WCG Bizcast

Bourbon and Business | Business Financial Planning Part 2

Episode Summary

Jason Watson, CPA, sits down with Bud Rainsberger of RWA Partners in Colorado Springs to continue their discussion about when, why, and how to sell your small business.

Episode Notes

In this second segment on Business Financial Planning, Jason Watson, CPA, sits down with Bud Rainsberger of RWA Partners in Colorado Springs to continue their discussion about when, why, and how to sell your small business. Bud explains the importance of understanding your motivation for selling, and, he touches on the emotionality of the decision and how it can impact your personal and professional life going forward. Special thanks go to Axe and the Oak Distillery for graciously hosting our Bourbon and Business podcast series! This material is based on content from our website and our book, Taxpayer’s Comprehensive Guide to LLCs and S Corps. 

This material is based on content from our website and our book, Taxpayer’s Comprehensive Guide to LLCs and S Corps. 

https://wcginc.com/kb/operating-agree...

https://wcginc.com/book


Thank you! 

Warm Regards, 

WCG Inc. (formerly Watson CPA Group) 
2393 Flying Horse Club Drive 
Colorado Springs, CO 80921 

719-387-9800 phone 
719-345-2100 text message 
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Episode Transcription

00;00;14;18 [Jason]: All right. Welcome. My name's Jason Watson with WCG

Incorporated, we're a local tax and accounting firm here in Colorado

Springs. I am alongside Bud Rainsberger of RWA Partners, a

Registered Investment Advisor firm here in Colorado Springs. In our

previous segment, on our Bourbon and Business tour, we

discussed

00;00;33;19 kind of financial planning in general and then some of the extra stuff

that needs to be taken care of for business owners. You know,

when to sell the business, when not to sell the business, how

00;00;46;12 much cash are you taken out of the business, how personal

interests can compete with business interests and all those things.

And that's a great video and, and podcast that we would encourage

you to go view and listen, as well. This time around, oh, I want to

make sure that everyone understands that

00;01;02;15 we're being hosted by Axe and the Oak, here in Colorado Springs.

They've been gracious enough to open up their bar so that's why

it's Bourbon and Business, and I'm sipping on some nice Axe and

the Oak bourbon

00;01;13;20 right here as well. And a couple more of those, I think we'll allow

any tax deduction.

00;01;17;15 [Bud]: Well, you know as a guest I can't quite imbibe yet, but I'm

looking forward to the after interview.

00;01;22;12 [Jason]: I'm doing, I'm doing the Coyote Ugly, I'm just holding it to

my lips, not actually taking a sip. So anyway, in this segment we

want to discuss selling your business and, and some of the aspects

there. And we kind of touched on this a little bit again in our last

segment but

00;01;38;01 maybe kind of give, give our viewers and listeners an overview of

some of the things just out of the gate that you discuss when a guy

goes, "Hey", or a gal doesn't matter, she shows up and says, "I

want to sell."

00;01;49;07 [Bud]: Right. So, you know, traditionally we have a built-in

relationship so we know quite a bit about our client.

00;01;57;14 [Jason]: Okay.

00;01;57;20 [Bud]: And we know a lot about the business as well as the

personal and so its a natural for them to come and, and you know,

give us a holler and say, "Hey, I'm thinking about selling.". But in

many cases we're, we're actively planning for it, right? So we're in

the planning stage. It's just when somebody shows up with an open

checkbook, all of a sudden

00;02;16;01 you start thinking about the possibilities.

00;02;18;10 [Jason]: Right.

00;02;18;27 [Bud]: And, you know, in many times you've already spent the

money before .

00;02;23;16 [Jason]: I was going to say yeah, yeah, you've already spent the

money. I'm paying off the house, I'm getting a car I wanted.

00;02;27;03 [Bud]: So we're trying to, you know, go, you know, take a step back

and say, what's your motivation for selling?

00;02;32;08 [Jason]: Right.

00;02;32;18 [Bud]: What, what are we trying to accomplish here? Is it health? Is

it family? Is, is it economics? You know, what really, what are the

driving factors?

00;02;40;29 [Jason]: Sometimes it's just that phone call came in and it surprised

you.

00;02;43;19 [Bud]: Right.

00;02;43;24 [Jason]: And then the dollar signs, you know?

00;02;45;13 [Bud]: I, I find the good businessmen and women, who are

watching their industry get a, a pretty good feel for what their, their

business is worth.

00;02;54;23 [Jason]: Sure.

00;02;55;02 [Bud]: On a, you know, general basis, you know, it's a multiple of

NOI or something like that. And so they kind of have an idea of the

value that they're creating.

00;03;03;00 [Jason]: Right.

00;03;03;11 [Bud]: And, and, and it, and it builds over time. And you, you do say,

you know, when it gets to X I'm going to really, you know, take a

hard look at that.

00;03;10;29 [Bud]: So we got a call last week, for example, and the clients go,

well, we didn't think we'd get, get there this soon but we got a call

and they're dangling some real money in front of us and, and we're

really interested. So we sat down with them and I said, Okay, what

are they offering? They said, well, 12 million.

00;03;25;15 I go, well that's a good number. You know, simple lifestyle. They're

very charitable. They're thinking about, you know, they've done

some things in terms of volunteering around the world for charitable

causes and, and they're young

00;03;38;28 enough where they can really go out and do that.

00;03;41;16 [Jason]: Sure.

00;03;41;21 [Bud]: And so it really has peaked their interest.

00;03;44;18 [Jason]: Yeah.

00;03;45;12 [Bud]: And you know, to the point where we go, we think we're

going to go through the pain of going through this process and

seeing just how legitimate is that offer?

00;03;53;07 [Jason]: Right.

00;03;53;20 [Bud]: Does, do they really have the money.

00;03;55;19 [Jason]: Right.

00;03;55;24 [Bud]: To do the deal?

00;03;56;15 [Jason]: But even to take a step backwards

00;03;58;28 [Bud]: Yeah.

00;04;00;07 [Jason]: Twelve sounds like a big number, 12 million, right? But is it

the right number? Maybe it's worth 15, maybe you're shortchanging

yourself, you know? May, you know, so those

00;04;09;24 [Bud]: Right.

00;04;10;28 [Jason]: Sometimes

00;04;11;12 [Bud]: The matrix, right?

00;04;11;27 [Jason]: Yeah, sometimes the adding gets a little bit crazy because

you think this is sunset money, right? I can take this and ride into

the sunset.

00;04;18;12 [Bud]: Right.

00;04;18;21 [Jason]: Well, you should go get 15 if it's really worth 15.

00;04;21;29 [Bud]: Right.

00;04;22;13 [Jason]: You know.

00;04;23;18 [Bud]: And the deal structure, right? You know, so it's 8 million cash,

and it's 3 million in a note.

00;04;28;12 [Bud]: And so you go, okay, well what's the 3 million now? Does it

pay any interest? Well, no, I go, okay, well that's a negative. So,

how much background do they have managing a business like

yours?

00;04;39;02 [Jason]: Right.

00;04;39;07 [Bud]: Well, not a lot, but they are, you know, coming out of

Stanford and they got all this money and trying to put it to work. And

I go, well, you might think about taking all cash rather than some

note on the back end.

00;04;50;25 [Jason]: Right.

00;04;51;05 [Bud]: And, and some things like that. So we're just kind of

evaluating, you know, like you said, all the, the things that could

come into play

00;04;58;13 [Jason]: Okay.

00;04;58;21 [Bud]: Which is different, you know, for every, every business

opportunity that we've looked at. And I've, I've been through it in my

own firm, right?

00;05;05;02 [Jason]: Sure.

00;05;05;14 [Bud]: So we've had the pitches from firms around the country, and,

and have, and played the dance

00;05;11;23 [Jason]: Yeah.

00;05;13;00 [Bud]: And, and so forth, so we have a really good idea what that

looks like. And of course the cultural fits and, you know, good things

like that.

00;05;18;28 [Jason]: Yeah, no, it's huge.

00;05;19;18 [Bud]: They want you to stick around and you know, where are they

going to pay you to do that?

00;05;22;20 [Jason]: Yeah. It's all about managing risk.

00;05;24;29 [Bud]: Right.

00;05;25;10 [Jason]: And in a theoretical world, if we have unlimited time on

earth, we can assume unlimited risk, right? And probably when

you're 25 years old, unlimited risk is almost the same as, you know,

unlimited time. But when you're 55, when you're 60, no, time is now

very, very, you know,

00;05;41;29 very much limited.

00;05;42;28 [Bud]: Right.

00;05;43;05 [Jason]: So risk has to be managed, you know? So where I was

going with that is yeah, you have a, you know, $12 million cash

offer, you have a $15 million offer with let's say 10 in cash and five

00;05;57;13 as a note. What's the risk that you're taking on?

00;06;01;08 [Bud]: Right.

00;06;01;27 [Jason]: And if you are taking on somebody who, because now

you're in bed with this new buyer, right, wrong or indifferent.

00;06;09;14 [Bud]: Right.

00;06;09;20 [Jason]: You are tethered at the hip

00;06;11;18 [Bud]: For some

00;06;12;10 [Jason]: Your success depends on their success.

00;06;14;26 [Bud]: Right.

00;06;15;01 [Jason]: You know, especially if you're not collateralizing that 5

million

00;06;19;21 [Bud]: Right.

00;06;19;29 [Jason]: With much other than blue sky and future cash. So you

have to weigh all that in.

00;06;25;18 [Bud]: Absolutely. You know, what's the liquidity on that note and

things like that. And you know, every deal seems to be different.

00;06;31;16 [Jason]: Oh yeah.

00;06;32;03 [Bud]: And like we were talking about from a financial planning

perspective, we want to go back and validate, you know, what kind

of lifestyle do I have to support with whatever's leftover on an after

tax basis. And, you know, risk is, is something that, you don't mind

doing as long as

00;06;49;10 you're working.

00;06;50;06 [Jason]: Sure.

00;06;50;18 [Bud]: So all of a sudden, you know, making, you know, 2 or 3% in

a safer environment isn't very sexy or exciting, but that might be the

right thing. And so what does that really do for me?

00;07;01;13 [Jason]: Right.

00;07;01;24 [Bud]: If I'm spending 600,000 a year and I need a 200,000 a year,

you know, that's what I can get from the assets today? It's a

different story.

00;07;10;00 [Jason]: Right.

00;07;10;17 [Bud]: We're trying to validate, you know, does it make good sense

to do that?

00;07;13;05 [Jason]: Right. Yeah. We talked about that earlier, in another

segment about selling too soon.

00;07;16;13 [Bud]: Right.

00;07;16;23 [Jason]: Right. You know, given someone's burn rate, or their a,

inability to adjust lifestyle.

00;07;22;17 [Bud]: Right.

00;07;22;23 [Jason]: Especially that dramatically. I mean, going from 400,000 a

year to 150,000 a year is a big deal. Going from 400 to 350 yeah,

maybe you just don't take as many trips to Fiji.

00;07;34;03 [Bud]: Right.

00;07;34;09 [Jason]: You know, but

00;07;35;14 [Bud]: I mean most of us, we would say, Hey, I can live on 100,000

a year.

00;07;39;06 [Jason]: Right.

00;07;39;21 [Bud]: You know, why are you complaining about 500,000 a year?

You know, we don't maybe necessarily run in that circle, but it's as

real to them as it is to us.

00;07;46;26 [Jason]: Oh yeah.

00;07;47;08 [Bud]: You know

00;07;47;22 [Jason]: Oh for sure.

00;07;48;12 [Bud]: You know, if you're, I think, you know, for me, I've always

said Plan F is a trailer in Scott City, Kansas because you could live

really, really cheap in Scott City, Kansas and, and nobody really

cares. But really that's not what we're planning to do.

00;08;02;18 [Jason]: Right. No. For sure. All right, so let's say we have

somebody who says, I want to sell my business. I don't have this

person waving a big check in my face. So, I have some years

ahead of me to whip things into shape.

00;08;16;14 What kind of things are you whipping into shape?

00;08;18;27 [Bud]: Well, that's where really bringing in the accountant makes

perfect sense, right? You know, and hopefully there's, you know,

maybe in the business there's a controller or something.

00;08;27;21 [Bud]: I mean, many times the business owner is reluctant to share

a lot of the things going on with the controller that they're really

trying to achieve.

00;08;34;22 [Jason]: Sure.

00;08;35;07 [Bud]: So figuring out how

00;08;37;06 [Jason]: How privacy comes into play.

00;08;37;19 [Bud]: That relationship is, you know, privacy and knowledge. And

then, you know, bringing in the accountant and they go, okay,

here's what we're trying to achieve. What do you see happening?

And, and where can we make those, you know, reduce expenses or

headcount,

00;08;52;22 things like that that we're trying to, I don't want to say, you know, put

lipstick on a pig, but how do we kind of build up this business ready

to sell?

00;09;01;07 [Jason]: Kinda lean it out.

00;09;02;03 [Bud]: Absolutely.

00;09;02;25 [Jason]: Let's, let's, let's take some of the owner you know,

Perclocets, the perks and lets

00;09;06;14 [Bud]: At least know what they are so I can add them back at time

of sale, right?

00;09;10;16 [Jason]: Correct. And clearly identify them without telling

somebody, Oh, just add 50,000 onto my discretionary

00;09;17;15 [Bud]: Right.

00;09;17;24 [Jason]: Cash flow. That's kind of what I pull out on the side

between meals, cars.

00;09;22;24 [Bud]: I can't say anything because I'm a business owner and I do

that, right?

00;09;25;14 [Jason]: Exactly. So, so yeah, we have to set that up because if

you're buying someone's future cash, you have to show them

there's all kinds of cash available.

00;09;33;18 [Bud]: Right.

00;09;33;26 [Jason]: And you can project that.

00;09;35;10 [Bud]: Mutiple cash flow, right? So if I can find an extra 50,000 or

cash flow and I'm getting a 6 or 8X, that's worth some real money.

00;09;40;25 [Jason]: Totally. Exactly. So I agree. So we have to whip these

business owners into shape.

00;09;46;03 [Jason]: We have to probably pull some of those personal, quasi

business transactions out of the business.

00;09;51;12 [Bud]: Right.

00;09;51;27 [Jason]: You know, and normalize some of your data. Maybe you

own the building and the rent is a little too high, maybe the rent's a

little too low, whatever.

00;10;01;02 [Bud]: Yeah.

00;10;01;04 [Jason]: A lot of normalization of those kind of expenses to arrive,

and we want to do that today so that five years from now it's good

history, you know? It's funny when I see financials or tax returns

and they just take a left

00;10;16;10 turn or a right turn, whatever. And all of a sudden they're making a

way, way more money, you know, than they ever have. And

revenue's the same, right?

00;10;23;05 [Bud]: Right.

00;10;23;26 [Jason]: Yeah, they, they haven't squeezed a bunch of nickels out of

this thing, they just changed their financials a little bit. Not cooked

the books but just identified clearly shareholder distribution.

00;10;35;08 [Bud]: You mean, got a conscience or what?

00;10;36;01 [Jason]: Exactly. But it's like oh, you're looking to sell.

00;10;38;15 [Bud]: Right.

00;10;38;21 [Jason]: You know, your, you're trying to lean this business out and,

and have every dollar be completely accounted for and not have

the murky dollars in there.

00;10;47;14 [Bud]: Right.

00;10;47;22 [Jason]: That buyers don't want to pay you for but you certainly

want to get paid for it because it's cash that you're using to support

your lifestyle that a new owner could do as well.

00;10;57;24 [Bud]: Right. And that's, you know, just trying to figure out what

those are and, and clean that up as you say, and then get, maybe

probably a more realistic valuation number.

00;11;07;08 [Jason]: Yep.

00;11;07;26 [Bud]: And then actually have to take that on the personal side and

say, well, you know I was running a car lease and a, you know, a lot

of lunches and some travel and so forth that I'm going to, if I'm

going to keep doing that, I got to add it to my personal expense

side, right?

00;11;22;25 [Jason]: Totally.

00;11;23;02 [Bud]: And so if that's 20 or 30 Grand and I haven't, and I don't have

it in my budget, and we're trying to validate what is it going to cost

you to live, we need to make sure that that number gets moved

over.

00;11;32;22 [Jason]: That's a great observation and one that I don't see very

often either is where, yeah, if we are taking a bunch of money out

of this business and we are trying to pretend this family budget is

what it is

00;11;45;07 [Bud]: Right.

00;11;45;12 [Jason]: We have to adjust that new family budget.

00;11;48;05 [Bud]: Right.

00;11;48;08 [Jason]: To account for those quasi dollars, if you will, this quasi

deductions that are, are maybe gray

00;11;54;01 [Bud]: Right.

00;11;54;17 [Jason]: Between, between you know, a tax deduction and

distributions.

00;11;58;13 [Bud]: And you know, so you're going to have to make some

decisions. I really don't want to help pay for all my Flying Horse

expenses.

00;12;05;16 [Jason]: Yeah.

00;12;06;04 [Bud]: To the extent I bribed my accountant to do that. No. Is this

being recorded somewhere? I mean, you know.

00;12;11;12 [Jason]: For our listeners and viewers, Flying Horse is a, is a, is a

golf community up in Northern Colorado Springs.

00;12;19;00 [Bud]: Right. Right.

00;12;19;08 [Jason]: Which we're actually building a new office in so there's

some irony there.

00;12;21;16 [Bud]: It's going to look great and I can't wait to see it.

00;12;23;26 [Jason]: One of the things you also mentioned too is not just, you

know, cleaning up the books and the tax returns, but just you know,

cleaning up some of your longterm obligations.

00;12;30;18 [Bud]: Right.

00;12;30;27 [Jason]: And liabilities. Do we have some, because that's a part of

due diligence when I help somebody buy a business is I go, Hey is

there any off, off balance sheet contractual obligations that we need

to be aware of.

00;12;43;06 [Bud]: Right.

00;12;43;12 [Jason]: If, if, do you owe some, some manager a bonus?

00;12;47;25 [Bud]: Right.

00;12;48;01 [Jason]: That's going to come bite me in the butt because now I'm

the one paying the bonus, you know.

00;12;52;14 [Bud]: Right.

00;12;52;20 [Jason]: All those things. You want to probably get some of that stuff

cleaned up.

00;12;56;07 [Bud]: Yeah, I think in a way I mentioned, you know one of our

clients sold their business in, in Chicago area and you know, it, it

was probably as, had all of the complications you can think of,

right? He owned real estate, he owned equipment personally. He

had a partner that, you know, was no longer there that owned 10%,

that

00;13;14;20 he had to figure out what his distribution would look like and when

do you pay it, pre or post, you know, and do I want to own the real

estate or do I want to sell the real estate? You got to have that as a

separate transaction.

00;13;25;18 [Jason]: Right.

00;13;26;01 [Bud]: Things like that. And so we went through a lot of variables to

get to a point where we kind of added up the different pieces and

thought, okay, that was a deal that, that he could live with.

00;13;36;14 [Jason]: That's awesome. It, that is tough when you start to chop it

up, where you have like the silent investor. What do you want to do

with that individual?

00;13;46;25 [Bud]: Right.

00;13;47;00 [Jason]: You know, is there a wholesale clause in their Buy Sell

Agreement and what's the valuation? Did they get 10% or is it, hey,

do we discount that for lack of control.

00;13;58;00 [Bud]: Right.

00;13;58;03 [Jason]: And lack of marketablility?

00;13;59;00 [Bud]: And a lot of time it's planning for 3 years from now, you know.

Maybe I should buy out my silent partner now at a known price with

the expectation that if I grow at 20% a year for the next 3 years, I

really

00;14;10;10 don't want to share that future growth with a silent partner. Not

trying to be mean or cruel or anything, but you know, maybe it

makes it sense to buy that person out, replace that with some debt.

00;14;23;13 [Jason]: Yep.

00;14;23;18 [Bud]: You know, that doesn't have an equity participation. And you

know, those are all part of that, that process. And I think that's the

thing that we try to help our clients, is if they're not thinking about it,

if the account hasn't brought it up, let's talk about those kinds of

issues.

00;14;35;26 [Jason]: Yeah, those are huge and whenever I see people in

partnerships, multi-member LLC or whatever, and they're not

married to each other, so they have competing personal interests,

at least on some levels,

00;14;50;10 just naturally. I'm always like, what's the agreement? What's the

operating agreement?

00;14;55;22 [Bud]: Right.

00;14;56;03 [Jason]: And you know, more often than I'd like to think, they don't

have one at all or they've bought some boiler plate one

00;15;04;26 [Bud]: Right.

00;15;05;26 [Jason]: Off the internet, you know, five years ago and everything's

great. And you know, marriage is all about love, and divorce is all

about money. And when, when you go through a business divorce

00;15;18;24 [Bud]: Right.

00;15;19;07 [Jason]: Whether you're amicable and you're like, Hey, we're in

partnership together and now we're going to sell, how does that

look?

00;15;26;23 [Jason]: And if you don't have the agreement back when it was

easy and about love, and now it's tough and about the money

00;15;34;17 [Bud]: Right.

00;15;34;23 [Jason]: It's really hard to, to get

00;15;36;13 [Bud]: It, it is.

00;15;36;22 [Jason]: People to negotiate.

00;15;37;29 [Bud]: Right.

00;15;38;03 [Jason]: In good faith.

00;15;38;28 [Bud]: Making sure documents are up to speed and they're actually

signed and dated and things like that, little things like that.

00;15;43;23 [Jason]: Oh, yeah.

00;15;43;29 [Bud]: Really make a difference. I, I have a, a partnership I, I bought

a with a, a group of 20 clients 27 years ago, 4 Quick Stop stores in

Lincoln, Nebraska.

00;15;55;10 [Jason]: Okay.

00;15;55;18 [Bud]: And we are just selling them this month.

00;15;57;25 [Jason]: Wow.

00;15;58;15 [Bud]: Twenty-seven years collecting triple net lease income,

everybody extremely happy. But like you said, you know, I had to go

back into the file and figure out, okay, where's that operating

agreement?

00;16;08;15 [Jason]: Yeah.

00;16;08;20 [Bud]: That tells me the process that we can use to, you know,

validate the sale amongst the partners and what's the split look

like? And

00;16;15;12 [Jason]: Right.

00;16;15;17 [Bud]: You know, all that kind of stuff. And, and, and had been so

long since we had actually looked at those, I, I had no idea what it

really was.

00;16;22;02 [Jason]: Right.

00;16;22;16 [Bud]: The good news is, is I get a nice cut of the profit.

00;16;24;25 [Jason]: [Laughter]

00;16;25;15 [Bud]: So I'm happy.

00;16;26;11 [Jason]: So you found the agreement that you liked.

00;16;29;07 [Bud]: Well, it was the original file.

00;16;29;21 [Jason]: There was like 4 or 5 of them.

00;16;30;23 [Bud]: I was pretty smart back then.

00;16;33;19 [Jason]: So, so we're selling the business, you know, that can take

on all kinds of different shapes too, right? I mean, we could, we

could get that sunset check where, hey, here's a check, see you

later hit the bricks. Or oftentimes it's got some structure to it and it

might more look like a

00;16;53;11 merger.

00;16;53;25 [Jason]: For example, you might say, Hey, I'll buy another financial

advisory firm. I'm going to give you X in cash, I'm going to give you

Y as a note. Or you're going to take back a note for Y, and then I'm

going to work for you for another 10 years at, at Z, you know, and

that's going to be my

00;17;12;06 downline compensation

00;17;13;22 [Bud]: Right.

00;17;13;25 [Jason]: You know. So it's not, you know, business sale doesn't

always mean getting out of the business.

00;17;19;28 [Bud]: Right.

00;17;20;10 [Jason]: It just might mean, Hey, I'm changing my role, I still want to

be paid a certain amount or whatever, and that can factor into that

too, right?

00;17;28;11 [Bud]: Yeah, absolutely. You know, and then you've got typically

something about, you know, client retention and revenue growth

that's tied to some of those

00;17;36;24 [Jason]: Some guard rails. Yeah. Like, hey, if revenue drops off

more than this, then it's reduction in note. Usually it's, that's how

you see that, as it's a note reduction. And if revenues go up, you

know, and you can isolate that revenue to that

00;17;52;06 new revenue that you bought, then there's an incentive for that to

go up as well.

00;17;55;26 [Bud]: Yeah.

00;17;56;06 [Jason]: So, what else did you want to add for our viewers and

listeners about selling their business?

00;18;02;22 [Bud]: Well, you know, it's an emotional event, right?

00;18;05;01 [Jason]: It's huge, it's their babies, it's what they grew up on, you

know.

00;18;07;17 [Bud]: Sometimes it's just recognizing that we've gone from the

youngest person in the room to the oldest person in the room and,

and it's just like 2 finger clicks, right?

00;18;16;09 [Jason]: Yeah.

00;18;16;11 [Bud]: It's like, how the hell did that happen, you know? And, and so

it's understanding that, you know, it's time, you know, do it when

you're healthy, when you're, you know, what we've experienced in

our careers is people who've waited too long.

00;18;28;29 [Jason]: Sure.

00;18;29;17 [Bud]: And weren't able to

00;18;31;17 [Jason]: Or the buyer pool's shrinking up.

00;18;32;23 [Bud]: Enjoy life, right? You know, there is fewer and fewer people,

but you know, so if we want to encourage our clients to look at

these things, right? Don't be afraid of it, but see, hey, am I, am I

ready for this? Emotionally, financially, and if it's the right time, you

know, go enjoy

00;18;48;25 life.

00;18;49;19 [Jason]: Some, some of the emotional side of it is, is a challenge.

I'm 47 years old, right now my fuel is working for WCG Inc and, and

doing all that stuff and I don't know what I would do with myself

from day to

00;19;06;09 day. Now, of course I'll find things to do but will, will it be my fuel?

Right?

00;19;11;08 [Bud]: Right.

00;19;11;13 [Jason]: And will I drive Tina crazy, you know?

00;19;14;01 [Bud]: Probably Yes to that.

00;19;15;20 [Jason]: Yeah.

00;19;16;01 [Bud]: Probably already happening.

00;19;16;13 [Jason]: Sure. Yeah. I was going say, I'm sure it's already

happening. But, but we can't as, and I think, again, given your

experience that adds a lot of value to your counsel because I think,

again, a lot of people just

00;19;30;20 look at the black and white.

00;19;31;22 [Bud]: Right.

00;19;31;29 [Jason]: And don't see the downstream emotional conflict now. Like

what's gonna happen to the marriage now that there's all this free

time? And what's going to happen to the marriage when now

there's more of a financial throttle?

00;19;45;24 [Bud]: Right.

00;19;45;29 [Jason]: Or a bridle on the spending and all those things? And

people get through it, sure, but you have to address it.

00;19;52;07 [Bud]: Right. You know, I have a client, you know, he's a couple of

years younger than me. He, he was done, right? And.

00;19;58;07 [Jason]: Just check out of his business, mentally?

00;20;00;04 [Bud]: You know we, we really spent 20 years preparing him for that

moment.

00;20;04;12 [Jason]: Okay.

00;20;04;26 [Bud]: And, and it worked. It, the plan actually, you know, with twists

and turns, worked. So he's now teaching a science class at

Cheyenne Mountain High School, right? Loves it. You know, just as

happy as can be.

00;20;18;10 [Jason]: Yeah.

00;20;18;15 [Bud]: You know, and, and that's just probably, you know, one stage

in the journey.

00;20;22;07 [Jason]: Yeah. No, I'm, I'm like that too. I always say, Hey, what's

my next chapter?

00;20;26;15 [Bud]: Right.

00;20;26;22 [Jason]: You know, do I help other CPAs grow their business? Do I

go teach small business accounting at the local college? Because

that's a sorely lacking subject, you know? A lot, there's a lot of

things you can do

00;20;40;20 [Bud]: I think so.

00;20;40;25 [Jason]: To give back, you know provided that you can do it on your

own terms too.

00;20;44;03 [Bud]: Right.

00;20;44;22 [Jason]: Because you know, you just came from a job, you don't

want another job.

00;20;48;08 [Bud]: Well, you know

00;20;49;02 [Jason]: And this job was tough, you know.

00;20;51;04 [Bud]: Well, they say, "Working ain't all it's cracked up to be."

00;20;53;04 [Jason]: Exactly. Well I always laugh too, because people say I

want to own my own business. I'm like, Oh no, no, no. You, I'm

sorry. No one told you this. But business ownership doesn't mean

you own the business, It means you, it owns you.

00;21;04;12 [Jason]: That's where the word ownership comes in.

00;21;06;17 [Bud]: Well, you know, that's exactly right. You've got, you know, so

many people, maybe, depending on you to make good decisions.

00;21;14;02 [Jason]: Yeah.

00;21;14;12 [Bud]: Right? Not only your livelihood, but theirs too.

00;21;18;18 [Jason]: Yup.

00;21;19;15 [Bud]: They're counting on you to make the, HR decisions, right?

You, they know when somebody needs to be out the door cause

they're causing too much strife.

00;21;29;12 [Jason]: Right.

00;21;29;16 [Bud]: If you can't figure it out, they do.

00;21;31;17 [Jason]: Right.

00;21;32;14 [Bud]: And so, you know, all of a sudden that comes into play. You

don't learn that right off the bat, it takes time to figure that out.

00;21;37;15 [Jason]: Totally. No, I agree.

00;21;38;06 [Bud]: But you know, like we, we talked earlier, you know, my son

Chris is in Steamboat.

00;21;42;09 [Jason]: Yes.

00;21;42;21 [Bud]: And so he's, he loves construction and he's a builder and so

we've worked, you know, build, created a company. And so I'm

really just enjoying, you know, that aspect of it. So I talked to him

almost every day,.

00;21;54;09 [Jason]: Yeah.

00;21;55;12 [Bud]: Which is part of that whole transition over time.

00;21;57;08 [Jason]: Yeah. No, I agree. I think it's awesome to be able to see it

in the beginning because far too often we only get the call at the

end, you know? Or at least middle to end, you know?

00;22;06;25 [Bud]: Well, you're trying to plan it on your terms, right?

00;22;08;19 [Jason]: Right, right. No, totally. You're right. You're right. So, to

recap here, just, you know, talking about selling your business, is

timing right? We don't know. We have to look at the plan. We have

to look at does he have, do you have enough assets to support

your lifestyle?

00;22;22;11 [Bud]: Right.

00;22;22;17 [Jason]: Is there going to be a lifestyle shift that you're willing to

accept? You know, all those, those you know, things. How's the

structure? What's the risk with this new structure? Are you taking

some, some back as a loan? Okay, what's the risk in that loan?

00;22;36;02 Can you maybe sell that loan to another bank? Who knows. All

those little things go into it. So timing isn't right for me now. Am I

getting what I should? All those things. Business valuations, huge

in, in, determining that. We also need to, of course, you know, clean

up the books, clean up the tax returns. Just, you know, again books

are designed to maximize value, in some

00;22;56;24 respects. Tax returns are meant to minimize tax and sometimes

they don't always agree. And we have to make sure that we're, you

know, showing good value in both

00;23;07;23 the tax

00;23;08;06 [Bud]: Right.

00;23;08;25 [Jason]: Return and the financials. And then we talked about those

contracts as well, cleaning up the employee contracts, any kind of

longterm trigger obligations.

00;23;17;02 [Bud]: Absolutely, you know? Know what they're getting and know

what we're giving them.

00;23;19;23 [Jason]: Yup, exactly. And then, you know, then, then what do you

do after the sale? The emotional response because for me it's, it's

my feel. I get up in the morning, I think about business. And, and

there'll be a day when I wake up in the morning and I think about

00;23;35;21 fishing. But, you know, and, and hopefully that'll be my fuel. But

right now I can't see it happening.

00;23;42;11 [Bud]: Now you've located right across from the golf course.

00;23;44;16 [Bud]: I can't imagine you wouldn't at least try to at least swing the

club once in awhile.

00;23;47;21 [Jason]: But I'm more of a dirt biking guy.

00;23;50;16 [Bud]: Well, that's okay, too. I like that.

00;23;51;01 [Jason]: With a bourbon drinking problem, that's easy. So anyway,

Jason Watson, thanks so much for joining us um, Bud.

00;23;58;04 [Bud]: You bet. Again, Jason Watson with WCG Incorporated, local

tax and accounting firm. Bud Rainberger with RWA Partners, here

Thank you for having me. Also in Colorado Springs. We're hosted

by Axe and the Oak, here also in Colorado Springs. Part of our

Bourbon and Business tour, and we'll talk to you will soon.

00;24;14;06 Thank you.