173 Transcript

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merry christmas everyone and welcome to
the water treaters favorite podcast
scaling
up h2o folks if you have not gotten all
your christmas shopping accomplished yet
well you have one week left and if
you’re like me
and you do most of that through amazon
folks they’re starting to back up so
it’s starting to get pretty scary
whether they’re going to get your gifts
to your
recipients in time so go ahead and take
time for that if that’s on your list
you know i know that i have personally
learned
a lot this year i’m sure you’re the same
way you’ve learned a lot
this year some good some bad
but then again i really look at learning
it’s never bad now some of the things
we’ve had to learn during the year
2020 has been a little rough
for us to get through but let’s face it
we got through it
we’re getting through it and we are
learning from it as long as we can do
that
we are making ourselves better we’re
making our companies better
i always like to take december
to look back at the year and just
think about all the things that i
learned but then
also think am i aligning myself
in the areas that i need to be in
so i am forcing myself to learn
new things and this year the answer
is absolutely positively yes
when i look back at all of the things
that i learned this year
i learned a tremendous amount by
being involved in a mastermind now you
all know that i’m a member of a
separate mastermind outside of the
rising tide mastermind
so that puts me into contact with people
that i might not
ever have their insight about business
with
but as i mentioned i’m also a member of
the rising tide mastermind
and that allows me to talk with other
water treaters
to get their knowledge to figure out
what we don’t know we don’t know to help
us figure out blind spots and probably
most important
to help keep us all accountable
that we are growing as individuals i’ve
learned
so much through being part of
the rising tide mastermind for the past
year
i’ve learned a lot from my personal
reading
and i want to tell you a secret the
mastermind was responsible for several
books that i
read this year and i was being held
accountable by the members of the
mastermind that i would get those books
read
and they’re probably not books that i
would have read on my own so i
needed that constant nudge to make sure
that i read them
but i also have a personal reading list
i like to read
so many books every year and i normally
write that on my goal sheet and i check
off the number of books that i’ve read
in particular categories and folks
there’s so much knowledge out there
in books i’ve never read a book saying
that i’m going to copy this entire book
and get this done in my company or get
this done in my life
i always look for that one nugget that
if
i can put into practice it changes
everything else or to borrow from tim
ferriss
it’s that domino that gets all the other
ones
moving so i’m really pleased with how
i’ve checked things off on my personal
reading list
but i’ve also learned from the
organizations that i belong to we talk a
lot about the association of water
technologies on this show
but there’s so many other organizations
out there
their whole purpose is to get
information to you
their end user and folks if you’re not
taking
advantage of that i implore you
to do so they’re trying to find
information
they’re trying to figure out what they
need to distribute as far as information
so you can be involved
in that but then you can also devour
all of that information that they have
so you can become better at whatever
your goal is to become better at
i also have learned so much from my
peers i try to align myself with people
that are going to one help me
become better but that’s a two-way
street
i also want to help them become better
as well
so when you get involved in a
relationship with trace blackmore you
just have to
expect that i’m going to demand that you
get better and i’m going to demand that
you
help me get better and i will tell you
that
the friends that i have i have had for
years and i think it’s because we have
that
general expectation that we’re better as
friends and we make each other better
people
than if we were not friends so i hope
you have some relationships
in your life like that that you
are making sure that you both are
learning
throughout each and every year and then
it wouldn’t be
2020 if i did not mention
covet you know i got to check off living
through a pandemic
from my bucket list actually
no living through a pandemic was never
on my bucket list
but knowing me i’ll probably write it on
my bucket list because that would allow
me to check it off and those of you
that know me you pretty much know that
that’s a true statement
and yes scaling up nation i actually do
have a bucket list i said the words and
yes
so a little segue i don’t know if you’ve
ever done improv
training if you ever go to a class to do
improv comedy
and what they do is they set a scene up
for you
and somebody just starts acting out
something
it’s the most ridiculous thing that they
can come up with
and then what you do is you agree to it
and then you improve on it so the words
you use when you take over the scene
is and yes and then you do whatever
ridiculous thing you want to add to the
scene
and you keep doing that through the cast
of comedians
folks i bring this up because we’re
talking about learning and it just
popped into my head so that’s also why
i’m bringing it up
if you have never gone to a comedy class
and you are involved in sales
you are missing an incredible
opportunity
it’s extremely awkward at first but you
are going to
learn things about how to handle
situations that are awkward because you
cannot do improv comedy
without the entire thing being awkward
it will help you so much
with your sales training so if you
haven’t done that
i am going to urge you to do that maybe
that’s a new goal on 2021.
now if you don’t have a bucket list i’m
going to encourage
you to write one maybe another goal for
2021 is to have
a bucket list let’s face it life is very
short
and we do want to make sure we get done
in life
what we want to get done within our
lifetime
and if we’re not keeping score on that
well are we really doing that so i
encourage everybody that i coach to
create
their own bucket list and make it a
goal that every single year
you’re going to start taking items off
of
your bucket list you’re also going to
add
items to your bucket list because you’re
going to learn that you want to do
new things but now you have a way
to keep score i know retirement is
something that’s
on everybody’s bucket list everybody
aspires to retire
you know sometimes that means making
sure our investments are
properly planned uh getting our finances
in order
all the different houses so to speak
that we have to get in order in order to
retire that’s something we all have to
do
however if you are a business owner
a water treatment company business owner
this is especially true to you trust me
i know i fit
in this category the thing that i’ve got
going for me is i’m not looking to
retire
for some time so i’ve got plenty of time
to put things in order and i like to
think that i have things in order pretty
well
but you don’t know what you don’t know
and that’s why
i have invited our guest today to help
us out
with thinking what are the things that
we need to know
when it comes to the second act of
our water treatment company my lab
partner today is
michael wardy michael thanks for joining
us on
scaling up h2o and how are you today i’m
doing great trace how are you doing
i am doing wonderfully thank you for
asking
and uh before we get started do you mind
telling the scaling up nation a little
bit about yourself
yeah absolutely i guess even before
there
just thank you for having me on the show
today congratulations on the ray bomb
water technologist of the year award
obviously very well deserved
um just i continue to be amazed at kind
of the scaling of nation and the folks
that you bring on the show just seeing
incredible learnings from
legionella to leadership to the
industrial water week
of detective h2o things i just think
it’s an incredible
learning opportunity within the space
well thank you for that i really i
really appreciate that that means a lot
of course so yeah just a little
introduction to myself
i’m a midwestern guy i grew up uh just
outside of kansas city
and uh have always kind of had this
vision
of getting involved in the world of
infrastructure right it’s this kind of
unseen underappreciated aspect of our of
our lives that kind of drives
everything um and so i guess my actually
my first step
into this world and that led me to water
was actually in
the energy space so i spent the first
several years of my career i actually
bought myself a one-way ticket and moved
to china i speak chinese
and and i decided you know where we’re
better to kind of see that the future of
how we’re going to treat infrastructure
than in a place that
is spending billions on billions every
year on upgrading of of energy and water
infrastructure
so i spent three years three and a half
years in in shanghai
working in the world of solar panel
manufacturing
and so this is you know about 80 percent
of the world’s solar panels are made in
china nowadays
and so it was a really interesting time
my clients are typically europeans and
u.s companies looking to
to enter into this energy market and
trying to figure out how to do so
and so it was kind of a fascinating time
in a renewable energy
and in terms like a new
industrialization
and yet i kind of kept coming back as i
was over there
and this is i think something that folks
have come to under appreciate in the us
and when they go abroad
they begin to appreciate it but is how
we have
failed to appreciate our clean water our
sufficient water on a day-to-day basis
and so i always kind of talk about my
you know what is my come to water moment
and that really took place in just in my
apartment in shanghai
where you know i’d go to work during the
day and and
and work on very large energy projects
and then i’d go back to my apartment and
i wouldn’t be able to drink water out of
the tap
or you know my first time when i went
into my
in my newest apartment in shanghai i
turned on the uh the kitchen faucet and
a black sludge came out
right and so that is something that is
both very telling but also
kind of just you know in my kind of
entrepreneurial mind
and it gave rise to this question of
like how can i fix this problem
and then actually in my last summer
there there was some there was news
articles about 40
000 dead diseased pigs were pushed into
the shanghai water supply
you begin to think to yourself like this
is something that clearly there’s a
disconnect where
you know obviously energy is a big part
of our lives and and all that money and
time and effort needs to go into it
but we seem to have failed to remember
appropriately that you know
water is the one irreplaceable thing on
earth where
there is no substitute and so you know
at the time i i just said you know i’m
going to kind of come back the states
i’m going to figure out how to kind of
play a role
in this next generation of water
infrastructure and just started to
diving into the world of you know where
are there gaps
in the industry where is it technology
is it policy is it finance
and really think through how i could you
know obviously make a living but also
kind of drive change in this space
so i kind of came back to the states i
started off working for a
membrane company out of boston called
oasis water
that was doing a forward osmosis you
know it’s kind of like the reverse of
reverse osmosis
process focused on very brackish
industrial wastewaters i think like
fracking fluid or coal ash blow down
plants
where doing typical treatment isn’t
isn’t something that is cost effective
and
and so you need to figure out a way how
do we kind of meet our
environmental discharge standards and
then i
went and worked for a couple firms more
on the development side of new
decentralized wastewater groundwater
treatment processes
and so at that firm i was i was leading
our effort to
kind of upgrade and decentralize the
water infrastructure grid
and so typically what that looked like
was you know
in san francisco for example new
buildings over 250
000 square feet require 100 on-site
wastewater reuse
i was deploying systems to capture
wastewater produced in
high-rise residential buildings or
office buildings or kind of mixed-use
towers capturing that treating it with a
membrane bioreactor kind of similar
technology
and then redistributing that for toilet
flushing or
irrigation or cooling towers that’s kind
of really where i got
my first glimpse in taste uh into the
world of the water treater world
where i was doing that and then in los
angeles i was working on a couple of
different projects
focused on taking groundwater that was
leaking into
subterranean basements or parking lots
treating that and then reusing that for
cooling towers
i think the difference between those two
applications is in san francisco
that was more of a stick than a carrot
right that’s where
the government was saying that you know
you have to do this because we have
water shortages and
we need to figure out kind of what our
our water portfolio looks like
for the next 20 50 years but in los
angeles the goal and i think this is
similar to how a lot of folks are are
kind of treating this in the space is
this was a cost-saving measure
for the end client where we were
essentially reducing their sewer
discharge bills reducing scale and
corrosion on the cooling towers
while providing them kind of a good
service that that dealt with kind of
their
these uh this water leakage in their
basements so
that’s uh i guess that’s a brief
background to myself
i find that fascinating so water that
they were getting leaked in to their
basements they didn’t want it anyway
and you were able to send it up to their
processed water where they could use it
and they didn’t have to pay for it
it didn’t have to pay for it and frankly
it was a it was a nuisance charge that
they had
to pay for their sewer bills to
discharge it so it was kind of a
double benefit there very interesting
well
you definitely have an impressive resume
when it comes to
water treatment but you’re doing
something a little bit different now
tell us about that
yeah absolutely so you know i was
working on this decentralized wastewater
work for several years and actually kind
of the highlight that i
forgot to mention um was after hurricane
harvey hit houston
in 2017 i actually got called down with
with
actually my now business partner we took
about 18
wastewater operators down to houston
because their wastewater treatment
plants were offline
10 were offline and two were underwater
and really try and help them think
through
how do we create a more resilient
flexible
decentralized wastewater treatment
infrastructure for
uh for houston which uh unfortunately
has kind of had
several 100-year floods over the past
decade
and so you know that was kind of this as
i was doing that work and thinking about
the next generation of this more
flexible resilient infrastructure
that required decentralized treatment my
business partner and i
actually went up went off and kind of
hung our own shingle
in april of last year which feels like
you know 10 years ago now at this point
with all the stuff that’s going on but
we
we kind of saw that where the world or
we
envisioned we saw where the world was
moving in terms of decentralization
similar in in some respects traced to
telecom you know going from
landlines to cell phones and energy
going from
coal-fired power plants to rooftop solar
we saw in some respects the water
industry moving away from these
big centralized municipal treatment
plants that
cost a billion dollars and take 15 years
to build
more towards a reliance on at home
or at kind of commercial industrial
locations doing more treatment on site
and so when we started silmar about a
year and a half ago now
we initially were focused on just
helping a few of these new decentralized
treatment
companies do their work and so that that
took the the form of everything from
helping a company focused on
novel solids capture from wastewater to
even doing some work with a firm
that’s doing uh synthetic biology
basically engineering microbes
to treat things like you know say
legionella or
perfluorinated compounds those pfas
compounds that are in teflon coatings
but as we did that work can we kept
coming back
to this idea of you know when people
talk decentralization
in the water world they tend to focus a
lot on
wastewater reuse or like a culligan
style under sink filter
but as more and more of these water
quality regs come out
and you know even the kind of legionella
ashrae recommendations being one of them
it became a little bit more more and
more clear to us that decentralization
thesis actually has already been
happening for decades right that is
what water treaters do inherently they
are treating water
at the point of need to improve
industrial or commercial processes
so we spent the first year of our
existence i think like most
entrepreneurs
right we we kind of had left with the
vision
and we spent about a year trying to get
our feet settled beneath us
and as more and more time went on we
realized just how excited we were about
getting back into the weeds you know
selling building teams
solving problems operating systems and
we also tried to figure out you know
what does
what does sylmar look like 5 10
15 years down the road which is a tough
i mean it’s a tough thing to try and
figure out
when you’re kind of in it on a
day-to-day basis and so just about
around that time as we you know we’re
finally lifting our heads up to kind of
look around
we actually partnered with a couple of
different investors
and the goal there is you know silmar
now goes out and
buys and builds uh water and wastewater
companies
with a very very long-term focus so
we’re not a private equity fund you know
our goal actually is to
run businesses we’re i’m not a finance
guy i’m a water guy
and so the vision is to kind of run
these for
you know decades if not generations i i
think similar
in some respects to a thesis that a lot
of the owners of the scaling up nation
have
focused on creating something that will
last beyond themselves
and so really what what we do now is is
look for
owners of water treatment businesses
that have legacy businesses that are
looking to kind of transition into the
next stage of their life and
and want someone that they know and
trust to kind of come in
and operate those businesses for a very
long period of time
well see this is very interesting to me
because i’ve been involved with the
association of water technologies for
some time now
and this has been the age-old question
what happens
after i build a successful business and
either my children don’t want it i don’t
have any children
employees don’t want or their employees
can’t afford it
and now what do i do with this thing
that i’m so proud of that i’ve been
spending a lifetime
building so i’m so happy we’re talking
about this and in fact i’m going to
mention
in episode 127 we had tom hutchinson on
and he talked about this very thing so
this is a topic that he spoke about
at awt two years ago and then just
recently for the virtual convention so i
know there are so many people
listening that are either working for
companies that have owners that are
thinking about what their exit strategy
is or people that are actually looking
for
solutions because they have to do
something with this company so with all
that being said
what should everybody be doing about it
yeah i mean i think that’s a great
question tracy and i think frankly i
don’t have the answer
right this is a a question that is going
to be highly dependent on on the owner
and and each situation but i think there
are several options that
uh that we’ve seen out there um that
that will make sense for us for
for certain owners and so i guess the
the first thing i would say is
you know and this is just from me from a
personal perspective right a
multi-generational business is
what i’m building myself um and so if or
when that is an option for owners
obviously i think that’s great um i
think the reality of the fact is is you
know we’re in the water treatment world
which
which isn’t you know quote-unquote the
sexiest world of all times and so
sometimes we’ve seen the next generation
that isn’t as interested
in this business so you know i think if
that’s the case right
if you don’t have the next generation
waiting in line what do you do then
and i think there are a few different
buckets that maybe i can just list off
that i think will provide a little bit
of an overview for owners out there
you know first i think there’s the
private equity world or the venture
capital world
and these are a group of individuals
that typically go out and raise
some capital from outside financial
providers and their goal is to
kind of go in find interesting
businesses you know
they’re they’re typically looking for
businesses that have an
annual profit of over five million
dollars and about five million dollars
of ebitda
but they’re looking to create kind of
operational and financial value
from their acquisitions so typically
what you’ll see is certain private
equity firms will go in and acquire
a few different water treatment
businesses try and scale nationally
or just regionally and they also have
very i’ll say
grand expectations for the businesses
that they acquire
right so they typically are looking for
kind of hockey stick style growth
meaning you know over time you get kind
of an exponential growth of revenue and
profit
but they’re also looking at relatively
short time frames
so as you as you as you talk with a
private equity fund
you should ask is your fund a five-year
fund a seven-year
fund a ten-year fund because doing so
will help you understand can what is
their what is their vision for this
business is this something that they’re
going to
you know cut heads and put on some debt
and then seven years down the road sell
the business
or is it something that they’re gonna
run kind of in light of your legacy
for a long period of time the next
bucket is what i’ll call
strategics and these are the you know
great businesses right
these are kind of the nalcos the chem
treats of the world that are very
established
national firms do a great job and i
think
these these firms have their reputation
for a reason right they run great
businesses they’re able to scale
businesses once they kind of absorb them
into their into their umbrella i think
frankly they’re they’re typically
interested in in larger
businesses rather than maybe some of the
smaller one to ten person
shops but i think that the beauty of
working with a strategic is
they have success they have networks
they’re gonna help your business
further solidify or or mature it’s back
end just in terms of kind of accounting
processes and practices the question
always is how will they absorb
your business’s culture and that you’ve
worked so hard to develop over the past
several decades
and how will they absorb your staff who
who have been working under this culture
for a long period of time and so that’s
something just as you have those
conversations
it should clearly be a question that
you’re asking the third bucket is just
more in line of this this idea of seller
financing
which is if a third party financial
partner isn’t available or you want to
sell to
your your kids or to trusted employees
there’s an opportunity to
basically create a structure that maybe
there’s a little bit of upfront
money that your employees pay you but
then over the course of three five
maybe 10 years you create a contract
with your employees
to essentially pay you over a period of
time
for your equity stake in the business
and then
lastly i think there are frankly people
like myself
and silmar where we’re water operators
we have capital partners that allow us
to go out
and and make acquisitions and and build
companies
um and we also have indefinite time
frames so
we’re not finance people but we do want
to own and operate businesses over the
next several decades and i think
you know frankly we’ve i used to round
it all off we’ve seen a lot of folks
uh in the finance world that have kind
of been going around
talking to owners and saying that they
want to
buy your business and i think a question
that you as a seller
should always ask is do you as this
individual do you have committed capital
or do you need to go raise money once
you negotiate
an initial deal with me and how
experienced are you
in running companies in this water
industry right and we always talk about
water people right but it’s a serious
question of
you know are you going to take 12 to 18
months just to figure out you know what
sodium hypochlorite is
or are you going to be able to
understand kind of how you run
a treatment program for a customer
because i think
the concern and some of the you know the
horror stories i don’t think this is
normal right trace i i think you know we
hear the horror stories and we always
kind of inflate them in our in our minds
but you want to make sure that you as a
seller
are also diligencing your buyer
that’s almost more important for the
future of the company and obviously for
your legacy
is making sure that a this isn’t an
individual that’s just going to kind of
throw you around for 30 60 90 days and
then walk away
or be that this isn’t someone that’s
going to you know fire staff because
they don’t understand how a water
treatment program works
but that you’re actually finding someone
that can
own and operate your business for the
next 30 years
and do so in a way that will make you
comfortable as a previous
owner well let’s unpack a couple of
things that you mentioned
one with the climate going on in the
united states
we could be seeing some more gains taxes
so there are a lot of owners that are
pulling the trigger
sooner rather than later to figure out
what they’re going to do
for the next part of their business so i
think this is very timely
you mentioned a couple things one ebitda
i want to talk about that because i know
there’s probably some listeners out
there that are wondering what the heck
that is i know that’s a way
that we evaluate businesses but i also
know that people will look at revenue
and they put a but they put a multiplier
on revenue so
when you’re looking at a business what
are some of the ways to evaluate that
business
another great question you know every
investor is going to be a little bit
different
but i can talk you talk a little bit
more about how how i think about a
business
so ebitda which is ebi tda
means earnings before interest taxes
depreciation and amortization and so the
easiest way to think about this is
you know as you’re kind of looking at
your profit and loss statement or your
income statement
you’ll have your your revenues you’ll
have your
cost of sales or cost of goods sold and
then you’ll have your
kind of selling general and
administrative expenses which is things
like salaries and rent
and once you take revenues and subtract
your cost of goods and your revenues
rent
and kind of ongoing operational expenses
that will leave you with
uh your ipad number which is just kind
of just another way of
standardizing what is the profitability
of your business
on a quarterly or annual basis and so
as you think about you know how do you
uh value
or how do i kind of look at companies
there’s there’s a few different ways
you know one is kind of what is the
standing ebitda over the last several
years right
2018 2019 and 2020 is a little bit of a
strange year but actually i think
you know the water treaters the world i
think one thing we’ve found is that
this is very much an essential business
and so we we’ve seen
a lot of success over the last six
months seven months even though
the world’s been a little bit crazy so
we’ll look at things like revenue right
how stable is that
is it growing over time how stable and
his ebitda growing over time is your
profitability growing
and other items that we’ll always look
for is just kind of customer
diversification
right so are you are you someone who has
a great relationship
with you know i’ll pull them paper mill
and have just been working solely with
that client for the past 10 years and
that’s that’s your
entire customer base or do you have a
hundred customers every year that you’re
servicing
and the the reason why we’re interested
in that is just you know we’ve seen
some folks in in the water industry that
maybe were just working with
malls as january and february of this
year
and then march april may were very tough
for them and so it’s just trying to
understand you know how
how resilient is the business and then i
think
another kind of component that continues
to pop up in our own thought process is
how much of the business is focused on
equipment sales
versus the long-term service contracts
and and that just goes to again you know
as we think about
covet or even even 08 i think we saw
some of the same issues
of if businesses are heavily reliant
on selling systems selling kind of
fabricated skids
and not so much on the service component
than in 08 and in 2020 you know kind of
early part of this year um we’re pretty
tough uh parts of the year
and so i think our our goal is always to
kind of get an understanding for
how healthy is this business how
resilient is this business
and then again as we think about
valuations
you know tracy you mentioned kind of
there’s a there’s a question of do i
value my business based on
revenue or do i value based on
profitability and i’ll just say it again
i don’t necessarily think there’s a
correct answer
i think what what we’ve seen is
you know i consider myself a water nerd
so i’m just always kind of tracking new
interesting technologies in space
we’ve seen more growth scale
technologies kind of early stage
technologies
being valued on on a revenue basis kind
of a multiple of your total revenue
while the more stable businesses that
have been around
and been profitable and been successful
for the past decades
are valued more on a multiple of of
ebitda
and so that’s a small distinction but i
think it’s one that
you’re that the scale animation should
just be aware of as you’re thinking
about
what is my business worth i think that’s
a great explanation i remember reading
the rockefeller
habits by varn harnish and i think
he said that revenue was vanity where
net was sanity i like that i’m going to
steal it
i’m sure he won’t mind when we get into
the numbers and spreadsheets and
p l’s and balance sheets and cash flow
statements i know some people they
their minds just start to wander with
that we’re good water treaters
a lot of us don’t understand what the
numbers are actually telling us and
me consulting with other businesses one
of the first things we do
is i’ll get them to show me those
documents
and i’m not trying to embarrass anybody
out there in the water treatment
community but i am
surprised at how many companies out
there
run their businesses off of their
checkbook balance
first of all i i think it’s worked for
some people in the past right i mean
that
they’ve been living off of that
checkbook process for for years and
i think so i think that’s great for
individual businesses
i think what it what it lends itself to
though is a little bit of confusion when
it comes to making that transition
and so i think that goes back to you
know as i was running through those
buckets of
different potential acquirers or
partners on the financial side
is making sure that you’re choosing a
trusted partner
because i think as you think about what
does my ideal process
look like for this transition there’s
going to need to be
some trust that’s created there’s going
to need to be some
process that starts to kind of make that
transition from the checkbook
to uh i’ll say a more formal balance
sheet an income statement
that a typical investor can look at and
really really get a good feel for the
business
um and so i think that goes to that that
can be a joint process obviously again
you need to choose a trusted partner to
make sure that
that you’re getting a fair shake but i
do think that by choosing
correctly you all can work together to
come up with
kind of the proper valuation of the
proper price that somebody would pay for
you for
you know for your baby would you agree
that the time to start doing that
is now and not when you need to sell
your business
i would say that time to start doing it
is yesterday fair enough
wait which is it it was just more just a
uh a comment towards
that the the sales process and getting
comfortable with your eventual partner
is a many year process potentially and
so
doing so earlier rather than later will
make it feel less rushed
and make you feel more in control of
that process
as time goes on i want to make one more
comment on
your comment on getting your numbers in
line how i think about that
is you know water treaters are
constantly tracking and have log books
related to how
their water treatment is working on a
minute by minute hour by hour day by day
year by year basis everyone should also
be thinking about kind of the financial
background of their business as well in
the same way where you wouldn’t just
turn off your remote water quality
monitoring devices
and say you know let’s see what the tss
is in in six months because
because who knows what would come come
to be in those six months
so i think similarly on the financial
side really getting a hold for how is
your business
operating on a on a more routine basis
will allow you to kind of further refine
and
optimize the way you run that business
just like you run a chiller or a boiler
or cooling tower
it really is amazing what information
you can get from having good strong
numbers
and when you start tracking those you’re
able to see if you make a
change in your business how all those
numbers are
impacted so if if you haven’t been
convinced yet to get your numbers in
order i hope this dialogue today
has helped you consider go ahead and
getting that done
today now let me ask there are a bunch
of people out there
that myself included we get continuous
emails or voicemails from people
saying hey we want to buy your company
half of them aren’t serious half of them
are fishing for market information so
when we get that phone call we get that
email
what should we do yeah that’s a great
question right
sometimes owners have a have a choice of
you know do i want to run my business or
do i want to talk to
brokers and investors all day and i
understand that the former
uh should always win and so i think the
the thing that
that folks can do kind of on a on a
near-term basis
is first just kind of go do go do a
quick five to ten minute
search on the website of that individual
right learn
about their mission their vision their
values learn about you know
is this a water person or is this
someone that’s just coming in to try and
find a business to run
um and likely will need a lot of hand
holding in order to get to a successful
place so i think that’s kind of the
first step is just
you know does this pass your bs sniff
test based on looking at the website
i think after that which will probably
help you and
and trace you know based on your
comments sounds like it’ll probably help
you weed out about 95 percent of those
people
i think then getting on a phone call for
30 minutes right
keeping it almost intentionally short
for a first call
just to allow yourself and the potential
acquirer
to or investor to introduce themselves
get a feel for them as as people
quiz them on like what do you know about
my business what do you know about my
industry and why are you reaching out to
me today
and so i think there and again this is
you know for individuals that are
looking to sell
today there’s a there’s a way of doing
things and for those that are looking to
sell 10 years from now
there’s a way of doing things as well
but i think from from my perspective
you know having the conversations with
that top five percent of potential
partners
is really helpful just kind of keeping
your rolodex or keeping your linkedin
as the individuals that you would want
to reach out to as you think about this
a little bit more seriously
down the road now during that
conversation how much information should
we
be giving to that person it depends on
how comfortable you are you know i i
come from a place where
you know a handshake is more important
than a contract
but i also understand kind of the
sensitivities around
customer relationships financial
information
so i actually i always tell owners that
i talk to to
to not share very much information at
first to
get a better feel for that potential
investor don’t tell anyone you know
your revenue or your or your ebitda or
kind of who your customers are
necessarily
upfront unless you want to of course but
wait until you kind of get a better
indication for who is the other person
on the other end of the line
and where you should start feeling more
comfortable
is once you get a non-disclosure
agreement into place
whether it’s called an nda so once you
get an nda in place with that investor
they’re kind of legally bound not to
share
any of the information that you pass
along to them so um
that’s kind of a two-step process of one
get a feel for them as a person
and then if you think it’s worth
speaking to further and you want to
share some more information to
potentially get a
kind of an estimate of what what they
might be willing to spend or pay for
your business
then make sure that you get an nda in a
place get them to sign it you counter
sign it
and then you can start sending a little
bit more information over time to them
so that they can get a better feel for
the business and maybe give you some
numbers to think about
that’s great advice i can think that
there’s probably two
top concerns on every owner’s
mind that is considering selling
one is can i get enough money for my
business so i can take care
of my family during my retirement or
whatever the next venture is going to be
and two what about all these key
employees
that have helped me build this business
how do i take care of them
yeah exactly i mean this is something
where when you run a business
over the course of decades kind of all
of your capital and
and net worth and you know frankly your
retirement fund is kind of
built into that business and so i as you
think about
you know what is the next step for me
there’s two general paths you can take
right there’s the
i’m gonna sell my entire business 100 of
it and walk away
and be able to care for for myself and
my family
number two is selling a portion of the
business or
uh even if it’s a majority or over time
selling more and more to employees
so that’s kind of a i’ll say a minority
sale to start
but as you think about you know how do i
quote unquote
you know monetize my retirement fund and
this is the age-old question
and so you know there’s there’s a couple
ways to do it one is just go out and
find
that third party financial company the
private equity fund the silmar group the
strategic of the world
um and get them to pay for your business
and you know find the right partner to
make sure that they’re going to
treat your employees well and live up to
the legacy that you’ve created
and on the on the latter part on the
minority side
there’s a lot of ways that owners can be
creative in terms of making sure that
that they will be taken care of right so
there’s
selling selling equity selling a portion
of the business
but there’s also ways where you can you
know stay on as an employee or as a
consultant if you’re if you’re
transitioning to imp to your other
employees or the next generation
there are ways that you can create
seller financing
contracts where like i said earlier you
know you’re
creating a contract where your employees
will pay you for your equity over a
period of time
from the profits of the business and
then i i guess another thing that you
know
i never really like to recommend because
depending on who the owner is they may
or may not be super comfortable with it
but
you know going out and these businesses
you know your businesses
tend to not have very much debt on them
at all you know debt is sometimes a
dirty word in our business
um but in some some places and some
times
taking on a little bit of debt to help
the business
kind of buy you out and give you some
some money to go live off of
and then pay that debt back over time
through profits that is something that
a lot of folks have had some success
with doing when those debt levels are
not too high right you have to make sure
you’re being smart about it
but does provide a way to create some
additional cash flow additional
liquidity for you to make that
transition
now what about the key employees that
people are concerned i want to keep
these key people that have helped me
build the business
employed and maybe now this person
in this company who’s selling they’re
not going to be around it’s a complete
buyout
how do they set those people up for
success yeah i mean i think this is a
this is a great question
and one that i always go back to
thinking about myself
of how do you choose the right partner
to ensure that they’re going to kind of
continue
the livelihood and the business that is
being built and run
by your employees because i think in
some respects employees
are your second family and so this goes
back to the question of you know who do
you want to select
from you know the the many different
financial partners
that are available to you and how do you
select the right partner
that is going to kind of build on your
legacy
rather than kind of build against your
legacy and so it’s a little bit of
ensuring that you have
wastewater people running the business
that you introduce them
to your employees at the right time kind
of get buy-in from the team
and ensure that even during kind of
after the sale
maybe there is kind of a several week or
several month transition process for you
to get the new owners up to speed on how
to run the business
and get the employees on board with
these are the right people to kind of
lead the next
the next phase of my company michael
when is the right time to get these key
employees
involved so they know that you are
preparing to sell
i think it depends a little bit on on
your relationship with your employees
i tend to be a pretty transparent guy
like to keep people in the loop not like
to necessarily surprise
folks that this is coming down the road
but i also understand there’s a little
bit of sensitivity
or a lot of sensitivity related to this
topic
and so i think it again it depends a
little bit on the owner
and his or her relationship with those
employees
we’ve had you know the conversations
that um that that i’ve had
a lot of owners are you know with uh you
know 10 15 employees
just kind of tell everybody hey i’m 65
i’m looking to start transitioning out
just so you know you might see some
folks coming around
kicking the tires on a you know monthly
basis just to see
who that ideal partner is and that works
well for some people
i think on the other side there’s always
the the concern from owners
that employees will leave if they see
the business being transitioned to
somebody else
or just kind of inherently skeptical and
so i think
i wish i had an answer for you trace but
i think it’s going to depend a lot on
kind of the company culture and the
owner’s relationships with employees for
when they think is the right time to to
tell folks that this something that they
are thinking about
now as people are planning for this
obviously the
further out the more organized and the
more time that they have
but how would their to-do list change
from let’s say somebody who has 10 years
that they’re looking to transition to i
need to get out tomorrow
you know i i always like to think about
this transition period in kind of a
10-year five-year and one-year process
and really getting owners ready for that
sales process
is a is a progression and i think one of
the things that that i always come back
to
kind of more from my my operational days
is
thinking through the both the financial
and the operational decisions that need
to be made
in order to have that successful sales
process
i think some owners because it’s hard to
do both
choose one or the other but when you’re
thinking about the financials right
it’s getting getting your books in order
getting your numbers in order
and it’s also about when you’re thinking
about a financial partner
getting the right cultural fit you know
all these owners out there have probably
talked to various investors that talk
about this
due diligence process right and due
diligence is when you’re thinking
through like
what does the accounting look like what
do your customer contracts look like how
do you make
business and i think something like that
gets short thrift every once in a while
is are you a good cultural fit with my
business are you going to be able to
kind of fit yourself seamlessly into
the operations of this company and grow
it over time with respect to
you know how we’ve been running for the
past three decades that’s more on the
financial side
on the operational side owners typically
are
the best water treaters the best sales
people
and the best kind of customer service
individuals at a company
and while that’s great it also kind of
lends itself to
a potential situation when that owner
departs who is going to take on that
sales
service and customer relationship piece
and so
you know as i think about it you know 10
years from retirement start
promoting employees into management
positions right
managing a business and a team is very
different
than running service on a cooling tower
it’s it’s a different half of your brain
it’s a different skill set
and begin ensuring that you’re just
doing knowledge transfer whether it’s
with
sales or treatment or chemicals to those
employees
i also think you know we are in an
industry that
has a lot of ambitious growth plan
and so when you’re 55 you’re 60 and
you’re thinking about retirement 10
years down the road
i think owners also need to think about
what is the type of business
that i want to pass along to this
investor
to this this next owner and the reason
being
is 10 years from now you know you have
to decide about what are my growth plans
you know am i going to expand
regions am i going to expand
technologies because you need to
understand the risk reward profile
for making that expansion as you think
about who that next owner will be
in a decade five years from the sale
i think beginning to more actively
transition sales and and
vendor relationships to other employees
just to try and minimize that risk of
of certain items being lost in the
shuffle getting your numbers
in order and i think really five years
for a sale is when you should start
maybe answering more of those emails
trace or having more phone calls
with the folks that are reaching out to
you in order to kind of
do start doing your own diligence on who
is the right capital partner for me
within that within that five year bucket
as well an investor
typically it’s always different but
investor typically will look at the
previous
three years of of your financials so
that
making sure that as you think about
selling five years down the road
really the three years prior to is an
especially
important piece and nowadays investors
are looking
to see you know how coveted proof is
your business is this something that
uh had a big drop off in march april may
or just something that was truly
resilient
and then one year uh you know now you
know you’ve spent nine years kind of
getting ready for this
while also running your business right
so you should have everything basically
in order
but a year from sale is really when you
need to to start reaching back out and
finding
those that right capital partner just
for the owners on on the on the
from on the podcast a typical sales
process
even when you’re ready to go is a six to
nine month process
right there there’s there’s three months
of talking to people
getting bids getting letters of intent
and then you know maybe even six months
and then once you get that letter of
intent once you kind of sign and say you
know i’m gonna bind myself to this
valuation this is interesting to me
then the owner or the new owner or the
new investor will likely want to spend
initial
two to three months really diving into
the business doing kind of a thorough
review of your financials
and your accounting and your legal
before they can truly kind of
send you a check and so just as a
reminder this is not a
next day process and opportunity but i
i think for both parties both for
yourselves and for the new investors
thinking about this as a six to nine
month process is really important
you’ve done a great job setting up the
logistics telling us about the process
do you mind telling us
a narrative about how you’ve experienced
this through one of your customers
yeah absolutely we come at this again as
kind of water and wastewater people
and so as we talk to our potential
acquisitions
you know we tend to really harp on this
concept of being water people right so
our our initial calls whether it’s a 30
minute call
45 60 minute call i’d say 95
of it is just talking water talking the
industry trying to
both get a feel for you know is this
owner looking to sell now are they just
dipping their toe in the water are they
looking to
find the right capital partner 10 years
down the road and from our perspective
i think we’re trying to show how we view
kind of the future of sylmar
as being something where we have no
desire to
you know cut employee relationships or
we have no desire
to load up companies with debt and sell
them in five years our goal is to run
healthy businesses over the course of of
decades
and so that kind of leads me to you know
how is it
like working with a third party as a
capital provider
and i think it goes back to it’s very
dependent on the type of partner you
choose right there’s like i said private
equity there’s the strategics
there’s operating partners like myself
there’s kind of the seller financing
path and your process will be very
different
across both the size of your company but
also who you choose
as a capital partner you know what i
always recommend
is there’s there’s informal processes
where you know owners just run this
themselves and then there’s formal
processes where
you always hear about investment brokers
that are kind of going and running up
a process where they’re going to bring
you a bunch of different buyers and take
on different bids
i think that’s that’s great for some of
the larger companies i mean you’ve
probably heard of some of those
companies doing that in the past
i i think candidly and honestly for the
smaller companies
you know going out and running more of
an informal process where you respond to
some of those emails or you reach out
to maybe some of the investors that that
your friends in the water treatment
space
have taken investment from in the past
and reaching out to them
is really important and so
you know how do you get started first of
all just make sure
your business is in a good place right
make sure that your accounting and your
numbers is in order
make sure that your customers are happy
if there’s any extensions
coming up on service contracts make sure
that those are in order before you start
thinking about
selling and then you know a typical
process
so i i thrown a lot around a lot of
different dates and time frames and it’s
probably a little bit confusing in some
respects but
if you think about what is the process
that i need to take
in order to get to a final signed
agreement
it’s have your initial conversations
going to get a feel for
who these investors are sign an nda i
guess i’ll repeat that sign an nda
before you start
sending sensitive information once you
sign the nda
you’ll probably get an initial list of
questions
from your investor or from the from the
folks that you’re talking to that
that range from like show me how much
revenue you have show me some customer
contracts
if you have any intellectual property or
you’re kind of having licenses for
technology they’ll probably want to see
those
and then once that happens they’ll
likely will be a document submitted
basically like an indication of interest
and this is what investors just said
it’s like a fancy term for basically
saying i’m going to send you a document
that says
based on all the information i have
today this is
what i think is a range of valuations
for your business
right so you can go lower it can go
higher just based on
once they do their more full deep dive
into into your document
once that happens if you choose to move
forward after that point right if you
think you’re getting a fair
a fair shake and a fair price then
people will these investors likely will
come
to your to your office have what are
called management meetings basically you
know
kicking the tires talking to employees
if that’s something you’re comfortable
with
getting a better feel for you know what
is the actual space and making sure
frankly it’s a
it’s a real business a real company and
then after that
you get your letter of intent which
provides basically a you know this is
the number
i as an investor i’m willing to pay for
this business
and if that is something that you’re
comfortable with i think is a fair shake
then there’s uh you know you sign that
and essentially have 60 to 90 days
with that investor to have exclusivity
to do kind of a more thorough
legal financial accounting uh due
diligence process
before the final agreement and check is
signed
so that that is a i’ll say a rough
process right
every every diligence process is going
to be a little bit different but as you
are thinking as an owner about
what are the steps that i need to take
uh i think that’s a good summation
for uh for your reference in the back
your head i can’t help but thinking
there’s probably some service
technicians listening to this episode
and this can make them nervous
what can we say to them so they can feel
more powered in this situation
first and foremost you’re not alone this
industry
is chock full of people who came up
in the water space in the 70s and 80s
and i think everyone right now is trying
to figure out not if they
should retire but how and so in many
cases you know these businesses
have been your you know your your second
marriage or your baby your legacy for
the past several decades
and you’re looking for someone that is
going to be a good partner
that i think kind of needs to check off
three boxes right you want someone
that’s not going to run your business in
the ground
you want someone that’s going to respect
your customers and you want someone
that’s going to
grow the business the message that i put
forward is
it’s a hard process to find that right
partner but it shouldn’t be scary
because i think it always comes back to
you don’t have to make a decision
you don’t want to make and if you don’t
think that this is the right financial
partner
you should walk away and you should
continue looking or take a step back and
reassess how you want to find that
partner
and frankly i think there are enough
folks in the water treatment space
that have been through this process that
you’ve run into an
awt conference in the past that can
probably give you some really good
advice i mean
frankly you’re all welcome to reach out
to me for just some uh
you know hopefully unbiased advice as
well but i think
the key takeaway is you don’t have to do
anything you want to do find the right
partner spend the right time
and that will lead you to the best
result do you ever think we’ll see
a water treatment company being pitched
on shark tank
i’ve been waiting for it i i i think
mark cuban would be an excellent partner
i agree but i’m not so sure if someone
wants to find out more information about
you
where should they go first go to my
website
www.sylmargrp.com
for silmar group it’s s’s and sam y l
amazon michael a r
so feel free to to go to my website my
email address and my partner’s
email address is there feel free to
reach out at any time i’ll make sure to
have that on my show notes page
great information on today’s episode i
do have a few
more questions for you left if you’re
ready for the lightning round
i can’t wait all right so i asked these
questions of all my guests and then of
course members of the scale up nation
get to wager to see how well that my
guests do
so no pressure at all first question uh
you’ve heard me ask it i’m going to ask
it to you in two ways because
you’ve been a water treater and now
you’re somebody that
helps find the the the right
way for somebody to transition their
company so my question is you can go
back to your first day one as a water
trader
and then as your first day as doing what
you’re doing now
what advice would you give yourself
respectively
ah that’s a great question and actually
i’m gonna say it’s the same answer for
both
my advice to you know my you know 20
year old self
is just talk to everybody
i didn’t grow up in the industry right
and a lot of water treaters did but
from my perspective i didn’t grow up my
you know my folks were in the healthcare
space
um and i think i have learned far more
from just picking up the phone or
reaching out on an email or reaching out
on linkedin
to water treaters than i’ve learned
ever in a classroom or even in my kind
of day-to-day
work life i always kind of go back to
i’ve asked a lot of stupid questions in
my life but i’ve been stupid to not ask
questions a lot of times as well
and so i think i i would just say you
know make sure
you’re learning from the people with
more experience than yourself
because doing so is going to be
basically provide you with the biggest
benefit that you can get
what are the last few books that you’ve
read okay uh
i read angle of repose by
wallace stegner which won a couple book
awards
i was actually i was actually camping
with my
wife in colorado in july and was looking
for
just kind of a book on the west and went
into a bookstore and and said those
words and
the bookshop owner basically said you
need to read angle over pose so
highly recommend it’s not a quick read
but it’s a it’s a fascinating book just
on
on kind of the expansion into the west
put on my
my water hat i read the source
which is a book that was written by
martin doyle who’s a professor
at the duke nicholas school for the
environment he’s actually
someone that i’ve had a a long
relationship with and
he’s actually an advisor to sylmar but
the source basically tries to explore
the relationship between humans and
water
over the past several hundred years with
a couple of different
examples which i think that was really
good and then before that
actually i’ll kind of just refer back to
my kansas self
i read a book called heartland by sarah
smarsh
and it’s an autobiography by i think she
was actually
running for office at a certain point
but it’s about a woman who
kind of grew up on a farm just outside
of wichita
kansas and just kind of her path of
growing up her relationships with her
parents and grandparents and and just
kind of the midwestern life which um you
know i always like to read about
when they make a movie about your life
who plays you other than you choice
i didn’t know i was up for that role no
i i’ll say um i
uh i love for whatever reason i love the
movie the social network
about the rise of facebook and so i
always used to make a joke that one day
they’ll make a movie called the water
network
obviously after i get on shark tank um
so
so would love uh jesse eisenberg to play
me
if he’s not too old at that point there
you go and then my uh
my almost last question because i wrote
a special bonus question just for you
you now have the ability to go back in
time and speak with anybody you would
like throughout history
who to be with and why it’s a good
question there’s a lot of presidents and
international leaders that i think would
be interesting but
i think my mind first goes to
you know i’ve always kind of thought of
myself as someone who kind of likes to
take risks go places where
other folks won’t go like i said i
bought myself a one-way ticket to china
to start my career
and so i actually i think the person
that i think would be the most
fascinating would be
neil armstrong i love the idea of
exploring new things both kind of
literally or figuratively
stepping into a place that no one’s been
before kind of like the conquistadors or
explorers of the past
and so i think neil armstrong going to
the moon
really kind of personified a special
form of bravery
both in terms of just like his own risk
that he took
but also in terms of you know doing
something that would help
move humanity forward so if you uh made
me guess
say anybody i think that would be the
first conversation i’d love to have
i love that answer he is one of my
heroes i was actually able to hear him
speak at the huntsville rocket center
once
and just a culmination of humbleness
and brilliance just an incredible person
couldn’t say it better myself absolutely
well here’s my bonus question for you so
since you are fluent in chinese
and there are listeners of the scaling
up nation
over in china how do you say
thank you for listening to scaling up
h2o
i’ll have to take your word for it
michael thank you so much for coming on
the show i know we’ve helped a lot of
people today
and thanks for all your knowledge
trace thanks again for having me looking
forward to talking with folks and and
providing that unbiased advice if or
when they need it
and uh thanks again for having me on the
show it was a pleasure
nation there’s just so much you need to
know when you are
looking at the next act of
your life and let me say
that i’m not ready for the second act
yet i mentioned at the top of the show
but all this information i use and i’m
getting ready
so that way i know when i am ready i i
get better information so i can make
better decisions
i do know that there are many many
companies out there
that are looking to transition
the ownership of their company and
that’s why i wanted to make sure that i
got this episode out
in 2020 i also know by
working with several water treatment
companies as a consultant and helping
them work
with their numbers that many of the
companies out there
simply do not have a plan
they do not know what they need to know
to
navigate through all the decisions that
they need to make
when it’s time to sell their companies
and there’s a proverb that states the
best time to plant a tree was 10 years
ago
the second best time is today so
with that what can you do to start
getting your finances in order
you know something that one of my
mentors taught me years ago
was he wanted me to have an answer to
what my magic
number is now this isn’t the number that
you play
in the lottery this is the number that
if somebody
were to offer you this
amount of money for your company you
would say
you are on target we need to have this
conversation
now we still need to make sure that the
company that’s buying your company is a
cultural
fit but just think if you had all this
information in your head and you knew
what that number was and somebody was
close to it
that’s a conversation that you are going
to want to start
knowing this magic number allows you to
make all
sorts of decisions not just am i going
to talk to this person about buying my
company
but years before selling your company
it allows you to make decisions on
how you’re going to grow what equipment
you’re going to
acquire what people you are going to
hire because you know
what this company what the number needs
in order for you
to move on to the second act when a
company says they want to buy you or an
employee comes to you and says
i would like to buy you out you now have
the framework to have those
conversations
i cannot stress enough how important it
is
to get your financials in order today
i mentioned in the interview i work with
a lot of water treatment companies
helping them become
better water treatment companies and i
am
so surprised at how many water treatment
company owners
run their companies out of their
checkbook they figure they’ve got money
in their checking account
so they know that they can buy things
they can make payroll folks there’s so
much more that your accounting that your
numbers can tell you
that will give you solid information
about exactly what’s happening
with your company that allow you to make
decisions
on that information now imagine if you
were at a ball game
and they weren’t keeping score no stats
how boring would that be well a lot of
us
are running our companies that way and
folks if
you are doing that you are not
navigating
through all of the information that you
should have you’re making guesses and
maybe you’re getting lucky sometime
but why risk that when you have all of
that information
in line you can make better decisions
and if gi joe taught us
anything he taught us that knowing is
half the battle
and the more we know the better
decisions that we are going to make
and i know from working with companies
that when we start talking about
financials
some people just gloss over and they
stop
listening we all know that the better
financials we have the better we can
make decisions but when we’re the ones
that
have to do that a lot of us don’t like
that i’m going to be the first to admit
i am not wired correctly i love
financial data i love data of all types
because it gives me information
that i can do something with i can then
change one of the inputs
via one of the decisions that i’m going
to make and i can see what the result is
going to be
based on that but i know not everybody
out there is like me
so having someone on your team
that can do that kind of stuff is key
and i want to stress a lot of times when
you are the owner of a business
you feel like you have to be everything
to everybody
and folks that is not the case figure
out what you are good at
figure out what you do better than
anybody else and if you
stay in that sweet spot you are going to
lead
your company and your people to
tremendous
success but what that means is you
also need people to help you with your
blind spots
and it’s okay to have them if you have
people
that can do the work that you can’t
and that’s why you align yourself with
individuals that are skilled in the
areas that you aren’t
and that’s why i have a part-time cfo
on my staff and that’s right i said a
part-time cfo i don’t think
it is a position for our company size
that merits having somebody on our
payroll for
full time however the wisdom that i get
from this individual that all
he does is numbers folks he sees things
that i
am never going to see and he does not
live in atlanta he is not staffed in our
office he logs in remotely he has access
to
our financials and on a regular basis
i meet with him to learn more about the
numbers that i’m actually producing and
it is amazing
what he can see the things he can point
out the things he can forecast
and by knowing these numbers and sharing
those things with me
i am able to make better decisions he
might actually
see something that i would have never
seen
give me some advice and that is that one
domino
that’s gonna knock all the other
dominoes down
i can’t tell you how awesome that
relationship
is so if you’re interested in something
like that i know it can be scary because
i have gone through it so here’s what
i’ve done i’ve created a trusted
advisors
network and on that trusted advisors
network you can see i
have some part-time cfos that can do the
same
services for you because they’re doing
them for me
now with that i’ve worked with them i’ve
explained to them some ins and out of
the water treatment industry
so they have a basic understanding of
what it is that we do
what it is that we need help for and i
have vetted these people out
for you to make the process a little bit
easier
let’s face it this is scary i’m trying
to take some of the scare out of it
so if this is something that sounds
interesting to you
you can go to scaling up h2o.com forward
slash
t a as in trusted advisor
again that’s scaling up h2o.com forward
slash
ta and you can see the individuals that
i
am working with to see if they could be
a good
fit for you now if you are working with
somebody like this and you are getting
all this information together you will
know when the right person comes along
when the right deal comes along
and if it is time to sell you’ll have
all your ducks in a row and you’ll be
able to make
better decisions now let me talk to the
people out there that
don’t own the companies you work for
and folks let me tell you you are the
backbone of those companies and i know
the podcast today could be a little bit
scary
but i don’t want you to look at that
because everybody
will retire eventually i know you have
dreams
of retiring but maybe you also have
dreams
of buying the company that you work for
now i’ve consulted with companies and
normally when i do i ask people what
their exit strategy
is and they say well they hope to sell
the company i’ll ask them
who they’re going to sell it to they
don’t know i ask them if they have any
employees they say
they don’t know now the funny thing is
is when i
talk to other employees i’ll then find
out that they have dreams
of owning the company someday but those
two
parties never came together so they’re
never going to accomplish that goal
so i’m going to ask you to take the
first step
and let your boss know that hey someday
i don’t know if it’s possible i don’t
know how to do it but i would like to
work
with you to see could i possibly
purchase this company someday and if you
guys are both
working to the same goal
it’s amazing of all the things that
will come together so i know that’s a
scary step but if it is something that
interests you
you need to take that step because
eventually
you may not be able to take that step
it’s going to be
too late i mentioned on last week’s
episode that we
have a lot of new things planned for you
in 2021 i’m so excited about all this
stuff i know you guys are going to love
it
a lot of them came from ideas from you
the scaling up nation so
thank you for that and as always keep
those coming
but we also have a lot of things that we
did
this year in 2020 that worked pretty
well and we’re going to keep
those things around one of those items
was the hang we started doing the after
hours hang as the solution of how we
were going to network
with the awt since we weren’t going to
be
in person and we had hundreds of people
join in
on the after hours hang where we talked
a little bit about the convention
and we also got to meet new people
it was great i got a lot of positive
feedback
i got positive feedback from the
association of water technologies and
they said trace can you and your team
help us make this a regular thing of
course we said yes
we just had one two weeks ago it was
equally successful and we’re going to
have another
one coming up january 14th so mark your
calendars
january 14th at 6 p.m eastern time
now you might be wondering what
you need to do to register for the hang
well it’s very easy you go to scaling up
h2o.com forward slash hang h-a-n-g
you register you will get an email
and then you click on that email and it
goes right into your calendar
with all of the login credentials
folks we use zoom we all meet in a big
room i do a couple of things to try to
entertain you
for a few moments i’ll let you know a
couple things about what’s going on in
the water treatment community
and then i give you some instructions i
give you a couple of questions that you
are going to
ask to your new group and
i will get you started with uh maybe
even uh
an icebreaker if you will then i will
put you
into about five people in each group
where you can introduce yourself figure
out what everybody does
ask each other the questions that i have
laid out for you
and folks the cool thing is is you’re
going to meet
new people in your industry maybe
someone that can help you with an
issue that you’ve been having so i urge
you to go to scaling up h2o.com
forward slash hang to register
for the next hang which will be january
14th
at 6 00 pm i would love to see you there
another new thing that we are doing next
year is we
are working with the awt to provide
quarterly
special business owner related webinars
now due to the restrictions on the
meetings that we have with covet
we’re not allowed to get so many people
in particular rooms in certain areas so
the awt decided they are not
hosting the business owners meeting as
they regularly do
in first quarter they’re going to do it
the day before
the annual convention now in speaking
with many of you out there in the scale
up nation i know that many of you look
forward to being at this owner’s
meeting the first quarter of every year
so awt the association of water
technologies and my staff got together
and we have decided that every quarter
we are going to conduct
together a special business owners
webinar where we are going to give you
special business owners topics each
and every quarter now these are going to
be topics on things about
your health your business health your
team’s health
alignment with your team and even a
special
workshop designed to get your financial
numbers
better so a lot of things that we talked
about here today
we’re going to take you through a
workshop so you can do that very thing
in fact
i have invited michael to come back and
lead one of those workshops to talk
about
how do we evaluate our companies it’s
great when we’re going through the
process but what if we were to do it
right now
and then we were able to make better
decisions
on all of the things that we have to
make decisions on
as business owners so i promise each and
every webinar
will include something that will bring
your
company further faster it will have
something that you can take away with
you
so you can immediately put into action
i know that these webinars are going to
help
make your 2021 one of the best years
ever i’m so excited about 2021
but there’s still plenty of 2020 to
enjoy
and i really hope that you make the most
of the weeks that we have left
in 2020 next week’s episode is a
special episode it will be released on
christmas so
merry christmas scaling up nation i hope
you have had a great year i hope you
have a merry christmas
and i hope you have a great week take
care everybody
nation i know many of you have gone to
the scaling up h2o.com forward slash
mastermind page
and see that our cost is maybe a
deterrent
well folks i want to let you know about
some of the benefits that you
get from being a member of the rising
tide
mastermind and instead of me telling you
about that
i’m going to have my friend jill cavano
tell you about
her experience the value that i’ve
gotten out of the rising tide mastermind
has been 10-fold
initially like i said i wasn’t sure it
was going to be worth the time or the
money
i couldn’t have been more wrong the
value that i’ve gotten out of it
is not feeling so isolated as a small
business owner
especially during this year of 2020
i’ve gotten friendships out of it
networking opportunities
and we’ve read a lot of books together
and worked on a lot of
topics that were near and dear to
people’s hearts and i’ve gotten a lot of
personal growth
i’ve gotten ideas for my business how to
make it better and more profitable
and it’s also nice because everyone
thinks that they
are the only one with a certain problem
and i’ve learned that i am not the only
one so anytime anyone brings an issue to
the group for us to discuss
you know that could very well have been
an issue that i wanted to discuss
so i like being able to give people
advice and i can also use the advice
for myself scaling up nation there’s no
doubt about
it being a member of the rising tide
mastermind
is an investment it’s an investment in
money but it’s also an
investment in time as you just heard
from
jill if you are a member of the rising
tide mastermind and you do
all the things that you are supposed to
be doing as
a member the cost becomes
negligible in fact it pays for
itself now you do have to manage your
time
but one of the things that we will talk
about is making sure you’re keeping a
proper
calendar and folks when you can schedule
something you can plan for something
you can get those things done
so is the rising tide mastermind the
right group for you
well i don’t know but i hope you will
investigate it to see
if it is and you can do that by going to
scaling up h2o.com
forward slash mastermind you can read
about the mastermind group and if that
sounds like
something you want to be a part of go
ahead and click the apply button
and you can set up a call with me where
we can talk about specifics
about you becoming a member of the
rising tide
mastermind
you