ERP072 - Sharing Your Finances With Your Staff

That was one of the things I loved about our coach from day one is five minutes into the first meeting with the team that was going to help us push this out. He's furiously taking notes and then he went back to his office and he wrote me an email. I still have it somewhere, literally if you print it out, it's probably 10 pages. And it starts with, I don't care if you fire me, you need to hear this. Your operations manager is a cancer to your organization, he's undermining you and he has to go now. Welcome to Evolved Radio, where we explore the evolution of business and technology. I'm your host, Todd Kane. Today on the podcast, I'm joined by Eric Reeger with Webbit. Eric has been running his MSP for 25 years and has learned many lessons through his growth. One that has had a profound impact on his business is using a system called Open Book Management. This is the practice of being highly transparent with your finances. Sharing as much financial information as possible with your staff and using it to instill a sense of ownership and awareness of the company finances. We also talk about his experience in developing an employee stock ownership program or ESOP. Eric's insights here are super valuable and align very closely with what I've observed in leveraging open book management practices. So please enjoy this enlightening conversation with Eric Reeger. If you enjoy the show, please consider leaving a rating and review in your favorite podcast app. It really helps to spread awareness and bring more listeners to the show so we can share the message with more of the community. Now, on with the show. Joining me on the podcast today is Eric Reeger with Webbit IT. Welcome, Eric. Thanks, Todd, I appreciate you having me on and looking forward to the conversation today. Awesome. So, uh, a couple of things that we're going to go over. Largely do with finances and and how finances are managed and viewed in your business. You take things a bit differently than is typical. But, uh, I hope that we can through the course of the conversation, maybe open people's eyes and attract people to an interesting way that you guys manage your business and manage your finances. So, we'll kind of tease with that. And maybe to kick us off, if you could give us perspective on the size of Webbit, the parameters of your MSP and just start with the intro there. Sure. Well, we're in the the Chicago suburbs, Naperville, Illinois. And we just celebrated 25 years in business a couple Sundays ago. Which is like what a hundred lifetimes in technology when when you've when you've survived that long. We're just under 30 employees. We'll probably go past 4 million in gross revenues this year. One of the differentiators we have is we have a team of software developers, a team of five. And that's really it kind of just the clients. Help direct that and I came from software. Before I started Webbit, I worked for a healthcare software company, so it's not foreign to me. But as as we got deeper into our relationships with our clients, they started asking for things like integrations, ERP customizations. And so the former VP of the company I worked for was doing night work. It got to be too much. We brought him on and it's grown now to quite a sizable portion of the work that we do. Relative to what I hear from most MSPs, either they're outsourcing that or they're just not touching it. So, it's just a core competency we were able to bring in and helps differentiate ourselves a little bit in the marketplace. Yeah, it's awesome. And helps with sort of the the complete IT picture, sort of all the technology services. I think in general, I would say that's probably where the industry is trending, but I I think you're right. You know, you want to make sure that you have the core competency and you're not just sort of grabbing at straws because an opportunity presents itself either. It can be a bit of a risk too. Yeah, I think that's that's where especially some of the smaller ones get tripped up a bit. Is rather than focusing on the core competencies and getting really good at that first. They're chasing whatever the hot buzzword is. You're probably going to see a lot of people slapping CMMC on their website now because that's that's the new cool kid buzzword. You know, I'm always a big proponent of stick with what you know, get really good at it and then figure out either a partnership or how you can develop additional competencies after that. Yeah, right on. So, uh, primary interest in in our conversation was around a particular style of book management. That I kind of alluded to. And you and I connected on a thread on LinkedIn talking about financial management and financial visibility to the books. And I kind of offered up that I was a fan of the book Great Game of Business by Jack Stack. Which advocates open book management, meaning that there's no real secrets about the finances. P&L statements, revenue statements, pretty much everything is shared with the staff. And to a lot of people, this is scary. And somewhat revolutionary. And this was a concept I was introduced to me by by a mentor in in my career that I thought was really cool. Like, I get why it's scary for some. But I think it made sense to me once I read the book and and sort of thought about this and and definitely tried some of the practices here. And this is again, something that that you guys advocate in your business. And being very transparent about the the finances of your business. So, you want to give us a sort of Cole's notes on your experience and maybe sort of what led you to this idea of sharing your books openly with your staff? Sure. And it's the same experience you had where a mentor shared the book with me because I had never heard of it before. Read it in a weekend, came back and said on that following Monday. This is the missing piece, we we have to implement this. And, you know, of course, his response was, oh crap, I forgot what happens when you read books. I latch on to an idea and it it it just it did seem to me the missing piece. And I'll expand on that a little bit where you've got. You know, most of us have like really good employees that that come to work every day, they want to do a great job. And when you can connect how they do their work with the results that the customers get. And then the results our business gets, what you get is you get a better a better employee. You get a a more educated employee who will ask better questions, help make better decisions. And create visibility maybe in areas where there weren't. And our job is to advise our clients on, you know, things that will help improve their business. We're we're not supposed to be here reselling vendors, services or tools or things like that. Those partnerships are important. But they shouldn't be driving the conversations. And when when you teach people those principles, they'll, you know, the ones that really want that. And that transparency and that visibility, they become better equipped to handle some of the curve balls that we get thrown in this business. And the clients notice it too and they appreciate it, you build a a better trust relationship. Because you can speak the language of business instead of the language of tech. And I think that gets lost a lot in our industry. Is there's there's too many people speaking tech and, you know, they know that stuff. Inside and out and it's not that they're making recommendations just based on the technical. I mean, they get excited about the tech. But a lot of clients, they just they don't get it. And they they're trying to run a business and trying to be profitable or in the nonprofit case, they're they're trying to utilize that that revenue they have to to the mission. And when you can speak both of those languages, it just it makes for a more trustworthy relationship with better outcomes. Yeah. So, this is a it's interesting that you sort of came about this the same way as well. Can you kind of expand on like, how is this presented in the business, like, how do people have access to the books? Like, obviously, we're not talking about just giving people access to QuickBooks and, you know, hey, go go feel free to kind of plug around in there and have a view. I have to imagine this is presented to the staff in some consumable way. Is this done through like town halls or emails and and report functions? Like, what what is sort of the the description of the visibility that your staff get to to your books? Yeah, this is this is a really important factor. Because, you know, for before we before we dive into the to the how, I want to talk about the the the different types of open book. Because you and I both read the great game of business and we went down that path. We hired a coach to help us do that. And I'll I'll get to that in a second why we came to that conclusion. But there are companies out there who are quote unquote open book and what they do is they share financial information on a quarterly basis or whatever whatever regular method there is. But it's historical. So, basically, the the people in the company can't do anything with the information other than see it. It's it's it's history. You you can't change history. And the open book that the great game practices and preaches is more about financial transparency on a week to week basis. Where you're having line item ownership throughout the company. So, for instance, we have, you know, like six or seven different revenue lines. I I only own one of them. And we have probably 20 to 25 expense lines and I only own two of those. So, there the other owners in in the company have to come in and report every week where they are according to plan. So, you you start the year before in quarter three making what they're doing. What great game calls high involvement planning. You create your business plan for the following year. We start with the revenue plan and then we go once the revenue plan has been voted on and approved. Then we do the expense plans. And what that does is it gives you the opportunity to course correct on a week to week basis if you're off plan. So, you get a lot more buy-in from the employees. You get a lot more buy-in from, you know, everybody in the company. That, you know, okay, this isn't just historical information. You know, kind of so what, we can't do anything. It empowers them to speak up and say, hey, we're not going to hit this mark. Here here are a couple things we could do to potentially change history. That's the important distinction I think between what the great game. Their methodology is and some other forms of just open book. And, you know, we got started with a coach because I did some research. And I I have yet to find anybody who self-implemented and was wildly successful with self-implementation. It usually, it's kind of like IT. You know, there's a lot of companies out there that will self-implement IT. And then you have to come in as a managed service provider and fix it. So. We we wanted to, you know, kind of eat our own dog food in that regard and say. Hey, we're not smart enough to do this on our own. And over the 12 weeks that the coach helped us get ready. You start with a small committee. You slowly open things up and teach them. And part of what they helped us do was was create the messaging and teach the employees what they were about to see. And one of the first revelations was how an Scorp works. And, you know, most people in our company didn't realize that Webbit doesn't pay taxes per se. It's a pastor entity, so any profit goes into my personal tax returns. And since we happen to operate in Illinois, there's quite a large state income tax as well. So we effectively get taxed at a higher rate than a lot of other organizations or maybe C Corps. And that was eye opening to people. Because if you don't tell people how things work, they'll they'll make their own assumptions. They'll get their information from somewhere. And, you know, a lot of times the belief is, wow, look at all this money. He's got to be rolling in it and we're not getting any. And once they started to see what it cost to run a business and how much we pay. In just in salary and benefits and taxes for payroll. Now, we don't show individual salaries. That's the one thing we roll it all up into into one line item. But, you know, as a service provider, that's a that's that's the largest chunk of our expenses. And they're like, oh, okay, so you're you're not, you know, taking millions of dollars home every week and, you know, buying up islands and things like that. It's it it really opened a lot of people's eyes. And I think they just have a new appreciation for the risk that a business owner takes. The things that go into keeping the doors open and, you know, making sure people have safe, comfortable environments. One one of the benefits of this is when the pandemic hit. Because everybody could see how much cash was in the bank and that we're debt free and things like that. Nobody in our company panicked about losing their job. And they were able to put their heads down and focus on helping our clients. I can't imagine what that would have been like to go through if we weren't open book. Yeah. You hit on a really important factor in this because I think it's one of the primary points of resistance. That I hear when I I suggest to people that they should be more transparent with their their financials. Especially with management. You know, I see like I work a lot with service managers and and operations directors and sort of those the operations or second person in charge of an organization. And I'm often shocked by the fact that they don't have visibility to the finances. Which, you know, just makes no sense to me that they're trying to run this business. And they're effectively doing it blind without any ownership or control over the costs or the expenses. And for that or or an understanding of sort of the true picture of profitability. And I often sort of stage people into this and say, well, let's just start with percentages. Because then you don't have to talk about about the the dollars and cents themselves. Which is just sort of like a soft way to get to the same place. But I still I I'm mystified by this in a lot of cases. And and the primary point of resistance is exactly that. They say, well, it's the what ifs. You know, IT people are great at what ifs. Scenarios that limit them from doing anything. They always say, you know, what if they see, you know, how much I make or how much somebody else makes. And, you know, they're they're going to get crabby and and feel like they're they're unappreciated. And, you know, categorically, I've never seen that be the case. The only time that that's actually been an issue is if, you know, people find out that they're paid 30% less than the person sitting next to them doing the same job. Like, you kind of have a good reason to be upset about that. But I agree, I think it it what people tend to find is that it really helps people to provide perspective. And and sort of a deeper appreciation for the costs and the risk of owning a business. And, you know, I often say it's, you know, if you want to take the risk and throw down the capital to start your own business, then you can do that. But most people won't. Right, so the fact that you, you know, the owner makes more than than most people in the company, which isn't always true, by the way. But the fact that you make you make more as the owner, like that just makes sense. Like, you started the business, you carry the risk of running this business. So, of course, you're going to make more. And I think people are more are are mature enough to understand that. But I find that that's such a psychological barrier for for people to cross. And just that appreciation. And I think it speaks to what you're saying is like, it helps people to be more engaged and more involved and to be able to provide an appropriate narrative for what the situation is in the company. Because the other situation that it helps defend against that I find is people will say. You know, this person wants a raise and we really can't afford that. Well, that would be a lot easier of a conversation if they actually understood why you can't give them a raise and what the costs are, what the targets are for the company. And if I give everybody 20% increase, you know, we'll be underwater. Right. And those are those conversations that are hell of a lot easier when people have the transparency to understand what's happening in the business. I think there's a couple things to unpack in that. And in terms of, you know, the great game, the people there came and asked me kind of a pointed question, like, why do you think more people don't do this? I had to pause for a minute because, you know, at first I thought it was just a marketing problem. You know, I'd never heard of the book, the, you know, the book was, I think, coming up on 20 years old. At the time it was introduced to me. And I'm like, I I am a voracious reader, like I've got over almost 200 books in my audible right now. Like, like I see a book and it attracts me, I I buy it. I'm just I'm kind of one of those people who'll have more books than I'll ever have time to read. And that would have caught my attention if I would have heard about it. So I thought it was a marketing problem. And then I started, I've been in a lot of peer groups and I've gotten to know a lot of owners. And. We're not all in it for the same reasons. And I I didn't start this business to get rich. I started this business, the company I was at before, we treated our clients and our employees horribly. And, you know, we grew from like 8 to 80 people pretty quickly. And we had a great culture at 8 and we had a horrible culture at 80 because it became a money grab. It just became about how rich can certain people become. And I'm certainly not anti-capitalist. I believe in, you know, you should make the money for the value you provide. So, you know, I just want to get that out there because a lot of people misinterpret what I'm about to say. Is like, oh, you hate money or you, you know, you you don't believe in the American way. It's not any of that. It's if you're going to get into the into a business for a lifestyle. If you're you're going to do this to make a good life for yourself. You should be up front with the people who are working for you. Because I found through a lot of the mergers and acquisitions that are going on in in our industry right now. There's a lot of good people being tossed aside or feeling like they placed a lot of themselves into helping and they get nothing for it. And, you know, that's probably a whole another podcast we could do just on on that. But. If you start this with, you know, good moral, ethical backgrounds and with good intentions. And I just wanted to create an environment where, you know, people were valued. Clients and employees alike. And so this just made total sense to me, there's nothing to hide. And I think there's a percentage, it's probably a small percentage, but there's a percentage of people who would be ashamed to show this because of how much they're taking from everybody else in the business. There's also a percentage of people and this was a conversation I had with somebody just a couple weeks ago. That might be embarrassed of their lack of command on finance. And they don't want people to see what could be perceived as incompetence. And what I've embraced and part of what they they they taught us. In the, you know, the 12 week onboarding of of our open book was. The, you know, as the owner, you have to be vulnerable, you have to go in front of people and and show them. Like, part of the reason we're doing this is because 30 sets of eyes are better than one set of eyes. And I don't have all the answers and everybody, you know, who's out there in the field, working with the clients, doing the projects, doing the quotes. Like, everybody has a different perspective and we're going to get so many more viewpoints and so many more data points. We'll be a better, stronger company. And a lot of times, you know, people, especially have been in it for a long time, there's this whole wall that they've built up. Of this perception, you've got to know every answer, you've got to you've got to seem like you're in control at all times. And there was a Simon Sinek video I saw a couple weeks ago, he talks about being being willing to be the idiot in the room. And oh my God, like I like I want to put that on a banner and just fly that around everywhere. I have no problem being the idiot in the room, just raising my hand going, I don't get it. I just don't get it. And I think a lot of people have either ego or fear problems that they they just can't be that idiot in the room. And that stops them from, you know, actual greatness. Because if you if you if you share this information. You got to do it the especially if your books aren't great, you got to do it the right way. But if you do it with with good intentions and from the heart and with some proper coaching. Now you have a whole team pulling to get things corrected. As opposed to having to carry that weight all on your own. And I'll tell you, you know, we could probably have another podcast on mental health. It's it's a huge burden to carry by yourself. I just can't imagine doing it in this day and age, especially in the industry you're in with all the risks we take. So, like again, if we're doing the pros and cons checkbox, the cons are so tiny versus what you could get from doing this. What would you say like what are some of the cons that like we've talked about some of the the fears that make sense from a logical standpoint? But really don't bear out. But what are some of the downsides of this type of management? Yeah, it there's a lot of crying that's going to happen. I can tell you that first and foremost. By the owner or by the staff? Yes, yes, there's there's a lot of crying involved. Yes, yes, yes, yes. Well, if you care about something, I mean, you're going to be emotionally invested. So, you know, it's it's going to expose your flaws. I mean, you're going to you're definitely going to see your your areas of weakness. But they're there regardless. So, getting a picture of them, but it it could it could be some of the most difficult times. And one of the things they told me when we were going through this initially is, you know, be prepared for 10 to 20% of your staff leaving. Because there are people who don't want this level of accountability. They just, you know, kind of want a 9 to 5 job. And this is going to be a very uncomfortable environment for them and they're just going to look elsewhere. So, we we were nine people when we first opened the books and there's only three left from that group. So. You know, we we had more than a 10 to 20% churn, but it was the culture shift that we needed. And now, you know, the almost 30 people we have here. Every single one of them are here because of the the message we use about the open book. It was not easy to get there. I I like if anybody tells you this is a magic pill or a silver bullet, they're they're either incompetent or they're lying to you. Because. It's not easy to do and that's, you know, some people will put that in the con bucket. But the alternatives are going out of business. Or just spending your whole life struggling. So, it's just kind of how you look at what a con is. But it's not easy to do. It's definitely not something you're just going to flip a switch and all of a sudden everything's better. Can you think of any examples where like the exposure of the books led to someone sort of identifying something or bringing up an idea that led to kind of a decrease in cost or a revenue opportunity? Or just some some shift where you were like, you know what, that's a great idea. Like, we we should do this and that that was something that maybe wouldn't have come about without that that open style. Yeah. Tons of examples, but one of the one of the most impactful ones I think has been. When you're in, you know, some of these peer groups and people are trying to help you with packaging and pricing. You know, there's different methodologies and there's different, you know, trains of thought. And, you know, one of them is to just throw everything in in your bucket. And just sell it for one price. Well. If you keep adding things to your bucket and you don't define the edges properly. Security is a perfect example. Right, like now. The security stack in it of itself is its own animal. Security services are its own animal. So, so what we started doing is we started getting more granular with our profit and loss statement. And the cost of goods. And we started identifying things that we called giveaways. So, stuff that should be the client's responsibility outside of service. Really kind of getting the definition around what managed services means to us, what managed services means to them and what their responsibility for other things were. And I think when we first started that, we were our giveaway bucket was almost 20 grand a month. Not insignificant. Yeah, not insignificant and if you you can either measure that in bottom line profit. Or you can measure it in full-time employees, however you want to. It's a lot to be giving away. And, you know, as as we march towards managed services being a commodity. You have to watch your cost of goods, your profitability, all those things. So, I think we've got that down under $1,300 now. And, you know, it's it was a concerted effort, our VCIOS had to have conversations, reframe clients. We had to sell new clients differently. But the visibility as we went through our Friday meetings, it was just a reminder, hey, you know, our bonus program is. There's we just have one in the company, we have no commission, anything. It's we all participate, myself included, we all get bonus based on the success of the company. This is money coming out of our pockets, who wants to have the conversations. So. That that was probably the most impactful example I can give you, but, you know, when everybody sees it and then it ties back to, hey, this is your money too. Because here's where the bonus program is, here's where it would be if that 20 grand was actually being paid for because remember, those are costs. So if you were actually selling it, say at 20%, so it's not just that money, it's 20% additional to that money that drops to the bottom line. That's a pretty big chunk every month that, you know, could be going into people's pockets. So, it drives people to action a lot quicker when they see, you know, how much skin in the game they have. And it's not just, oh, it's Webbit's problem. It's like, no, it's your problem too. Can you maybe kind of describe a bit more on your incentive program because that's something that people ask about a lot. And in building incentives and and those bonus programs. Like, it sounds like you have a fairly, maybe not simple structure, but but not not really complex either in that it's it's uh it's just holistic for the whole company. What does that look like for you guys? Yeah, so part again, going back to the great game, one of the things you have to do every year is pick your critical number for the business. So, initially, when we first started playing, net profit was our critical number. Because if you're not making money, you know, you don't have cash to run the business. The oxygen runs out, you're out, you're done. Game over. So. We set the bar pretty low in 2016, you know, as in terms of net profit score. Because we wanted to get a win, we wanted to get people excited. And we blew it out of the water in the fourth quarter. And, you know, hit the highest level bonus. So. You know, once we established that, then the next year we're like, okay, well, it has to go up a little bit. Because here's here are the reasons the company needs to make certain amounts of money to invest and grow and and things like that. So. It really is pretty simple. You know, we just we just go based on net profit. And we let every we remind everybody that, you know, net profit is the score that we use to measure. But the counter balance to that is is client satisfaction. So our CSAT score cannot go down. We can't have customer churn. We can't have people coming and complaining they feel like they're being sold. Again, we we remind everybody the core values and integrity and all the the important parts of this. That it's not just a chase for money. But if you do help make this a strong company, here is here are the levels at which you participate. And it's a. At a certain percentage, then each each employee gets a percentage of their salary as the bonus. So, pretty straightforward. We built a calculator for it, you can, you know, anybody can grab a copy of it. Punch their salary in, play with the numbers. And see just how good the company does. The other important thing that we did and this was again coached to us by the great game. Is the bonuses are paid out over four quarters, 10, 20, 30 and 40%. And so. What happens is, let's say in first quarter, we don't make bonus. In second quarter, if we hit the bonus target, you get the 10 and the 20%. So there's always an opportunity to win in the next quarter. So even if the first three quarters are bad, if we wind up in the year hitting our targets, let's say, you know, it's just building up to a great fourth quarter. They'll get 100% of that bonus, they just get it in one quarter instead of having it paid out over four quarters. That's nice. Yeah, because otherwise people could be demoralized and just sort of lets the the wind out of the sales. And everyone kind of gives up to some degree. Right. Well, and that's and that's the importance of coaching. You know, you you and I both are very mentor positive. You know, like we know we don't know it all and that's why that's the power of peers. The power of mentors. And I would have never thought about that. I would have just said, you know, here's a bonus plan, let's hit it. And the second you start looking like you have no chance. People will, you know, I mean, it's inherent nature of people, right? They it's easy to get demoralized when things don't look good. But if if there's always a chance to win. That's the type of culture you want to foster in your environment. And so, you know, if you have a bad quarter or bad two quarters or let's say the company needs to make a decision on investing in another employee. Or another service. And you might take a short-term hit. You can vote on that. And say, well, you know, and and as a company, you're making these decisions. You know, obviously, management leadership still has to take the reins and being accountable. But it's an open conversation. And and more times than not, people are willing to forgo the short-term because they see the big picture. Because they're exposed to the to the to the conversation. And they're like, oh, yeah. That makes total sense. If we add that on, third and fourth quarters are going to be like over the top. Let's just, you know, we we're okay with not getting a bonus check this quarter. Let's just push it out to third and fourth quarter. Because it'll be a bigger bonus check. Yeah. Yeah, it's so important. And I think that kind of wedges in as well with another kind of quote that I wanted to toss out there as as a point of pushback. And then we'll kind of move move on from this topic. But a lot of the the pushback that I hear revolves around the idea of the staff don't need to know. And and the need to know, I think is probably true. Like, like it doesn't directly affect the work that they're doing. It ultimately affects a sort of the the health of the business, which correlates strongly to whether or not they have a job. Uh, but I I don't see that as as important and and I think that limitation around they don't need to know. It's such a damning statement and it it really damages the the ability to sort of see why managing this way is really fruitful. And I think it comes back to what you were saying before about. It helps a lot to control the narrative, right, around they don't need to know, sure, but they should know. And if they know, then these are the effects that you would see from that. Do you have any comments on sort of that that point of pushback of of the staff don't need to know what the numbers say? Oh, yeah. I always have an opinion on things, so you'll never be uh they'll they'll never be a silence for that. That uh any types of questions like that. I've actually had extremely heated arguments, like veins through the forehead type arguments. With people who are on the other side of the fence on that. And my first comment on that is is, you know, why don't you trust them? You have trust issues. If, you know, that's just personal opinion, but I'm very strongly opinionated that if you're of the mindset, they don't need to know, then you're looking at them as an object or as a means to an end for yourself or for the business. You have trust issues. Something's going on there. Secondly, it's kind of an ignorant opinion to have because you're asking them to do a job and you're hiding information that could help them do a better job. It just it makes no sense. The argument does not hold water. You know, and again, this goes back to core values and principles and why you started the business. There's there's a litany of reasons why people might feel that way. That's for them to sit and stew with their conscience on, you know. And and again, some of it's just education, right? Not everybody's a bad person, not everybody's trying to take advantage of people. But this is sometimes an awakening call of, you know, okay, well, you really need to do a deep think on this. Why don't you trust them with the information? Are you hiring the wrong people, are you not putting them in that, you know, there's there's there's a whole rabbit hole we could go down there. But that's my high level opinion of it. Yeah. I I'd absolutely back you on that and I think it it relates to what you said about you guys needed to do a bit of cultural house cleaning. Because as with any organization, if you don't build the culture with intention, it just becomes what it is. Right. Like culture will will solidify regardless of whether or not you have an intention to it. And I see this a lot in organizations where they they they start to mature and say, okay, no, this is actually how we want the the values of the organization to reflect. And the things that we actually expect from the people that work here. And that that's not always been the case. They they tend to to tolerate a lot of things before that. And then once they get intentional about what their culture should look like and how the business reflects that, then, you know, they're they're tends to be a lot of people that have been there for a while that don't really fall in line. And and it's a great sort of transition point to be able to build the company that you want rather than the to suffer with the company that it that you sort of unintentionally created at some point. Right. Well, that that was that was one of the things I loved about our coach from day one. Is five minutes into the first meeting with the team that was going to help us push this out. He's furiously taking notes and then he went back to his office and he wrote me an email. I still have it somewhere, literally if you print it out, it's probably 10 pages. And it starts with, I don't care if you fire me, you need to hear this. Your operations manager is a cancer to your organization, he's undermining you and he has to go now. Wow, that's bold. Yeah, well, yeah. I mean, but he didn't care because he wasn't doing it because of the money, he wasn't doing it because of how much we paid him. He literally was there to help us make a better company. And, you know, sometimes you're too close to the situation and you're not seeing, you know, your your mind is on other problems. And you're not seeing what's right in front of you. And he came in and he's like, this this guy's everything you say. He's against and he's, you know, but he's so clever that he's twisting it around. Then he started interviewing the employees and they're like, yeah, he's going around telling everybody that he should just step down as president. Make me president and just go do his sales thingy. You know. I mean, that kind of stuff was permeating into our culture. And, you know, had we not opened the books. You know, I I I guarantee you there were probably five or six extinction level events that would have taken us out. Had we not been open book. Had we not gone on this journey. There's there's no way in heck we would have survived the pandemic. No way. I I 100% guarantee that. But. Because we were so ingrained in this by then and the fact that the people could see exactly where we were. And, you know, we took a a leadership position on it early. We were able to navigate it with little to no problems. And and we actually grew our development team from two people to five people. And. The the revenue from the development just grew like crazy. All because of opportunities created because we were open book and and we had, you know, people ready. Willing and able to take advantage of, you know, the the opportunities that presented themselves. Awesome. Another piece that we we had chatted about and that I was curious is I I talked to a number of organizations. That have an idea to start an employee share plan, so an ESOP and give the staff an ability to buy into the company and have some level of shared ownership. And this is a a program that you guys have internally. Which I I thought was really fascinating. Because I would say 80% of the people that go down the road of ESOP give up on it. And they they find that it's really cumbersome. It's fairly expensive to kind of get set in place. But I think again, like if if this is sort of the culture that you're building, the benefits of that can be really incredible. And I don't know if this is an intention of yours, but I also see some organizations with the intent of an ESOP program as their exit. Right, so rather than doing M&A and and, you know, potentially, you know, burying the company inside of somebody else and having a lot of sort of lost labor and and lost love for the for the the company that that that was essentially. If they can build an ESOP program, then effectively the staff buy the company over time and that can free up the the owner to step aside. And and let the the staff that have uh that have really been in the trenches with them and building that organization. As in a way kind of inherit the company. So I guess uh it's kind of two-fold like the start maybe with that is what was your intention with developing that that ESOP program? Did you think of it as uh a means to an end as an exit or was it just did it make sense uh because you guys were already so sort of developed around this this open book management? That this is sort of the next extension of that. What was the thought process in in going down the road of ESOP program? Yeah. Well, when I mean, it was to me, it's a natural extension of the open book. Not everybody shares that uh opinion. And that's that's totally fine. But from an early age, all the peer groups I'd been involved in, you know, one of the first things they hammer with is is what's your exit strategy? And, you know, when you're in your 20s, it's like, I I'm just trying to make it to Friday. I'm just trying to make sure payroll gets met. Like, I. Exit strategy, that's that's a lifetime away. Well, you know, we just celebrated our 25th anniversary and that lifetime is is is here for me. I mean, I, you know, I I don't have the the jet black hair anymore. It's still there, but it's it's quite silver now. And, you know, some days I feel it. You know, it's 25 years running a business. It takes a lot out of you. And. That was a word that weighed heavy on me, exit strategy because we all exit one way or another. Whether it's intentional or unintentional. And so I'm a control freak. I wanted my exit to be very intentional and I've always been, you know, of the mindset. That any success that this business has doesn't come from me, it comes from a collective effort. And I struggled mightily with the idea of somebody handing me a seven figure check at the end. Or, you know, multiple seven figure check and just waving goodbye to everybody. And riding off into the sunset. I mean, first of all, our family history. Is you you pretty much work till the day you die. That's just kind of how, you know, we're blue collar. That's just that's just how I grew up. I don't play golf, I, you know, I don't fish, I don't have these hobbies. Like helping people and building businesses. That's it. So maybe write a book, that's what six months to a year taking off. Like I'd go I'd go stir crazy. So all those things kind of weighed on me and then, you know, the I was exposed to the ESOP concept through open book. And it was just another one of those. Like, you know, I don't have family air generations to hand the business down to. I'm like, these people are my family. That's, you know, who who better to put in charge of. So the way it's going to work for us is there's a trust that you set up and then the shares are transferred from the trust to from myself to the trust. And then the employees get shares in the trust based on criteria. I mean, there's so many different ways. You can set up shares and eligibility and all this. I'm you know, we're still learning a lot of these nuances. Which I think is why there's less than 10,000 ESOPs in the United States. Is the government hasn't really made it attractive. And easy from a a compliance standpoint and all the fun stuff. But there's there's really good ESOP advisors out there. If you get involved in the community, there's the NCEO, which is the National Center for employee ownership. They've got so many great resources to help connect you with these companies. I interviewed like six or seven of them pretty extensively until we figured out who made the most sense for us. And it's not really that big of a financial commitment when you consider once you become an ESOP. Whatever percentage ESOP you are in the United States, there's no federal tax anymore. So, you know, like if we're paying an effective 40% rate based on, you know, the level of profit we make. The federal and state taxes here and that goes away, the more profitable you are. The more this makes sense to do because that's all that money just goes right back into the company. Now, you you have to start planning from day one to build up a a fund for when people retire and you have to pay them out. So you have to structure that carefully. So you can actually become a victim of your success. Jack Stack's company, SRC Holdings, they were a perfect example of that. He had to build a $100 million war chest to pay out all these millionaires he made over the, you know, 30 years of building SRC up. It's a huge success story. But if you don't do it right, if you don't have somebody advising you and again, people try to self-implement. It's it's like your brother trying to do IT. He's a plumber, he knows how to put wires to your pipe together. It's a network. How hard could it be? If you don't think these things through, you could wind up 10 years down the road. With, you know, some of your your older people wanting to retire or leave the company. And now all of a sudden you got all these payouts if you didn't structure it right. All of a sudden you could have a cash crunch and boom, you're out of business. Even though you're successful. So. You know, that that all played into my decision. But, you know, you just just ask around now. I had this conversation with one of my mentors last week and all the M&A activity that's happening in our industry right now. And he has yet to see one successfully integrate cultures. And because a lot of the M&A is driven by venture capital and private equity right now. It is what it is. You know, I'm not going to take a side of the fence on that. It is what it is. People made their decisions, they're selling their companies. And a lot of unhappy our last three employees came from companies that were acquired by the bigger. You know, now they're part of two, 300 person company. Culture's been destroyed. And they're just not going to take it. And if you look around, you know, you can Google real quick, the mass exodus of 2021. There's predictions out there that up to 40% of the workers in the United States will be changing jobs this year. 4 million quit in April. 4 million people just quit their jobs in April. This to me, this is partly why. You've got that capital gains tax increase proposed for January of 2021. Hasn't passed yet. But a lot of people are panicking and I think that's driving some people to sell now, trying to cash out. And unless they're getting all their money this year, they kind of don't understand how capital gains works. So that's a another conversation. I've I've had and been educated on like, yeah, you could sell this year. But if you're not getting all the proceeds, what difference does it make? But people are tired from the pandemic too. There's a lot of people fatigued. And they just want to get out. I get it in our industry. It's it's more stress than ever. But cultures are being killed because of it. And he said. This is going to be interesting to see how this plays out over the next two years because the people who are going to tough it out and build up good cultures and build good companies. They're going to rule the world because they're going to they're going to be the places people want to come and work. And that's that's part of what we're trying to build here. Is, you know, we have that infinite mindset of this this company's going to last for as long as business is business. And, you know, we want to take care of the next generations. ESOP's the way to do that. That's amazing. I really credit you guys. It's not easy to do. No. It's not. Yeah, I attribute that cost around the necessity for consulting. Right. Because trying to do open book management and you can kind of fumble your way through this and do it, you know, you can get some of the elements and be successful to some degree with it. Right. But if you get some mentorship and some coaching to do it well, then you'll be really successful with it. ESOP program. Do not implement that yourself. It is really complicated. Right. There's a necessity of that cost in that consulting to do it right. That's right. Well, and and setting it up and structuring it so you're not violating any laws in terms of, you know, because and I it was it was interesting because, um, one of the opportunities we have that we're working on is part of what the pandemic brought to us. Was was the ability to spin the software piece off into its own company. So we've talked about it internally, everybody knows, it's no big secret. We have an opportunity to do that. And so I, you know, we start thinking about, okay, the benefits. Because we have good health insurance here, we don't want those people to lose it. And so I started talking to our CPA about it. And I says, well, can we just keep one group plan for the two companies and then he went into a whole bunch of ways where people have abused the system. To be able to pay people as little as possible and strip them from benefits. And this is why you can't do X, Y and Z. And I'm like. Leave it to certain people, you have a good idea, you're trying to protect people, you're trying to do the right thing for them. And here's here's other people like how can we take advantage of the system? And that's why all these laws get written about, you know, you have to be careful not to weigh the ownership in such a a manner to where it's unequitable for a certain part of your population. So. I went, you know what, I have no concept of how any of this works. I'm letting the professionals advise us and say, here. I want to take care of everybody, how do we make this work? And they're like. Okay, good, that's what we want to hear because we're not here to try to skirt laws or do. It's like if you're trying to do it the wrong way, we won't take you as a client. I'm like, good, we align on a moral ethical plane. How do we do this? And that becomes much easier when you just get that on the table. And they're like, yeah, if you if you would have said, hey, I'm trying to just get this into two people's hands. We would have walked away. Because there's a lot of missteps you can make to where you're going to have problems down the road if you don't structure it correctly. That's right. Eric, this has been awesome. I really, really appreciate your input on this. And as I said, hopefully it it uh kind of shifts people's opinion on, you know, how open book management and and employee share programs can be a huge benefit to building a successful company with great culture. Any kind of parting words or advice for for people kind of considering these strategies or others in their business? Yeah, I would just I would just say, you know, this is. It was undoubtedly the hardest thing I've ever done in the business, but it's also it was the fork in the road. And I took the right path and we we would not have survived some of the recent events. Had we not done this. It's it will be the toughest thing you ever do, but it also will be the most rewarding if you do it correctly with some guidance and some some actual intention and thought behind it. So. If you're scared about some things, it's okay to be scared. You know, trust me, there's stuff that scares me every day. You know, some of it I talk about. Some of it I keep to myself. But uh it it's it's definitely got the biggest bang for the buck reward potential. But there's no silver bullet, there's no magic pill, you're going to have to roll up your sleeves and work for it. But it's totally worth it. Yeah. And if anyone wants to reach out to you or follow you on socials. We'll link to all of that in the show notes on the uh the showcast page. Any socials that people should look out or look out for, also you have a podcast if you want to bring people's awareness to that as well. Yeah, I did I did an experiment last year, ran a podcast. Uh interviewed a bunch of people I know and it was a lot of it was was centered around just the struggles of running a business. And and we talked a lot about mental health. So, I've been a uh a pretty outspoken person, you know, one of my mentors was really stayed on top of me to get into therapy. So, the podcast is called Tempered Leadership. We we ran it for a season, it's on Anchor, it's on Spotify. It's it's it's where you get your favorite podcast, I think we're even on Apple now. So, check it out. It's also on YouTube. We did put the videos up there as well. So if you want to, you know, get a laugh watching me just have a have a chat with a bunch of people I know in the industry. It's uh it's it's it was interesting. I got a lot out of it and, you know, hopefully if we even got one person to take mental health seriously. And and get some professional guidance and it it doesn't even mean you have a problem. I mean, there's just a lot of weight in leadership running a business. And there's no shame in it. And I'm I'm just trying to help people remove the stigma. So. That that would that would be the big thing. I mean, the social channels, all the Webbit services stuff. You know, you you can find us out there pretty easy and you'll I'm sure you'll put the links on there. So. Every once in a while, pearls of wisdom and then there's smattered amongst some of the the ramblings of a madman. So. Awesome. This is great. Really appreciate Eric and all the best. Really appreciate advocating for mental health and and for us in the channel. And uh the work you're doing to build cultures. Uh in in other organizations and through these uh types of uh approaches. I appreciate it, Todd. I'm right back at you. Thanks for doing this. And spreading the awareness. I think the world needs more people like you. Perfect. Thank you. All right, you're welcome.