Episode Transcript

Speakers: Craig Andrews, Austin Smith

[0:00] Craig Andrews: You never know how much time you have. For me, that stopped being an idea and became reality on August 22, 2021. The doctors put me on a ventilator and told my wife to call hospice so she could prepare for the day they planned to pull the plug. Six weeks later, I woke up to an entirely different reality. I could not walk, I could not talk, I could not even lift my own arm. And I woke up realizing something else. I had not made the right preparations for my family. The plans I thought were pretty good fell through when it mattered most. That is why Fiduciary Alchemy welcomes voices that would have warned me about the holes in my plans. My hope is that you live a long and prosperous life, but I also hope you make better plans than I did. So tune in, take notes, and stay with us through the end when Bluesman Grindle and the Compliance Choir bring a word of caution. Today, I want to welcome Austin Smith.

[0:58 - 1:58] Craig Andrews: Today, I want to welcome Austin Smith. He is the Vice President and Chief Investment Officer at Shultz Wealth Management. He joined Shultz Wealth in 2018 as a junior advisor and has since grown to the role of Vice President and Chief Investment Officer. He wants to give business owners the opportunity to exit their business without selling to private equity while still being able to cash out. And that was one of the things that really interested me about Austin when we talked because, I don't know, I think we need more options than just private equity. So anyway, Austin, welcome.
[1:58 - 2:02] Austin Smith: Great, thanks for having me. Really excited to be here and kind of talk through all this.
[2:02 - 2:05] Craig Andrews: Yeah, I'll make a little different.
[2:05 - 2:11] Austin Smith: Yeah, well, let's go back a little bit. You were telling me that you were big into baseball.
[2:11 - 2:44] Craig Andrews: Yeah, once upon a time, had a lot of fun, played it for a long while, played it through college. And then I, you know, had the reality that this probably wasn't gonna, this wasn't gonna pay me ever. And so I should start taking to school a little more serious. Went to Southwestern University, had a great time there, made a lot of great friends. But yeah, it's baseball all the way through college. And then it was time to go find something really good a job.
[2:44 - 3:05] Austin Smith: Yeah, you know, I have a nephew that went to college on baseball scholarship. And when it was time for recruiters and other people to start picking them up, COVID hit. Literally, this first big game where they were gonna be recruiters was that they in March when they just shut down everything.
[3:05 - 3:37] Craig Andrews: That was wild. I was actually in the car with a group of college baseball buddies on the way to celebrate St. Patty's Day in New Orleans that weekend. So we were hanging out in the French Quarter down there somewhere and, you know, the cops were driving around saying, "This is serious, you should go home." And as young, I don't know, 23 year olds, we were not bothered by any of that as long as the bartender told us, "We're gonna stay open and keep serving everybody." But he said, "We'll probably be here."
[3:37 - 3:48] Austin Smith: So how did you go from baseball? 'Cause I mean, it sounds like you were pretty serious. That was your dream to get into the major leagues?
[3:48 - 4:42] Craig Andrews: Yeah, when I was younger, for sure. In high school, I had two elbow surgeries. We didn't have to play it all my junior year, which is the biggest recruiting year. And I think that's probably a big part of what pushed me to wanna go to Southwestern. Yeah. I probably would have gone to a bigger school. I'm a huge Longhorn fan. So I've seen them take us to football games to this day. My whole, my parents went there. My sister went there. I would have certainly wanted to go there. But they didn't want me to play baseball. I was not that level. But really felt like I missed on something by missing that junior year of high school, the recruitment period. So I wanted to go to Southwestern and play. Had a good freshman year, sophomore year, things went downhill, it kind of got hurt again. And that's when the realization hit, you should probably start like staking school seriously and seeing what other options are out there, which I did.
[4:42 - 4:52] Austin Smith: Yeah. Yeah. And so for those that know Southwestern, that's up in Georgetown, which is just north of Austin.
[4:52 - 4:53] Craig Andrews: Yep.
[4:53 - 4:54] Austin Smith: Yep, exactly right.
[4:54 - 4:58] Craig Andrews: And then you joined a big firm in Austin.
[4:58 - 5:47] Austin Smith: Yeah, out of school, I did. They've since been bought actually. But yeah, it was a larger firm. They did a lot of public school retirement plans. Retirement plans in general. It was good. I got in, I learned a lot. There was a guy who I met there who I credit a lot of, I don't know if he knows this, I should probably tell him. Cred a lot of where I am today because of him. I got out of school and I didn't exactly know what I should do next. Further school, different accreditations. And he was, he was the CFA had gone through it and he kind of pointed it to me. And the way he explained it was like, well, if you don't really know what you want to do, go start down the CFA path. And if you can get to the end of it, well, you can probably, it's gonna open all the doors to do anything you probably want to do.
[5:47 - 5:50] Craig Andrews: So there's a, there's TLAs, what's a CFA?
[5:50 - 5:53] Austin Smith: TLAs, Charid Financial Analyst.
[5:53 - 6:39] Craig Andrews: Yes, yes, Charid Financial Analyst. So it's, you know, the guys who generally run money, more run funds than are on the analyst side. So the Charid Financial Analyst, it's a three series test designation. Pretty hard, pretty rigorous exams to go through, which is why he was like, well, if you can do that, you probably figure out what you want to do from there. So I did, I started down that path. And, you know, now as an advisor, like you said, both management financial planning guy. I'm also a CFP and I generally, the CFP is much more applicable to the planning world I'm in today. But I still think that CFA route opened a lot of doors to get me to where I am. And I think it's very unique kind of from guys who sit on the my side of the table who do have both of those designations.
[6:39 - 6:41] Austin Smith: And CFP certified financial planner, right?
[6:41 - 6:55] Craig Andrews: Yes, the much more well known, much more well marketed, you know, they do a good job. The CFA does not and it makes sense because the consumers aren't generally as concerned. It's more the big investment companies that target the CFA world.
[6:55 - 7:08] Austin Smith: Yeah, yeah. And so you join where Schultz, and help me, I'm not sure I'm pronouncing that Ray, is it Schultz?
[7:08 - 7:10] Craig Andrews: Schultz, Schultz, yeah.
[7:10 - 7:13] Austin Smith: Okay, as I had a T, but it doesn't.
[7:13 - 7:31] Craig Andrews: That, yeah, yeah, okay. Yeah, I have, I'm in a networking group and my vice president is Schultz without the T and we always, always try to clarify that when I'm introducing them. 'Cause everybody wants to throw the T in there. You don't have the T, but you sound it out.
[7:31 - 7:37] Austin Smith: Yeah, yeah, well, we say it's probably, you know, it's probably the last name. It's always said it's almost human, it's right.
[7:37 - 7:41] Craig Andrews: Yeah, fair enough. So when'd you join Schultz?
[7:41 - 8:22] Austin Smith: I joined Rob at Schultz Wealth in 2018. It was March 2018, pretty interesting. I came up for him, I got introduced to actually a client today. You know, he, Rob went out on his own, left kind of a producer, a group previously to start the RA in 2014. I came up and 2018 got introduced, had breakfast with him one morning and was pretty enamored by kind of the process he had built out and started about two weeks later. I went down, gave my notice and I packed up and moved from Austin back to, you know, I'm from the Dallas Fort Worth Metroplex and that's where we all started now. So kind of moved home, so to speak.
[8:22 - 9:20] Craig Andrews: Yeah. And the, you know, one of the things I really liked, again, about what you said was hell, you're trying to get business owners an opportunity to exit without selling to P.E. private equity. And, you know, years ago I didn't have bad feelings about private equity, but the more I see what they do, and I've actually interacted with, I was a part of an acquisition that was being ever seen by Bain, Bain Capital. And I mean, the folks I worked with were brilliant, I have nothing but respect for them. But, so that was where I was starting, but the more I'm exposed to private equity, I tell people as like, they destroy all things that are good and virtuous. You know, my wife was working for NCR and she said, hey, there's a rumor that P.E. is going to take over us. And I told her immediately I said, if they do that, the first thing they're going to cut is customer service.
[9:20 - 12:44] Austin Smith: They look for all the places. It's really somebody, and I don't know, it's probably oversimplifying it, but it's somebody who's got probably a pretty high degree. He's looking at everything on an Excel chart, trying to figure out how do we squeeze more out of this. Expenses, customer service is probably a really easy first option. And that's exactly right. We started out in the past focusing on the business on our worlds, 2019, 2020. It had a lot of really success of growth since then. And really after the most recent wave of 2021 and two, there was a lot of activity. And the clients who didn't go that route kind of saw something and they're competitors that did go that route. And the guys that they thought were once really strong competitors, they, it wasn't the same. They were probably kind of taking their butts left, right, and center as far as it seemed like. And they realized that was the difference, is that the culture that was there before, everything that's good and virtuous in your words, had left and all the character and, you know, community of that business left. And it does feel like more of a spreadsheet, regimented experience. And that's when, if you have the company and you see what happens, you see this company getting ran into the ground. If you built this company up for 30 years and you want it to have a legacy that is, is probably personal in your family legacy, but you've poured a lot of your blood, sweat, and tears into that business. And so if you watch it get ran into the ground two years after you leave it, that hurts. And we had multiple clients kind of come and does and saying, so what are our other options? And there's certainly other options. You have management buyout, if there's a family transition, ESOP, you know, we've had all of this come through, but they all have different levels of risk with them. And one was a very distinct example of foreign company that we work with, great clients, wonderful two owners, done it forever. They're the ones who really came to us and was the first open our eyes to it. It's, we need another plan. We need to build a plan around these guys completely independent of their business. If we want them to get to the point to where they can have all the options on the table, it means that the planning is really around building assets outside of the bench, outside of the concentrated business asset on the balance sheet. That's the way we, the terms we use for it, you got a very concentrated asset on your balance sheet, most business owners, it's 80, 90 plus percent. We need to start diversifying your balance sheet. You know, this business is successful, it spits off profits, we need to redistribute that. Real estate and the investments that, you know, we obviously manage. We build that up to a level, do we get down the road? And we say, and we're doing this with these guys now, is, hey, we don't, private equity is really an afterthought at this point. We are going to sell this to the management team. We just need to strike a deal that makes sense. Both for them as buyers. And something that supports our personal financial plan. So we do a good job, go ahead.
[12:44 - 12:54] Craig Andrews: So when you're saying diversify the balance sheet, just so I'm clear, are you saying diversify the balance sheet of the owner? Or are you saying diversify the balance sheet of the business?
[12:54 - 14:13] Austin Smith: Very good, the owner, we don't really get inside the business too much. We look at the business as an asset on your balance sheet, and we're planning around your financial plan, of, you know, the rest of your balance sheet and getting to our goals. So that's where it's, hopefully the business has gotten to work successful and it's profitable to where, yes, you have a capital that needs to get plowed back into the business for continued growth and success. But hopefully it's to a point where you have the, at the end of the day, there's some other discretionary capital that you can start to put away in distributions, you know, putting how you're set up. Put it in your pocket one way or another. And put it in your pocket that we're able to realize in the investment world. Maybe you can buy the building you're in, you know, it's a commercial real estate asset on your balance sheet, your personal balance sheet. So just started to diversify, we call it your wealth stack. That's an internal, you know, term we use is what your wealth stack look like. Most everybody comes to us pretty concentrated. Our goal is to diversify that wealth stack. We've got bar charts that go off year by year and they're color coded. And the idea is to have a, you know, a 90% concentrated business asset on the balance sheet, get diminished over time from a concentration standpoint, but not from a value standpoint. We don't want the value of your business to go down. We just want the value of everything else to go up. So it's not as concentrated.
[14:13 - 14:21] Craig Andrews: Well, I mean, that just seems like a pretty solid investing principle anyway. You never want to have all of your eggs in one basket.
[14:21 - 15:23] Austin Smith: Certainly, that's exactly right. However, for most of these guys to get started and to get off the ground, they're really just better on themselves. And they wanted to go do that as an operator. And our goal is to get, at some point when you probably start out, there's a whole lot less to lose, you know, I don't know, everybody's got the different spots in their families, obviously. But when you want to go out and start something, you're at a different spot than 10, 15, 30 years down the road, when you've built a business that needs to be able to weather all the storms. And a lot of the times you have the ability to weather it is because you are in a strong financial position, personally, outside of the business. You're exactly right. Strong and best principles diversify, but these guys have never done it. They've pretty much probably poured everything into the business forever and tell they meet with somebody like us that says, "Hey, this is great. "You have a really profitable business, "but we need to start building up together areas." So that gets more than you need to go.
[15:23 - 15:58] Craig Andrews: Yeah, and now I love that. You know, the one question it raises in my mind, and I know you don't get inside the business, but one of the things I've heard from business brokers is they said be very careful about taking too many distributions because what that tells potential buyers is that the stock market's a better investment than reinvesting in your own business and it lowers your valuation. Do you ever have conversations with them about that and how they kind of balance that trade-offs today? So they're sending the signals. Well, wait a minute. Anyway, you're selling to the management team, so it's not an issue.
[15:58 - 16:54] Austin Smith: Yeah, in this situation, certainly. That's not a concern. And I never heard it described quite like that. We always just tell our clients that come to us and say, "Hey, what you guys are making in the stock market? "I'm making three times that inside my business." And we're like, "Yeah, you really should be." I mean, it's a very high-octane, risky, concentrated asset. I mean, that's comparing it to like Tesla, like one single company. We're not investing in one single company on the investment side. This is here to backstop you. You should be able to plow capital back into your business for the high growth you're hitting to achieve, but this is a protection side. This is the backstop. This is where we start to diversify the balance sheet, diversify not all your eggs in one basket. But that's the conversation. Not, "Hey, we're looking to outperform what we're doing "in the stock market with what we're doing "in the wealth management space."
[16:54 - 17:24] Craig Andrews: There's something that reminds me of, I was reading a newsletter the other day by Ryan Dice. He was founder of Digital Marketer, largest marketing training company in the world. And he's now focusing on something else helping people scale their business and is talking about the order in which you should hire people. And he said, "The first person you should hire is yourself." And what he meant by that was, you need to start paying yourself a real salary. You need to start paying yourself what you're worth.
[17:24 - 18:09] Austin Smith: I always think that's so interesting whenever we go through, and we're getting at everybody's financials, what do you pay yourself? And it's some astronomical loan. I mean, accountants have different opinion the whole time, but I wanted to look at it from the lens of, okay, if somebody's gonna replace you in this business and if you're ever selling this to somebody, they're gonna correct all that anyways in the financials. They're gonna right size it to a degree of, well, what does this role get paid? As well as, personally, the benefits of, I mean, in my opinion, the social security you get, you pay yourself a real wage, there is social security as a real benefit long term. Yeah, I agree. It's so interesting when guys don't pay themselves anything or weigh below market rate.
[18:11 - 18:36] Craig Andrews: I mean, I get it. I'm a business owner. I mean, I made a, this morning I made a purchase that could take my wife away for a few days, probably a real nice week's vacation somewhere but I spent the money because I believe it would, it would help me grow my business. And that's just, that's part of the mindset you get stuck in as a business owner.
[18:36 - 21:52] Austin Smith: Yeah, you're investing in what yourself and what you're doing and your operations. And that's, that's extremely important. And that's kind of, we call it, when we analyze, one of the areas we do get in the clients business is a little bit, is trying to understand their cash position. We have a ton of clients that have a ton of cash on the balance sheet and it provides a level of comfort to whether the downstorms, they've seen the lean times, they wanna have cash on the balance sheet to whether that's the one. At some level, it's needed, strong working capital, able to get you through what you need. But we also call it, there's a level where it's called dead money, that's the internal term we call it. It's the amount of money over what you need inside your business to run your business. And so that's what you should be doing something else with 'cause right now it's just sitting in the business as a dead asset 'cause there's no return on that if it's sitting there because you've got various efficient assets on the balance sheet. So that's the dead money is what kind of where we say, okay, there's cash inside the business that we can use to distribute to build up our wealth stack outside of the business. And that's ultimately when we get down the road to back to the conversation of, hey, we wanna be able to exit but we wanna exit on our terms, not on private equity terms. Well, to do that, you have to have a really strong financial statement outside of the business. 'Cause if you do get down the path and it's a management team buyout or a family transaction, that management team is a generally not very bankable in the bank size. They're not, if you use round numbers, you got a $10 million business, the banks can not gonna loan that management team that's never in that business day in the life $10 million to pay you off. So you're gonna take a seller finance note on this deal. And that's fine as long as that's not our only asset on the balance sheet. If it is, then we're our success, the business owner's personal success and retirement is completely hinging upon the management team's ability to deliver on the business, continuing to execute. So you can get paid off on your seller finance note. If we did come to a client that didn't have anything else that says, hey, we wanna do this route to our management team, we would strongly have advice conversations of, that is a really risky and probably not the best option and we should look at other routes. But if you're somebody that we're planning this over a five year period and it's always been the plan and we've taken distributions out of the business to build up the balance sheet over the five years and that $10 million business, two partners, $5 million on each one of the balance sheets, but they've also got eight, nine, $10 million outside of that asset, outside of their business because we spent the last five years planning accordingly. Well, now it's not the concentration concern it once was from a risk perspective and that's the deal they want to do. And you never want it to happen, but you can underwrite this and say, okay, what happens if that note goes to zero? Let's take a look at the planning software. Okay, this plan runs perfectly fine if this goes to zero. We've done a good enough job planning other means to a successful retirement. And that's not our goal, we don't want it to go to zero, but how worst case in the year, how does this look?
[21:52 - 22:15] Craig Andrews: You know, and something that just tipped me when you were saying that in the case of the bank lending 10 million, the bank see investor. Now you're the investor and I bet it changes attitudes when you're sitting there and you're approaching that day of the handover to say, have I built the team that can run this business and bet you it changes behavior to help you build a better team.
[22:15 - 23:48] Austin Smith: Absolutely, that is actually one of the main conversations we had with these guys is, okay, you want to do this. Are they all, you know, if you're selling it to a management team, not only do they need to be able to pick up where you left off and work, they need to be able to work together and do it together. If there's not, they're not going to be able to be working together on it, you know, they're going to have their own prerogatives of what they want to accomplish that is not, you know, taking the business, whatever level, making sure you get paid on your, you know, paid off. So yeah, you get very intentional about, okay, I'm selling it to the management team, who is the management team? Who are these guys? Are they going to be able to pick up where we left off and take it to the next level? You know, the part of it isn't selling it to them to maintain status quo, you've taken it to high levels, they should have aspirations to take it to new heights and the ability to execute on that. So you're exactly right. And I think that's just good business practice all the way around is if you're running your management team, like I might sell it to these guys one day, even if you do end up going a different route, you're going to get a way higher valuation on it because whoever you're selling it to understands, well, these owners have done a really good job and built the management team and, you know, accountability, flywheel, and get everybody's on the same page. And, you know, that business is worth more. So it's just good business practice all the way around.
[23:48 - 24:03] Craig Andrews: Yeah, and that's the thing. I mean, even if you are selling to private equity or someone else, they don't want to business that needs triage. They want a business that's like a machine that just runs.
[24:03 - 25:01] Austin Smith: Exactly right. The systems in place, there's processes in place, there's accountability, there's feedback, there's escalation to management when needed. They want the owner to be pretty much an absentee owner because whether you're stepping out of the role, and maybe they're stepping into a chairman of the board role because you still want oversight for a period of time, and that's the legal side of it, that certainly you want to get buttoned up with a stronger money attorney who knows what they're doing in a situation because you should still have rights to financials and, you know, they can't go take, they can't go loan to a whole bunch of money from the business that gets in front of you in line that without you signing off on it or they can't go make huge purchases, that's gonna change, you know, what you think this business would be valued at without you signing off on it. So you still have a role, but it's not a day to day in the business role. And that's part of that leadership team, getting them to the right spot.
[25:01 - 25:34] Craig Andrews: Well, I mean, you see that in the enterprises, the one that comes to mind is, you know, Tim Cook is stepping down from Apple. Well, he's not disappearing, you know, he's gonna be the chairman of the board, and, you know, they're bringing in John Tarnas, who's been with the organization for years, they've been prepping him as one of the possible replacements, you know, for Tim. But that, you know, so you have the preparation for the successor, but then, you know, Tim's still hanging out, just chairman of the board. So it sounds like the same thing. It's kind of a similar situation.
[25:34 - 26:48] Austin Smith: Exactly right. And, you know, think about it. If that's what Apple's doing, probably one of the most successful companies of the last 20 years, they're pretty well thought out. That's something that if you think you're gonna move on, you should be thinking about as well. It's a long-term internal process to make sure the team's to the right level, but you still wanna sit there, be a resource to them as well. That's an under, you know, under-appreciated part of it to some degree. It's yes, it's striking a balance between wanting to turn over the day-to-day operations, but also probably being leaned on as a resource on, you know, some sort of decisions that have to be made and just a sounding board. If you are still have an active role in kind of that, maybe it's a quarterly fashion, quarterly meetings, getting updates, it provides space for all that to happen, where, you know, the new owners don't think you're just hanging out on the golf course or on a beach somewhere, and while he's not involved, he doesn't know what's going on. And that's protection of your investment, because it still is on your balance sheet and no receivable of, call it $5 million of, you know, that is an asset on your balance sheet, and you wanna protect that, which means you still wanna be in the know of what's going on with that company.
[26:48 - 26:58] Craig Andrews: Yes, as somebody who's been part of a venture-backed firm, yeah, the investors, the investors show up at least once a quarter and they wanna know how their money's being spent.
[26:58 - 26:59] Austin Smith: Exactly right.
[26:59 - 27:20] Craig Andrews: Yeah, and I think that's really the thing, is you're now an investor in what was one sure company. You're the financial backing, and as much as a VC has right to be on the board of directors, you have a right to, for some oversight role until the transition's complete, till you're fully paid out.
[27:20 - 27:21] Austin Smith: Exactly right.
[27:21 - 27:41] Craig Andrews: And then, you probably still have an intention and legacy 'cause you did the deal this way, and you took less money to do the deal this way, but at that point, you're paid off, you're made a whole, then they get really the opportunity to take the business to a, they can be more aggressive with what they want, it's really, if they're a company at that point.
[27:41 - 27:53] Austin Smith: Do you encourage your clients to take like a, you know, 90-day sabbatical as a test drive, as they're approaching exit?
[27:53 - 29:31] Craig Andrews: We do, that's something we talk about a lot, and I think it's missed a lot on the investment banking brokerage side of, they're really trying to get a deal done, and they're trying to look at the economics of the deal. The economics of the deal might work all day long, for all parties involved, but if you get to signing day, when you think you're gonna sign this company, and you haven't started to take a step back, what am I gonna do with all this time? This is a story we really hear all the time, is they get to signing day and they're like, "I can't do this deal," and so why not? Well, this is my baby in the last 30 years, I've poured every blood, sweat, and tear I had into it, it's my identity, and that conversation hasn't been had, that's like the behavioral, emotional conversations that we're having, you know, we're financial planners, and economics of it are a big portion, but we're also pretty in tune with their entire lives, you know, retirement-wise, and wanted to have the conversation. What are you gonna do every day? A lot of times, it's very important in our world that husband and wives come in, the conversation together, whatever spouse is at home, traditionally, and the husband's running the business. The wife's like, you're not just gonna sit around the whole household every day, that's not an option, so you need to go think about what you're doing. And be intentional about it. And these people are hard-charging, driven individuals, they need to have an outlet to put that somewhere. So that's certainly an important part of the behavioral side of the conversation.
[29:31 - 29:53] Austin Smith: Well, and the other thing that hits me about it, and it's kind of like my story, I'd made plans that I thought were in place, and I went and I come, and I found out there's plans for as good as I thought they were. And if you believe you built a management team that can run your business, there's only one way to know if you actually achieve that, and that's, disappear for two or three months. Don't take calls, don't check email.
[29:53 - 30:01] Craig Andrews: Yeah, that's how you really know. We think we've got this deal we're doing this right, but how are we actually doing exactly right?
[30:01 - 30:27] Austin Smith: Yeah, and I actually noticed somebody who was in two different businesses, and his side business was he was coaching people to do this, and he took a sabbatical from his main role. And it was wild when he came back in three months, they dug a financial hole that took them over, I think it was a year and a half to dig out of.
[30:27 - 30:32] Craig Andrews: Wow, yeah, that's the nightmare that they didn't wanna walk back to.
[30:32 - 30:59] Austin Smith: And he, I mean, he was somebody who regularly coached people about building a team that can run without you. And so for him, that was a real wake-up call. And I just don't know any other way of testing that, other than go disappear for three months, and see what you come back to. And that also gives the opportunity to figure out, okay, when I sell this business, what is it I'm gonna do that's gonna keep me occupied without my wife telling me to go get another job?
[30:59 - 31:32] Craig Andrews: Right, and especially if you think you're going down the path of selling to the management team, you wanna be very confident they can execute without you so you get paid off. It's even more important in that role, because like you said, you're still an investor like a me main investor in that company probably. And you want to know that that team is gonna operate unsuccessfully without you. And you might think that it's on autopilot and you're not a huge cog on the wheel, but like you said, there's no way to find out until you do it.
[31:32 - 31:47] Austin Smith: Yeah. Now one of the things you told me that really fascinated me was at some point, you all realized you need to be doing that in your business and that's when you stepped up to become a shareholder.
[31:47 - 34:42] Craig Andrews: Yeah, it was really, as we went down the business on the world and further into it and kind of developed that as our niche back seven or eight years ago at this point, we thought that, yeah, we should be walking the walk as we're talking the talk and have a formal transition plan in place. And yeah, as we were a growing organization, it really worked. I mean, it worked out fabulously so how far it has anyways for both myself and Rob who's my partner and founder of the firm. We've got a really special relationship that we've been able to build. We're extremely aligned on what we want to achieve. That's a big part of it for one is we both now are financially and want to see the success of the business because we are in business together. We have certainly have different timelines. But we also, when we go into these conversations with clients and talk about there's a ton of different ways to structure all of these deals, we can talk about our own. We can say this is how we've done it. It's a very long drawn out over a long period of time, kind of a unique circumstance to probably to some degree. Rob is 59 and I'm 30 so we've got, there's a big different age gap in what we are and where he's at his life and I'm at in my life. And if we wanted it to be a really successful transition plan for both of us, it was gonna be a long-term plan. But it just kind of shows to the creativity that you can create on these deals. There's no, it has to go one way. There's benefits and there's tax benefits you should explore that are better to go one way or the other. But ultimately, the same as a planning conversation start with what is your goal? What do you wanna achieve? It's the same thing you should be looking at inside your business. What is our, with business transition? What's the goal? What do we wanna achieve? And I think that will help you a lot of the times back into the right answer. It's, and for a lot, for some of these guys, they saw firsthand of what we thought our goal was to get paid out, you know, a PE level, multiple to be done and get into cash in. We thought that was the goal. We saw that what happened in this world and now our goal changes. We now want to be able to reward our management team. And so what, you know, these guys have done to a degree is they've discounted the valuation of their business to make it economically feasible for this team to buy them out. And they're extremely happy to do so. For one, they know the team helped get them to where they are. Two, they know that they're good, regardless. Their financial plan is no different. And so I think it really starts with, what do you wanna achieve? What is the goal here? And we can find a structure to get that done.
[34:42 - 35:03] Austin Smith: Wow. Well, that's awesome. You know, Austin, I, like I said, I was looking forward to this interview because I love what you're doing. I love the fact that you're giving people options other than going PE. And, you know, I just think that's incredible. And how can folks reach you?
[35:03 - 36:05] Craig Andrews: Yeah, our website, Shull12.com. We've got a contact us bot on there. Our email addresses are on there. I don't know if you put it in the show notes, but my email address is often.smith@shull12.com. Extremely accessible. My wife would probably tell me to accessible via email. But yeah, I would love to have any of the conversations. And just like I said, if you think you know, you want to go down a certain route of what you want to achieve, there's options out there to get that done. And I think that's the exciting part of sometimes it is the highest valuation. Sometimes it's just understanding that, yes, I run a very successful business and I should be thinking about what I do with everything else. And we talk to guys, 'cause like, I'm doing to us and they're like, yeah, we can do all this. We just, why is there no money investable? We think it's funny to somewhat to have people come to us and say, well, the other advisors told us, you know, there's a $3 million, $5 million minimum. We look at it through the lens of, you got a really successful business. No one just put a plan together and showed you how to save money.

[36:05] Craig Andrews: Thank you for tuning in to fiduciary alchemy the coolest financial podcast you're likely to find We go looking for voices like the one you just heard because I want you to dodge the mistakes that I made and learn it Without the coma without the drama without nearly paying the man. I Don't know why I lived when so many others died that parts still a mystery now some folks ask Craig What is it you do? Well, I'm telling you now, that's no mystery at all We solve hard marketing problems and crowded markets So good folks like our guests can rise above the noise become visible memorable Irresistible and grow like never before If organic growth is your problem reach out call me let's make a plan and bring your next steps into the light But don't leave yet stick around a minute more and listen to blues man Grendel and the compliance choir deliver a word of caution Just for you This podcast is for information education, that is all It is not financial tax or legal advice to guide your call Nothing here's an offer Nothing here's a buy or sell No recommendation no solicitation I'm saying it plain and well Past performance ain't no promise of what tomorrow brings Markets turning people lose on all kinds of hopeful things every investment carries risk Principle can fade away What works for one won't fit us all That truth is here to stay Fade away The compliance Get your own financial tax and legal help before you make That's the compliance Your situations yours alone your needs are not the same Different facts and different goals can change the whole damn game So talk to somebody qualified before You choose your own Because the weight of every money move Is your own load to hold? Your own load That's the compliance Get your own financial tax and legal help before you make That's the Compliance Blue Oh, oh, oh Oh, oh, oh Informational only Educational too Get qualified financial tax and legal advice That is right for you Oh, oh, oh Oh, oh, oh