's say we're a year and a half-ish, and we want to approach that, right? And we're in a okay spot. We're in a decent spot, right? Not amazing at this, but we've been doing the work. Yeah. How much time do you allocate right across for the people that are directly involved with this, right? We talked about rocks, right? How, what is the maximum amount of time that you should allocate to focusing on that exit as opposed to doing the work that needs to be done, right? The, the day to day, the, the running the business side of things. Well, that's

Mark Abbott (00:23:27 -> 00:26:22)

A great question. I mean, so let's just say for the sake of this conversation that this work is, um, a lot of the work that needs to be done and needs to be done under the, under the CFO, right? Un under, under their, um, organization, uh, let's just say for the sake of this conversation, that, um, the work that needs to be done realistically is gonna take a year. Now, the question is how much, you know, how many hours, just to make it simple, right? Is this gonna take, and do we have the capacity to do this? And if we don't have the capacity to do this, can we get a third party to help us get prepared for this, right? Or, you know, yeah. If we look at everybody's, what everybody's got on their day-to-day, week to week, um, um, you know, so associated with their day-to-day, week to week efforts. So let's just say for the sake of this conversation that you're talking about, you know, on average people, you know, can, can easily give you 45 hours per week. And now all of a sudden, if we're gonna do this all by ourself, it's gonna mean that each of them is going to need to give us 10 hours per week, but they don't have it. Right? They've only got, you know, they've only got like five hours to seven hours that they can do it. So you gotta make a decision, right? Are, you know, are we gonna go take longer? Are we going to use a third party? Are we gonna hire someone else internally to work on something that's not going to be a forever work? Right? So these are, you know, this is, these are the decisions that, you know, leadership teams get to make. It's like, okay, so how serious are we and what are the implications and what are the options that we have in order to, to, to get this done? So there's, there's no right answer. Um, it's just about, you know, how smart, how good are you at, at how understanding what your day-to-day week-to-week roles and accountabilities, um, demand on average for the upcoming quarters. Uh, as an example, um, you know, if you think that you are going to have, I'm just saying 10 hours per week per person in that department during, um, audit season, you're probably crazy, right? Because that's typically where everybody's, you know, sort of maxed out a little bit, right? Um, annual planning season is another one where you tend to be maxed out a little bit. So you have those, you have those two seasons typically. One is Q3, Q4, and one is Q1, right? So Q4 is planning, Q1 is audit and everything else associated with it. So, you know, the reality is you probably say, Hey, we can do a little bit of work in Q2, Q4, and Q1, but we can do more work in Q2 and Q3. So let's, as we're thinking through this next year, right? Let's, let's, let's be mindful of all that and, uh, and, and, and, and, you know, plan accordingly. Does that make sense? Yeah. And

Cole Abbott (00:26:22 -> 00:26:32)

If you're dealing with those six month chunks, basically, and you're entering Q4 and you're like, we want to start working on this, we wanna lay that groundwork, it's like, nope, this is not the time to do that. Right? Right. And then you have to

Mark Abbott (00:26:32 -> 00:27:14)

Wait. And so, and then now let's throw one more thing on there. Let's say you have a capital raise going on as well, right? So, you know that, and that typically takes at least 90 days. And so, you know, in your finance department, oftentimes, you know, three quarters of the year is not a great time for working on this stuff. So, and then you say, well, okay, so this is why it gets back to sometimes this is a multi-year effort, if you're just being realistic about it, all right? Uh, specifically with regard to your finance, finance department, they may just not have the capacity, unless, once again, you hire some resources either internally or externally to assist you with this because you feel like you gotta move faster than you can with your current team.

Cole Abbott (00:27:14 -> 00:27:49)

Yeah. 'cause if you have, if you are in, in that financial position where you are doing your audits, annual planning, and you're raising capital Yeah. And you have a quarter a year. Yeah. And so that's, you know, you, you're not gonna have more than two rocks for the CFO in that situation. Yeah. So two years, you get four rocks there Yeah. From a c-suite member. Yeah. It's like, that's not, yeah. Right. That's not much. Right. So it puts even more importance on having that, having you keep up with those things Yeah. And keep up with that hygiene instead of trying to cram it into last minute because you just can't do it. Yeah.

Mark Abbott (00:27:49 -> 00:28:26)

And then it gets back to, you know, selling the company versus going public, right? So the process associated with getting ready to go public is a more onerous, more work needs to be done process than the process of, of, of selling a company or raising capital. Those are three big sort of things that, that you can see having a lot of demand on the office of the CFO, right? That organization. And so, you know, you, you, you're, you're, you're, you're sitting there thinking about, okay, so what are, you know, what are the next things that we need to be prepared to do? And, and what are the implications? Um, and, you know, and, and there's only so many hours in a day,

Cole Abbott (00:28:26 -> 00:28:28)

Right? Yeah. Especially

Mark Abbott (00:28:29 -> 00:28:58)

If you, if you're sort of biased as we are towards genuinely, you know, respecting people's work life harmony. Right? Now, if you're, you know, if you've got an organization where you, you love to run it at the red line and, uh, and, and, and suffer the consequences whether they're stressed out people and you know, that environment or people dropping the ball in that environment, or, uh, you know, um, you know, um, these are the things you gotta think through.

Cole Abbott (00:28:58 -> 00:29:06)

Yeah. Well, if you want to have a really bright burning flame and you don't care about churn Yeah. Give a short window. Yeah. Right? That's a, that's a game that people play, right?

Mark Abbott (00:29:06 -> 00:29:15)

And then, and then imagine now you're doing all that right in front of, let's just say an exit. And so, you know, the investors are interviewing people and it's like, well,

Cole Abbott (00:29:15 -> 00:29:16)

You know, blah, blah, blah,

Mark Abbott (00:29:16 -> 00:29:19)

Blah. Right? The buyers are, and they're like, well, this place feels kind of toxic.

Cole Abbott (00:29:19 -> 00:29:20)

Yeah.

Mark Abbott (00:29:21 -> 00:29:35)

Okay. If we'd been a little more thoughtful about all this, maybe we wouldn't have this level of toxicity right. Before, you know, we're people are taking a really close look at how things are going and where you know where things are going. So,

Cole Abbott (00:29:35 -> 00:29:44)

And we always talk about extra mile, and if you're running it Yeah. Full throttle, right? Yeah. <laugh>, then you don't have that extra mile left in the tank. There's no,

Mark Abbott (00:29:45 -> 00:29:45)

Yeah.

Cole Abbott (00:29:45 -> 00:29:48)

There's no boost button there. No. Yeah. So yeah,

Mark Abbott (00:29:48 -> 00:29:51)

You're all out of, uh, what's the NOIs? Yeah.

Cole Abbott (00:29:51 -> 00:29:54)

I was gonna, I was like, I don't know how, how deep to go into the car analogy right now,

Mark Abbott (00:29:54 -> 00:29:55)

<laugh>, there's

Cole Abbott (00:29:55 -> 00:30:05)

No, you threw a tune on it and you're already voided the warranty, but you're like, it's fine. Yeah. Right. I don't, I don't need this thing to last a hundred thousand miles. I'm good with a great 5,000 miles. Yeah.

Mark Abbott (00:30:05 -> 00:32:25)

And I, and I, and, and, and, you know, as someone who's invested in over a hundred companies and gone through dozens and dozens of the due diligence processes associated there with, right? I mean, you may think that people won't see right underneath the hood and see that things are like, there's cracks in the engine or there's other stuff going on there. But you know, the probability that the slight messes that's been created won't be seen is very low, in my opinion. So once again, that's why Yeah. That's why don't, you know, don't assume you're gonna pull the wool over anybody's eyes, right? Yeah. They're gonna, and, and every, and there's all these, you know, games and we used to get a kick out of, you know, there's a thing called adjusted ebitda, and it adjust, right? And you're like, every single year has adjustments, every single year has adjustments, right? So what's that say? Okay. You can, you can, you can tell us that those are all real adjustments. Or we can sit here and say, well, if you're adjusting every single year, that tells us a lot about the competency of the senior leadership team. Doesn't it? Right. Because it's doing all this stuff. Oh, no, that, that was dumb. Don't worry about, that'll never happen again. Well, if I've got something that'll never happen again every single year, guess what? It's probably gonna happen again. Right? Um, and or, you know, you need, you know, that you're gonna need to go in there and, um, and, and, and have some heavy lifting associated with upgrading the leadership team. And if that's the case, you know that when you're going through that process, it's inevitable that you're gonna have expenses that you didn't anticipate that the engine isn't gonna be running on all eight cylinders, because you're literally changing out your cylinders to keep the metaphor going. Right. And all that stuff's gonna get taken into consideration in terms of the exit value, the multiple, whatever. It's right. So just Right. So what, you know, we want to help people just really be thoughtful about this stuff. Play the long game, recognize the nature of the game, recognize the nature of the rules, recognize the nature of the, of, of, of, of the officials, right. The people who are gonna come in and analyze it, whether it's the accounting firms or the investment banker who's ever gonna be involved and just like, you know, just do the right things.

Cole Abbott (00:32:27 -> 00:32:32)

That, those are pretty standard. They are, it's pretty explicit. They are. It's out there. It's not gonna come outta nowhere.

Mark Abbott (00:32:33 -> 00:32:43)

Yeah. There's not, there's, this isn't magical stuff that's never been done, right? Yeah. Thousands and thousands of companies trans, you know, go through some form of an exit every single year. We know how to do this.

Cole Abbott (00:32:45 -> 00:32:49)

Feels like a good spot to end on. Yeah. All right. Thank you. Thanks.