EP7- ESOP Experience Industrial Supply Company (ISCO) with Jason Ireland, President

On this podcast episode we interview Jason Ireland, President of Industrial Supply Company (ISCO), a distributor of manufacturing parts who went 100 percent ESOP last year. Jason explains the step by step process their 100-year-old company went through to transition to an ESOP process.  The company was part union and part non-union, providing some background for some companies dealing with that reality.  There is even a ghost in this story…but he cannot be part of the ESOP (it’s an ERISA thing).  We discuss the consensus building process with multiple shareholders and Jason’s future generation as part of the leadership to steer the company into the future of employee ownership making the employees part of this family. 

Transcript

[0:09] Um hey everybody this is the journey to an ESOP and Beyond podcast where we are looking at providing information on employees stock ownership plans. This could be information for going through a transaction so pre ESOP or it could be information around what happens after the fact so post ESOP issues today we get to interview Jason Ireland, um he is has gone through the whole process um he's running a company out of Indiana that is a 100% Employee Stock ownership plan um so with all that I wanted to welcome Jason on our podcast.

[0:40] Thank you Phil appreciate the opportunity to talk with youso right out of the rip right out of the get-go tell us Jason what is your favorite movie and why.

[0:51] I've got so many favorite movies uh and I I like so many across different genres but if I had to pick 1 I'd probably go with Caddy Shack. I'm a big golfer and then also the humor side of a Chevy Chase is brilliant. Um you're too young for Caddy Shack though I mean that's like an old that's like 1 of my movies it is amazing there's there's nothing better Ronnie Dangerfield Chevy Chase I mean just that whole movie the whole everything is just amazing you can't get better it's a classic in your golfer, and I'm a golfer so it's uh yeah growing up golfing every you know since I was 3 years old and. Hey they don't make a whole lot of golf movies outside of Tin Cup and uh and catty Shack so catty Shack was it. That's it right cool so great well thank you so much for joining um the podcast today so 1 of the things I love about these types of interviews is just it's more. Really it's actually really helpful for people to kind of hear from somebody that's gone through the whole transaction and. And a lot of our listeners they're they're thinking about doing an ESOP and they've gone through the they're looking at this as a potential opportunity so this is helpful because you can just share real stories from your experience and how that really worked from beginning you know to in and where you are now.

[2:02] So before I jump into that let's talk a little bit about the company so. Um Isco or Industrial Supply Company is a company that does sell they sell uh manufacturing products into the manufacturing companies and so your your company really is more of like a distributor of of goods to. You know higher-end companies and customers so I did a probably a bad job why don't you explain what Isco does and then and we'll go into like the the the structure of the business, sure uh well we've been around for over a hundred years rectus celebrating 110 years this year. Um it was started back uh to service The Mining and and uh, tile industry back around our in our area in Indiana um and since we've kind of grown we've gone through HVAC and plumbing we still do a little bit of plumbing and pipe Valves and fittings.

[2:52] But 80% or more of our business today is an industrial and mro space we also do personal protection. Janitorial sanitation products and we buy it from the large manufacturers that don't want to put uh, or or take I guess uh the expense of having all their people out on the street selling to individual customers and we take that on for them as a distributor and we sell directly to manufacturing companies and mom and pop shops restaurants really anywhere um municipalities we we don't we don't really turn away any kind of business at all so um we we like to be the 1 Stop Shop and we like to try and make it as easy as possible to do business with so anything and everything if you need it we're going to try and get it for you and uh if we can't we'll tell you where to get it at a better pricethat's awesome now so. What if I slow down the story a little bit a 100 year old business is is not a very um common thing to find in in the United States so. And it was not only a 100 year old business but it was a family business too so let's walk through like the family history line timeline here because I think part of your story is so intriguing to me, because typically you don't see a family business say going going to 100% ESOP so that's kind of the the.

[4:08] Rationale to kind of dig deeper into that so 100 Year company who started in your family the business originally. So it was my great great uncle who started the business and uh then it was my went to my great great grandfather.

[4:24] Um great-grandfather father and then now myself and my brother are the fifth generation. Umyou know surviving the Great Depression and going through all that I I think there was even a point in our history where we were selected by the government for this area to sell tires whenever they were uh very hard to find. Um but yeah it's just a very unique history and you know we've been doing it for so long the the ghosts came with the building and uh it's uh kind of a fun story we actually had Ghost Hunters come by here this a couple weeks ago and and just did a little podcast on it and very interesting stats that they came away with so we can confirm it's it's semi haunted at least so I'm glad I'm glad you brought up the ghost because that was something I was going to ask you about because there's very few companies too that have a ghost in the building so the building are in was built in 19 15 or something like that uh well we, is before 1915 that's whenever we began our company in Brazil and you moved here in 1920 um. And the building actually used to be a hotel before we took over half of it. It was the baader hotel I'm going to turn to the union hotel and uh then we end up buying the other half of it so our our address is actually 2 different.

[5:44] Uh numbers it's a 322 D 328, and not just a single 1 because we we took over both sides of the building but he used to be split right down the middle and you can go up and still see all the fun wallpaper on the walls upstairs and uh it's it's a lot of cool stuff the good history that came through with the building tooso the ghost what was the ghost's name again I forgot yeah really really that is like it's well we're at the site like just so everybody knows we're at the site visit and we're like I didn't even know the the building was had a ghost or whatever I actually never saw the ghost but um there definitely has been.

[6:22] You know some and you had your own ghost experience right I know we're not getting we're going to get into esops in a second but yeah yeah well I mean anytime you're in here after hours um, or by yourself alone it's never a fun experience you know we you you hear large uh adding machines being calculated on the upstairs floors you you hear footsteps constantly walking across the the hardwoods and. Uh it's just uh a little Eerie feeling whenever you're by yourself but I I will say that they're mostly they're not malevolent or anything bad it's just uh they like to poke fun. We've had several cleaning crews that work nights that actually quit because they experienced uh a lot of. You know nighttime fun if you well uh the cleaning ladies so they got pinched in the butt by uh by The Ghost and you know Rudy playing a trick on them or something like that and. I gotta say hi I probably wouldn't be able to do it either if I were that. That's I mean you know I honestly and I guess the last joke about the ghost would be the ghost is not able to be part of the esoc correct uh maybe maybe a phantom shares I don't okay oh my gosh all right so that's kind of a unique thing right to have that, um as you go through the whole thing you guys you and your brother took over and I remember going through this with your because I really worked with your dad first and then I worked with you guys.

[7:44] Um how was it for you in terms of thinking about the ESOP initially like because because you there had to be a thought like hey the family tradition you know you guys have kids and and just thinking about that going back to the Next Generation what were things that you were thinking about when we were first kicking around the ESOP as a as a potential deal.

[8:03] I think it was mostly surprised um you know we we were definitely caught off guard. We knowing that there was kind of like a legacy stock that was passed down from generation to generation and then to just kind of have this uh thrust onto us um it was definitely surprising and a little bit off-putting I I. And I think from that time that we were toldyou have uh to either. Take this ESOP and take it on or we're going to look at maybe a competitor to buy you guys out and um, from that moment obviously all I want to do is learn about esops so I started reading and and gaining as much knowledge as I could on on what it is and how it would affect everybody in our company and, um that ended up uh kind of resulting in me wanting to push for the ESOP and take this on and and keep it going for for industrial supply all of our employees and and you know obviously myself and and my my brother too um

[9:05] Yeah we we just uhthe initial shock is worn off and I think that we're all very excited about what this brings and you know all the things that came from the ESOP as far as eliminating the Union in our warehouse and have them moving over to be Company Men as has been, a great addition for us and I think that there's been a Renewed Energy within our our teams and just people wanting to preach Industrial Supply as much as they can.

[9:33] Yeah I think that my experience was Don your dad and I went through it I did a presentation to you guys I think it was originally and then. Everything nothing happened right and it was like a a little space of time I don't know how long it was but it was a while I mean I remember just thinking all right well then they're probably not going to do it I was actually surprised. You know that it did come back and that was something you guys must have kind of done the research and worked through hey this is something that could actually work and it may not have been what you were envisioning right and I think that's the the part that can be how do you get through that process for people that are thinking, you know either way is this thrust upon them or not but how did you get through that just kind of feeling that this was a better alternative than the competitor.

[10:18] Well I think just in terms of protecting our Legacy um protecting our employees and and our management team you know anybody that comes in on a competitive buy out probably doesn't need me um they're they're wanting the space they're wanting the sales they're wanting the warehouse um and then all the other tasks are probably centralized so um.

[10:40] You know I think it was more of just wanting to make sure that our team was protected uh that our Legacy was protected and that you know, we we do see this as a viable option going forward and we want to grow the business umyou know to. Go through the whole process uh I think it was just the mentality for me of just you know and we've got the Mantra of on it all across the building and it was honestly just kind of ironic that it happened to come and be an ESOP. Because you know we've got these Isco way cards that we give out to all of our employees and it's our 31 fundamentals of who we are and what we stand for and number 1 is take ownership and it just was by coincidence and maybe just kind of uh employing that Mantra myself and just saying you know I'm just going to take on every bit of this I'm going to own it and you know it's got we're going to do our way my way um you know we're we're going to do it and this is how we're going to do it and ended up coming to fruition.

[11:37] Nice yeah and I think that is just the reality of working through the process and and in your case you know kind of say this because I think it's important we just took our time, and had we not. Taking our time then it would have probably been like no forget it and it would have been disrupted because something had to happen eventually right yeah in the midst of all that your dad was also looking at retiring you know and you and you were looking at stepping into a role of um succeeding him in his position as well which is, you know also big transition because the ESOP I always tell people esops that ownership transition as well as facilitate it facilitates management transition but it's not going to be. Maybe on purpose it's just that has to be done concurrently and you guys did that concurrently. And your Situation's up to the point so that when we closed you literally took over that like right after the words you know like title wise and everything else. I was going through your head with that like. Transition of of taking over what your dad was doing and it was that um was that helping you with the whole transition to becoming an ESOP.

[12:43] Um I think it was more of a stipulation of the ESOP you know as I said you know we're if we're going to do it we're going to do it our way and that was part of it um, you know if we're going to be running this as a new newly uh formed company of an ESOP then the management structure was going to change and uh it was going to be under my my eye if you will um.

[13:07] So you know it was.

[13:11] It wasn't uh an easy situation to deal with uh I know that we kept kind of getting pushed back with the closings we had uh an accounting manager our accounting manager left, kind of right in the middle of of the closing um and then we had another 1 that we brought on and he was not good at at getting it done and we had to make a change up from there so we were basically scrambling to do 3 or 4 months of you know month reconciliations and and maybe a time frame of 2 or 3 weeksso it was a little hectic at uh when we were going through it and.

[13:44] I think honestly maybe just helped us become who we are now and and you know we've figured that we can work through all this and get it done ourselves and. We did hire an accounting manager now he was just she's great and I think it'll be a great fit and umyou know we don't have that situation anymore, um kind of dealing with that transition at the same time as the ESOP you know there was a lot to go through a lot that we're still learning as we're going um, but you know literally in the announcement of the ESOP to the employees you know Dad had announced his retirement and and the appointment of myself and my brother to the vice president role. Yeahno that I think that's cool and kind of some of that in there that we just talked about. It's like the real the reality of the process itself and I'll kind of walk back through this a little bit just so people can understand is you do a lot of analysis in in ESOP the ESOP planning side which is what we did and then we got you guys involved in the deal kind of like went through a process of building cons consensus and then eventually the consensus was built then we got through the now we're going to actually put the deal together kind of thing. And 1 of the things that really like in your story that stood out to me was. Your dad said hey Jason's going to be the 1 that's gonna work with you directly so it was then now it was me and you putting the deal together.

[15:06] And really honestly very helpful because sometimes, without somebody that's championing and the deal on your side it's just it can be hard to get that you know you got to get some momentum you got to get through all these different steps which we'll we'll get through or talk about. And um and then there's a learning curve right so you're like. Going through this process for the first time and and honestly you have to just trust what I'm saying it just trust me and it'll be okay um and then there's the reality we had a plan and then your accounting manager didn't we didn't have that and the reality of that is we you guys had to adjust for that and, and it was it was fine in the end but it was not like. It was not ideal because it created a lot you know like your pain of like all right you need that you need that we need all these this information um and you guys did a great job of of getting it together but it's but that's but that's a real deal like that happens all the time you have a plan and you Flex through the plan and I think that the goal line, what are the goal was to get over the goal line of like hey we just got to figure this out right and I think that is part of getting ready for a deal you just got to know it's going to take some figuring it out you don't know sometimes what you're going to get into which which was the accounting manager thing for you guys.

[16:19] Yeah it was definitely a big hiccup for us and. We were able to make it through and honestly learned a lot throughout the whole process about things that we need to make sure we do every month and you know in case someone's out or absent and.

[16:32] Um another hiccup that we kind of ran into throughout the whole process was our number of stock orders, I don't know if you remember we had 52 and uh a lot of them I I was surprised he even had a cell phone to be honest with you it was uh. It was a little bit uhcrazy at times trying to get a signature or get someone to read an email or some of them had to go to the library and actually use a computer to pull it up and it was uh it was not much fun going through all that and you know contacting 52 people for signatures and but we got it done so as you said we worked through it and. Uh better for it at the end the moral of the story with having 52 stockholders is don't have 52 stockholders but if you do have 52 stockholders there is just amount of work that has to be done and and the work and the difficult part is these like Jason said were stockholders that were. Pretty far removed from everything day-to-day they were minority most of them were really minority owners like they had a very small percentage and so we had to really clean up that whole amount of of of shares and stock that everybody had and that there's a lot of leg work most most of it fell on you right and your dad probably um myself and our HR manager Mary we we.

[17:53] Scrunching up phone numbers you know creeping on people's Facebooks wherever we could do to try and find a contact that we could reach out to so it was quite the process but it it worked out. Meanwhile you have a day jobfigure out yeah everything else with running a company exactly. Yeah so going through the the process 1 of the things you mentioned with the Union people so so sometimes I've we have people that are thinking I've got Union people I've got non-union people and the first thing I would just tell people is that most of the time the ESOP is perfect for non-union not perfect for Union because Union have already a pension plan and other things connected to their compensation so most of the time that's the the split we usually just do it for non-union people you can do it for Union people in your situation you have Union people that left the Unionfor the company. For the for the ESOP so come walk that out a little bit because I'm sure there are people are thinking um they're in that similar situation with some people that might want to leave the union and go right to the company.

[18:58] So are we. We only have I think it's 6 or 7 employees in our warehouse that are part of a union and it happened back in the 80s and um. Honestly they they were just kind of been separate a little bit separated from the company uh since then we've just kind of worked out a deal every single year with them and it runs through the. Uh pipe valves and Fitters or steam Fitters union uh here locally um. And it was honestly I don't necessarily think that there was a great fit for them because everyone else it's more of the customers that they're serving that fit the Union. Um but they were still part of it and they were still participating and and you know a lot of them were vested and.

[19:43] Uh what we did was we had the stipulation that we separated out the the union employees they cannot participate in the ESOP and all we did was we said if you want to participate we would love to have you here's kind of the what it what it would entail here's you know the pay it's it's no different than what you're getting it's just. Here you're not uh having to put money into it into the pension and you're just kind of building shares over time and Building Wealth over time um just based upon working here and and doing your job and, um it was enough to sell them to it was a unanimous vote for every single 1 of the employees that were in the union and they x to the union and came over to Industrial Supply on the east side. So it worked out great and honestly I think that was the most exciting part about this is to get everybody under 1 1 roof and all you know preaching the same Industrial Supply.

[20:36] Yeah I mean just to have only like 6 6 or 7 people in the union and then everybody else being company that's also like this it's a little imbalance right sometimes it's just. Different different story but the fact that you guys were able to convince them of that and now they're a completely company people and not looking back now you don't have to deal with any Union things forever right so that that's got to be like. Yeah it's it's a it's a little bit of a weight lifted off its never been much of a hassle for us it's just kind of been separate and a little bit more work to try and deal with uh it's a negotiation every 2 years and honestly it wasn't difficult it was just more of um added stuff added headaches that we had to deal with every now and then yeah.

[21:18] Well you're gonna probably get like you could probably write a book or a Blog at this point to say hey how I got rid of my union using an ESOP everybody's gonna write but your circumstances are are probably some so equalize the pay and said hey this is good and then got I mean to get it even on 6 people to get unanimous vote is pretty impressive. Um yeah we've had uh some change over in our warehouse and most of them are younger uh I think that probably helped that they not all of them are vested in the union but they were union members they were they were paying their dues and doing all that so I think if we didn't have the makeup that we did it may have been a little bit different.

[21:54] But um you know it ended up just working out great uh I think the timing was perfect and.

[22:01] We were able to offer them a comparative package and I think that they just I think they were probably tired of dealing with the the added headaches too and just wanted to be part of the club so yeah. It was great now big Victor and your HR person did a lot of that work as far as analyzing everything that's got to be a nightmare oh my gosh she's uh she's been a rock star throughout this entire process so I I we wouldn't have been able to do any of this without her help and all her expertise and doing the comparisons and offering up all these different uh sheets for them to take a look at so they've got something in hand and it's honestly been just she she's just terrific. Yeah awesome well cool that's that's a really interesting part that you don't actually hear that a lot so I think that's probably another unique thing I mean under your old company family transition to ESOP Union to non-union or non-union yeah Union and non-union um.

[22:55] When it comes down to the process let's just break down the process a little bit so we go through this process of of analyzing the the company valuation wise analyze the structure of the feasibility I know we we were looking at bank financing but we decided not to in your situation just gave you guys a lot more flexibility. Um and I do think that that would have been you know it's much better considering all the things then we got all the people involved which included Your trustee, the independent valuation firm and of course the attorney um to put the whole deal together um what stood out to you in the whole process like going through it that was like. Um what you weren't maybe weren't expecting it that way or it was difficult or challenging and and that kind of thing what stood out like as the most challenging part of.

[23:39] The process of going from all the analysis to the deal teams to negotiating an end of closing.

[23:46] I think just all the workI mean there was a lot I knew there were going to be there was going to be a lot but I I think it was just more of.

[23:56] Knowing that there's so many people that need different things uh to get this deal done and you know your team was great about helping us tell exactly where we need to send it to when we need to send it what exactly we need to send um so you know I think having an advisor in your in your corner is obviously just crucial to get the deal done um outside of that I mean I think just the legalities of everything I I knew we would need a lawyer but I wasn't uh, you know reading through the the plane agreement and um we had to we had to create new bylaws because ours were very outdated um you know and then we had to do board of directors structure that we had to create. Um the full process of just going through all the legalities of it and making sure it was all kosher and good to go, I think was just kind of the surprise um not necessarily a bad surprise because we have a lot of stuff that just needs updated um but uh. You know going through all that process and then honestly I was just surprised at how responsive everybody was um if I had a question I just fire an email and I'd get a response back almost immediately so uh knowing that you've got that and can get answers quickly I think made the process a lot easier than maybe it would have been if we didn't have. You in our corner and and advisors that we did.

[25:15] Yeah I still and I I agree too because it's at the end you're just like wow we just let a big sigh of relief out because I don't and then your normal job becomes easy because you've been doing your normal job plus all this on top of it and in some cases you know you can delegate some of that stuff but a lot of it has to run through your through your email through your computer you're going to be the 1 that tracks down all the stock certificates and you know all the different things that the legal the legal side does get a bit of of. The Luminous because of the evidence that they need for the Department of Labor um at the same time you know it it cleans everything up, and you're kind of like now you're you're I think 1 of the biggest benefits in my mind is you don't have to worry about now what happens right because now you know what happens it's all it's all kind of set up and now you're you're kind of at the helm of running, an employee owned company um which again you haveyou're learning that too right at the same time. Yes learning as we go and I think now is just more of what do we do now what do we what do we need to do and you know our TPA now is kind of in charge of telling us exactly what needs to be done and when it needs to be done plus our trustee um so you know we we definitely have still people in our in our Corners that are telling us what needs to be done and when and uh thank goodness they're there because.

[26:35] We're still learning as you said it's it's uh it's just a process and you know I'm hoping that you know by next year we'll be more in a smooth path and we know exactly what to expect and when stuff needs to be done and and processed and turned in and um, so we're we're definitely looking forward to uh riding the wave if you will.

[26:55] Yeah for the record we you we closed at the what middle of last year right so July July so you're still in that 12-month of you know that post-closing I would call post-closing learning curve you know to get right you know everything up to speed, um to where it becomes hopefully more like clockwork and then every year is kind of now just doing the same thing but same thing like taxes and whatnot that you have to have and in in your situation um because you have multiple offices you know howtalk talk to us about how did you I know we helped you a little bit on the communication side but ultimately like you you're you're a great communicator how did you go about.

[27:33] Getting the message to your people and how are you guys doing that kind of on an ongoing basis as far as teaching them about the Esau, sure um so whenever it first came out uh that we were converting to an ESOP we held employee meetings actually it was with um your team. And uh so we we held that for I think it was 2 different sessions for all of our employees to attend and it was just kind of a general information, overview of what an what an ESOP is what it means to them uh and what it will mean going forward, I think that was very well received um from there we we actually came we designed t-shirts for all of our employees it's it says in you know they updated our logo to have employee owned on there um. And just so the other thing that we do is we through our way cards are fundamentals as we try to bring it back to. Uh ownership in the ESOP and so each week we have a different fundamental that we cover and we send out to our employees. And having some aspect of the ESOP that's shown in there I think is just an added bonus to remind people that oh yeah.

[28:40] We're employee owners of this company so we need to take a little extra pride and and get our uh get our jobs done efficiently and as well as we can so yeah.

[28:50] That's kind of the other part that we do for communication um it's really just as we see everybody we just kind of hey remind you, uh of the ownership and and what it means to you and we have comments all the time about you know so. I can just park in your spot whenever I get here since I'm an owner and that kind of thing but yeah share share your office I guess and tell you what to do open door so go for it. Exactly and so 1 thing about like what you said and and and you touched on it a little bit earlier too is just this Isco way cards that you guys have you guys have before I even got there you had a great culture I mean I would just say I know that because I got into the building and apart from the ghost everybody's super happy and. You know and and I think that's important because a part of the transition of being an ESOP is you get the opportunity to just continue to extend. A good culture and now we get to the tool of the ESOP right on top of it so talk a little bit about like your because you're the president now and I think part of that role is like you got to be the culture guy you got to be you know the figurehead and help. Continue to build culture is like 1 of the things you just got to keep feeding it like it just it never it never it has to be fed what from your perspective. How does that work and terms of just transitioning that is your culture changing at all with this and if if it is in what way.

[30:13] I don't think it's necessarily changing maybe improving I think that we've got a little bit more of that on it mentality that's that's spread throughout the company. Um you know the good part about us is yes we do have a good culture but we have so many good uh managers and employees in place that do their job and just own it every single day. Um so there's not a whole lot of added communication that I need to do uh when it's being preached from the ground up.

[30:40] You know we have uh employee meetings that are Madison Branch frequently where our manager is constantly preaching about the employee ownership side and just reminding everybody about how much of a benefit this is for them and. You know um it it's it's just kind of fun to see I guess just uh. Well I I I do try and communicate as much as I can whenever it comes to this side of it I don't always have to be the sole voice that does um you can just kind of see it resonate throughout the entire company, yeah especially you've touched on it I was going to say it too like you're you have multiple locations and that's a that's a reality for a lot of companies is like now they have. Multiple locations how do they how do they build culture in each of these offices anyways there's always going to be an issue now on top of it the employee owned company concept so and you're not going to be in every office all the time did you go do a like a. Circuit tour of like the offices or how did you do that.

[31:37] So 2 of our branches only have 2 people so those are pretty small and those were done with phone calls 1 of them is in Connecticut so uh I haven't made a trip out there just yet but that'll be soon, I'm trying to get out there this year. Are Madison team we've had multiple trips down there in conversations we've got uh an employee dinner that's coming up next week where we're my brother and I are going to go down there and talk with them all about how the year was how we did and all the changes that came about and that'll be an exciting thing that we can all share in and talk about uh the changes the improvements the things we need to do for this coming year and Beyond umso it's been good and and so so with the. Part of the culture too is like with your key people and you know and I and when I say key people I mean I don't really have any definitive like it could be. All the all the people that run the office is like your branch manager whomever like you think is a key person um is there anything that that stood out for the key people that are more kind of like if you take your rank and file and you go to your circle to keep people and of course you and your brother in the middle of that and then your board is going to be overseeing it. Um that you felt like was important to the key people as far as the long long-term plan, and that could be as simple as hey we're just being open about what we're doing you know our our business plan yeah I think just.

[33:00] Sharing as much information about everything as possible was was good uh in terms of helping everyone understand why we did what we did and uh the process around it um you know I I think as a company who traditionally doesn't have or hasn't had much debt at all so now going in and having these notes. Um has been a big change for us and a little bit change in our mindset away from growth and more of you know. Sustainability and making sure yes we are still wanting to grow but uh some of the Strategic decisions may have been postponed a little bit until we see exactly how this affects us over the long term. Um and I think just sharing that information with all of our decision makers and our our management team uh really allowed them to see you know open kimono if you will just to see everything what that's going on and I think the more everybody knows the better they are equipped to handle all the decisions for for uh their branches their departments and everything. Yeah I've I've seen it you know and you mentioned the debt side because I think that's such a a relevant issue of the beginning steps right the beginning step of being an ESOP specially going from um 0% to 100% ESOP is there's going to be the reality of debt and what we have is the benefit of being tax exempt because you have that.

[34:22] But there's a there's got to be a sense of like you know, burden that hey we got to get that debt off the books right and that's got to I know that probably does shape the way you guys think about your next few years I I have the benefit of seeing this stuff work out with companies and I can tell you but the most part I've seen companies just blow the debt away like because the tax benefits I've seen it happen like they've hit their numbers. Cash is there the cash isn't going to be siphoned off either by the way because it doesn't get siphoned to the shareholders anymore it's just there and then it starts building up um so I've seen companies that we did their esops like years and years ago and now they're completely debt free and then the cache is just ballooning right now they have the issue but I think that that's a a relevant thing to think about because you do kind of have that sense of Burden right I got to figure out this this part of it um and getting people I think what you said really is really good because getting your people involved in that.

[35:21] They need to understand the more they understand what you're thinking um the better it is because I think too sometimes people if they don't know, sometimes it can drift negative like oh well this thing's not working so getting them involved in that in that sense of. Instead of a business problem it's just a fact that you have like you guys mortgage the house the house has a mortgage on it the more you debt the pay the debt off you more Equity you build, it's as simple as that so it's like let's rally the troops build cash flow that's why I got my I love Ava shirt on because it's all about Ava um. Yeah so anyway the point is is that that you've got to be realistic about it and then once you see a couple years click Buy and they start seeing the debt come off.

[36:03] The value go up then it's like you can build some great momentum around that. For sure and I think too it it kind of helps in the decision-making for not just me but for our department heads whenever they're factoring in the ROI so if they want to make an investment I'm preaching Roi because we need to have it. Uh and so they're they're being a little bit more Analytical in their decision-making and I think that's really improved everything.

[36:27] Yeah analytical with growth and costs you know being careful not to hire more people than you need careful to be turning the lights off I mean but that makes like a good business right everybody's like more. Owner mindset like Hey how do we actually going to do this together and that really is the point of being an ESOP um it's just it's just another Journey how do you get there how do you communicate it um and I think what you've started off with is really good because. The the statistics are there like if you are a communicating this regularly to people they're going to get it and they're going to make it they're going to all be rowing in the same direction and and that will create and Propel you know the value of the business going forward for everybody, so that's the hopethat's the hope so with with all of that I I we're kind of almost out of time anything that you would kind of throw out to people that are thinking about, being an ESOP company and you know things that you've learned or anything that you would say now that you are a new sub company things that you've learned kind of a a wrap up summary from your perspective.

[37:27] Yeah I I think the initial shock was more about the debt and what you're taking on but the more you read and understand about an ESOP and how it works. Um for me it kind of ease that burden a little bit um.

[37:42] Learn as much as you possibly can when you can because uh the more you know the more informed of a decision you're going to be able to make uh.

[37:50] Especially for a decision this big whenever it comes to an entire company so uh. Read learn whatever you can hire the right advisors uh people that make it easier for you so that that's definitely what we did and uh helped throughout the entire process and still continues to help today.

[38:07] Cool well Jason thank you so much for being on today I super helpful for people to hear Hands-On what it's like and you know where you are and maybe in a few years we'll do this again and see where you guys are with with all the other stuff because those are always interesting as well. Sounds great thank you for the invite and it was great talking to you Philip.

[38:24] All right have a great day you too for everybody yeah for everybody else thanks for listening today and enjoy the next step on your journey to an ESOP.