Episode 26: You're not for sale, but....

In this episode we talk with Tim Hilligoss,  Shareholder at Clayton & McKervey.  As a trusted advisor, Tim guides clients through business transactions, tax issues and international expansion. 

Tim and Bryan discuss what business owners can do if they are approached to sell, but are not quite ready.  Tim lays out several scenarios to help get business owners thinking about "what's next?"

Guest Tim Hilligoss
https://www.linkedin.com/in/timhilligoss/

Host Bryan Powrozek
https://claytonmckervey.com/team/bryan-powrozek/

For more information on Wipfli, please visit our website at:
https://www.wipfli.com/manufacturing. You can also contact us here.

Transcript

Tim Hilligoss: What I will tell you is for any seller, having a robust process is probably going to end up with the best result. If you think about it, I have certainly had entrepreneurs approach me and say, "Hey, we're thinking maybe in the next five years, but I would never sell to a private equity firm." And what I would say to them is "Never say never.", because you could be an add-on to a great portfolio of companies that were created that gives you the best value. First of all, they might be the best buyer for you, the best buyer for your management team. Imagine you've got some really, really good players on your team and your business is where it's at. And private equity firm lets that kind of person flourish where they can be a part of a growth plan that maybe just isn't part of your growth plan, whether it's age or the lack of desire or ability to continue to invest in your business. So I would say that you should kind of have more of a shotgun pattern than a bullet pattern. You really need to, and again, seeking that strategic team where you get to hear that humility I talked about. You get to hear everybody's pros and cons. And I have had many, many entrepreneurs and many who know their business inside and out and know what they want at that time. And what I would say is sometimes they don't know what they don't know. And what they might not know is getting yourself the best value or the best options is the best position for you to be in. And by the way, there's nothing that still says you can say no to every financial or private equity buyer and only sell to a strategic, but at the very least, what you're getting is probably a more fair representation of what your company might be worth to the open market. 

Speaker 2: Welcome to the Sound of Automation, brought to you by Clayton and McKervey. CPAs for growth driven businesses. 

Bryan Powrozek: Hello and welcome to the Sound of Automation. I'm Bryan Powrozek with Clayton McKervey, and joining me today is my colleague, Tim Hilligoss. Tim, how are you doing today? 

Tim Hilligoss: I'm doing great, Bryan. Thanks for having me. 

Bryan Powrozek: Oh, thanks for coming on. And so today we're going to be talking a little bit about transactions and how business owners can get their business ready for sale and maybe what to do with if they're approached and they're not quite ready. But given that so few business owners, they may only go through one transaction in their entire ownership career, can you lay out just at a high level, what are the typical steps that a business owner goes through when selling a business? 

Tim Hilligoss: Okay, so I would say just a little background. So I've been in public accounting for about 30 years and throughout my entire career, you've had clients who've either bought something or sold. And I would agree with you that it's often the biggest and often there's just one transaction they'll experience in their life. So it's pretty important. I'd like to think that there's a couple things that happen. I call one is the phone rings, and that's you're not really for sale. And so how do you handle that private equity firm? A customer, a competitor, maybe even an employee comes in and says, "Hey, you ever thought about your transition or your exit strategy?" And so that's more that urgent phone call. And I suspect it within our listening group here, there's several that are getting phone calls constantly because there really is a market for it. There's money out there, there are investors who are looking for opportunity and those investors put people out on the streets to try to find something to buy. And then the second one would be, I'd say that knock on the door, the knock on the door is maybe you're a little more proactive, you're building something, you're understanding the process and maybe the exit or the sale of the business is a part of your strategy, or maybe it's further out, but there's other nuances of selling your business that become a part of your planning strategy. And it could be by sell agreements, handling your estate, planning, thinking about the next generation, how either management or your family might take over your business. So there's a lot of things that go into those steps. That's kind of the way that I see most of my firm's clients kind of handling or experiencing transactions. There's always a few that are well thought out, maybe they were a part of another transaction and it's on their radar at all times. So that's usually that first phase is the I'm either planning it or I'm not planning it. In either case, the process is about the same, which really is kind of a pre-market situation. If you have enough time to plan, maybe you're putting your team together well in advance, and that could be an internal or an external team. And the more time or the more it's in a part of your strategic long term process at your organization, the more opportunities you have to implement strategies that professional advisors might advise. You have time to seek to understand and understand the process. But there's that pre-market process, which means putting your team together internally and externally, thinking about all the components. It's operations, it's HR, it's your contracts. So that pre-planning process with the ultimate goal is to put a team together that might market your business together. So if we're going down a path of we're going to be proactive, part of that team might be your lawyer, your accountant, maybe some key executives within your organization and an investment, very often an investment banker. And they're like your real estate agent as a simple analogy, their job is to market your business. They typically create what's called a sim, which is a confidential memo. It's kind of a teaser that goes out to the field. And so you've got that first step is to get all your ducks in a row, understand the process, put together a sim, and try to put together the most accurate package to avoid any kind of frustrations or surprises and make sure that your investment banker, as he is marketing your business, has the right information to hand off. The second part would be the marketing or the strategy of presenting your business. Most of the time that's going to have an investment banker or perhaps somebody internally on your team working through private equity firms, which would be more financial buyers. And then there may be some strategic buyers within the realm of your industry. Could be a peer or competitor, could be a supplier, could be a customer of yours within that organization, your industry, your niche. There may be a strategic group that would make sense to get this information. So that's the first two phases. And then real quickly, it kind of leads into what should an owner expect? Usually from that phase, you get what are called offers. You'll get either letters of intent or indications of interest. They call them LOIs or IOIs. And that kind of gives you the blueprint of what somebody's thinking. It usually has a proposed price in it, usually some terms, usually some expectation of confidentiality. And it would ask for or define an exclusivity period for them to go forward. And so you may get 10 LOIs or indications of interest in this marketing process and then your job comes. It's kind of fun, not necessarily, I shouldn't say fun because it is very stressful. This is probably one of the biggest things an entrepreneur goes through in their career is how do we find the right fit? And so you might narrow that 10 down to three. And those three, you're basically trying to get to who am I going to sign a letter of exclusivity to? Who's LOI am I going to sign? So that for let's say 90 days, these people have an exclusive right to look at my business and do the due diligence necessary to hopefully lead down a path of the next steps would be a purchase agreement, a closing, and then you'd finally typically end with some post-closing work and probably too much detail to go through any posts closing things. But there's almost always something that comes after the transaction, whether it's escrow or true ups of estimates that were made at a closing, but maybe in another podcast we can talk more about the details. 

Bryan Powrozek: Definitely. Yeah. I heard a presentation one time where somebody had drawn the analogy between buying or selling a house. It's not an identical match in terms of the steps, but it's very similar in terms of getting the offer. And then you get the inspection, which would be the due diligence and kind of negotiating from there and based on those results. So as you mentioned, there's a lot of those, you get a phone call or the knock at the door type transactions that come up. And business owners might not always have the time to, at that point get themselves ready for it. But really there's some things to go back to that selling a home analogy, if you're getting ready to sell a house, you're going to fix some of those things that you probably meant to get done. From a company perspective, what are some of the things that business owners typically look to get done before they start that process to get their business ready for a transaction? 

Tim Hilligoss: That homeowner home selling situation is a great analogy to this in so many ways, because the ultimate goal is always the same. How can I sell my business for the highest price? How can I help make sure there aren't any surprises in that process? And that whatever the offer is consistent throughout that process so that we marketed it at the right level, we've receive the right offers, and we ultimately got the right closing. And so similar to that, where you're decluttering your help and making sure any cosmetic things are there, I've heard about having great smells in the house and I mean there's no different here. When you're trying to get your business ready for sale, especially if you have time to think through this. Most of the clients that I deal with are closely held businesses. They run their business the way they want to, which is fine, they don't need any humility when they're in that process. But where they might need some humility is how do I get ready? What are the things I need to work through to make sure we're as ready as we can be? And I say this, that the humility they need in the process of selling their business is to know how someone else might look at them versus how they look at themselves. And I might suggest they turn off that humility at some point when they get into a process of negotiating. But when you're leading up to that to seek to understand is probably the best advice I can get. And you probably could break it into more groups, but there's probably three groups I might break this into. One might be the operations, one might be the people, and one might be the accounting records that they keep and the information that both their team will need to analyze to make sure there aren't any surprises and a potential buyer might need to analyze. So just real quick, let me just throw out a few things where we've helped clients identify issues. You might take your financial statements. And the first thing you should do is identify unique things that might impact the value. And if you go back to a house on the outside, buying a house on the outside, you'd never do it because especially in the region that we're in, you got plenty of new construction. But if you were looking at a house, let's say where I grew up, house built in the late sixties or early seventies, it may still have the original laminate countertops, the original old tile. My house growing up had orange countertops and dark walnut cabinets and that probably wouldn't fit right now, but you would never buy that house. You might buy that house, but your offer and what your expectations were of buying that house would be impacted by, "Hey, was that kitchen upgraded? Now does it have beautiful cabinets and a granite countertop." And so forth. And so the business is no different. So when a buyer is thinking about looking at your business, you got to understand, well what are they buying? They're typically buying your cash flow and your networking capital, your customer list is all a part of that network, a part of that cash flow analysis. And so it's really important to understand are there things you're doing that if you were, let's say a publicly traded or board run company you might not do or might do differently. And some of the easy things are, there may be special allocations for meals and entertainment, maybe you belong to some country clubs, you may be extremely generous with profit sharing or with bonuses. You may have professional fees that run through the business that could have been bifurcated between personal expenses and business expenses. And if you're setting up, let's say 401k plans or developing management equity plans or other strategic legal agreements, you might have a unique circumstances of legal fees that wouldn't really apply as carry forward. So it's important to understand what is your real cash flow to make sure that any buyer or your team understands what's, they call it EBITDA. So it's earnings before interest, taxes, depreciation, and amortization. And I have plenty of clients where if you looked at it on the face of their financial statements, it would be completely different than their true cash flow. And the reason is they could have bonuses for strategic purposes, they could have bonuses for special allocations amongst owners. So there's a lot of things where your financial statements may tell a different story than your true cash flow. And again, going back to it's important to make sure that anybody looks at your business, including your internal team, your strategic advisors understand what your true cash flow is. And the way that that really hits home is you think about most transactions are a multiple of cash flow or EBITDA. And so when you improve that, let's say you're in an industry that's eight or nine times EBITDA, well if there were some unique professional fees in there, say $100,000 for something that occurred and maybe you bought something and so you had additional costs, $100,000 times seven or eight, that's seven or $800,000 of value that wouldn't have been brought to a buyer's attention without going through a process of making sure our operations are and our records truly reflect the business. And then the second component in that for your records is your networking capital. And it's not unusual for me to see clients who've done well. We've come out of a probably 15 year plus period where interest rates were extremely small. And so how do entrepreneurs typically deal with low interest rates? Well, maybe they carry more inventory to make their life easier because it's virtually no cost. On a line of credit, they might have an asset based lending arrangement. And so you may have a client that is carrying excess inventory and no different than if you were selling the house and somebody's looking at the outside and going, "Well this one comes with the furniture and this one doesn't", your buyer needs to know that. "Hey, I want more because I'm giving you the furniture. I want more because I'm carrying extra inventory." And an equal side of it would be on the liability side. When a buyer's buying your business, they're typically buying that working capital. And I'll just quickly generally define that. It's usually accounts receivable inventory, prepaid expenses, accounts payable, and accrued liabilities. It's on a simple, very, very simple definition. It might be 30 days worth of operating working capital. And so it's not unusual for me to have clients, cash flows good, they're paying their bills in advance, and they might be carrying less than 30 days of payables. And so identifying that and normalizing that in your planning process. In other words, getting your records in the best shape they can be so that your maximizing value is important. The second thing is from operations, identifying areas where maybe you're aggressively expensing fixed asset or personal property purchases. And not that I want to give anybody an accounting lesson, but when you expense long term assets, what you're giving up in the transaction world is the depreciation component of that. And so there may be things where your repairs and maintenance are in access, and if you look through it, well we actually run rebuilds of equipment or maybe we're running dominimus equipment through or personal property through an expense account and we could have capitalized that and converted that to a greater EBITDA. So there's a simple example of how understanding operations and procedures might improve. I think from an operations standpoint, the more time you have to increase your value or retain the value through a purchase agreement or through a negotiation or due diligence, some simple things, diversity of customers, the more diverse your customer base is, the less likely that your value would be reduced for a customer concentration. Same thing with vendors, and same thing with your management team. If everything falls on the owner's shoulders, that might change the arrangement. There might be more of an earn out or contingency components on the owner sticking around. But I think diversifying your people, diversifying your customers and vendors is really important. I think another thing to pre-plan is when I talked earlier about trying to get your internal team together, and I mentioned attorneys being from Detroit, it's not unusual for us to have contracts with the big three, General Motors, Ford and Stellantis or Chrysler. And a lot of times those contracts may have been signed or negotiated years ago and they may have provisions that might have change of control provisions in them that might hinder or require more work and more procedures in a negotiation and a closing process. You may have a buyer that says, well we have to make sure GM's on board since that's 30% of your business. So we need to make sure that "Hey, this transition doesn't affect it." And it might frankly affect how the company's bought, whether it's an asset purchase or a stock purchase. So I think having your attorney involved in both employee issues and customer and vendor contract issues to make sure that even if you can't change those contracts, identifying that kind of information up front will let you know what kind of due diligence you need to do internally to make sure when your buyer's due diligence teams comes through, £Hey, you're ready for, hey our customers, here's the ones that have no issue or no mention in change of control, here's the one that maybe say they have to be notified and here's ones that have to agree to the terms or understand the transition or it nullifies the contract." And the third thing I talked about was people. In that process of getting ready, you've got to decide how confidential you keep this process. The last thing you want is rumors about you selling your business. And then people think, well boy, if we sell the business, it'll never be the same. The culture will change. So I want to put myself in the best position, I'm going to look for a job now. So you've got to decide, is this something where you bring people in or you exclude people from this process. You've got to decide are there key people that it's more important that they stay through a transaction or a part of a transition team to again retain and maximize value. And so do you have non-compete agreements with your employees that would prevent key people from kind of taking knowhow or customers elsewhere when you're trying to of course sell this business? Or do you bring your management team into the ownership group? There are many ways through vesting, through phantom and actual stock where you could actually create, we call it a management equity plan that might give you as well as your buyer, a better chance that key people will stick around through a transaction and want to be a part of the success of the business because they have a chance to earn some equity. And that, I can't stress enough about management diversity. If you're a one man shop, understand that there could be a longer time for a buyer to require you to stick around and help with the transition. And the more diverse your management team is, you could actually eliminate that all together. Where after a closing you're able to move on. So. 

Bryan Powrozek: What's interesting to me about that, and I'm kind of curious to see what your experience has been because you mentioned initially that there's different types of buyers, right? Strategic buyers, maybe you're selling to someone within the company. And I can see where as you're getting your company transaction ready, identifying what type of buyer you're hoping to pursue will impact, you talked about in record keeping. That maybe you're retaining a lot of inventory because you've got low interest on your line of credit. And so it's better to have it there ready to go. So yeah, if I'm selling to a strategic buyer, they might not want to carry that much inventory normally. And so you'd want to make sure you're reflecting that. But then also if I'm selling somebody internally, they may look at it and say, "Yeah, I agree with you that that's how I'd want to run the business as well." So how often in your experience do companies selling their business target a specific type of buyer versus it's the knock on the door and you just take whoever comes through the door? 

Tim Hilligoss: That's a really good question. I'm not sure the best way to answer that. What I will tell you is for any seller, having a robust process is probably going to end up with the best result. And if you think about it, I have certainly had entrepreneurs approach me and say, "Hey, we're thinking maybe in the next five years, but I would never sell to a private equity firm." And what I would say to them is "Never say never." Because you could be an add-on to a great portfolio of companies that were created that gives you the best value. First of all, they might be the best buyer for you, the best buyer for your management team. Imagine you've got some really, really good players on your team and your business is where it's at. And private equity firm lets that kind of person flourish where they can be a part of a growth plan that maybe just isn't part of your growth plan, whether it's age or the lack of desire or ability to continue to invest in your business. So I would say that you should have more of a shotgun pattern than a bullet pattern. You really need to... And again, seeking that strategic team where you get to hear that humility I talked about, you get to hear everybody's pros and cons. And I have had many, many entrepreneurs and many who know their business inside and out and know what they want at that time. And what I would say is sometimes they don't know what they don't know. And what they might not know is getting yourself the best value or the best options is the best position for you to be in. And by the way, there's nothing that still says you can say no to every financial or private equity buyer and only sell to a strategic, but at the very least what you're getting is probably a more fair representation of what your company might be worth to the open market. And so yeah, you might still be able to stand your ground and say, "Hey, this is the only way I want to do it." But having a robust process would certainly give you better selection and certainly more information. 

Bryan Powrozek: Yeah. And so at that point it just becomes important for the owner to realize that, hey, these are some of the things, as you mentioned, if it's the one man show you're going to have to stay on longer to help with that transition and just realize that these are the different levers and they'll impact it one way or the other. And there really is no one size fits all. This is what every deal looks like. And so yeah if you get that phone call and all of a sudden it's a PE making a great pitch, okay, you're going to have to adjust, which your expectations are a little bit in certain areas. 

Tim Hilligoss: It's definitely, what I would say is if you think about the various manufacturing in industrial automation organizations that I've dealt with, sometimes you're helping solve a problem that is not drawn out. You're creating something and sometimes you're making something that someone else drew up. And what I would say about this process is there might be a little bit of both to it, but out of the gate I would definitely not call it a build to print kind of environment. It really should be, I want this to be different than, as wide open as it can possibly be. And not so narrow that hey, one plus one equals two. They say the best example here is you'll hear the different things is your ultimate goal is to make one plus one equal three. Sometimes one plus one equals one and a half, or sorry, two and a half. And sometimes one plus one equals one and a half or two. And it's the uniqueness of your business and some of the things we talked about, the value of your networking capital and the diversity, those are all things that help you get to that one plus one equals three. That's the real goal. 

Bryan Powrozek: So, and I think that you make a lot of great points there on how if a business owner's being proactive, there's things they can do to maximize their value as they move forward. But oftentimes with small demand size business owners, they're so caught up working in the business that they don't always necessarily get work on the business. And so what advice do you have for the business owner who gets that phone call and they haven't... I guess all is not lost, if you haven't put the work in to kind of clean some of these things up. What should a business owner do if they get that phone call and now all of a sudden they got to play catch up and try and get things cleaned up? 

Tim Hilligoss: Well hopefully a bell goes off in their head that says, "Hey, right now I'm saying no because I'm not for sale." And what I would say to that is go back into that humility and seek to understand. Even though you're not ready to sell, could this be the best time for you? Is this the best market anyone has ever seen and we might not see it this good again? And so understanding how your timing may be different, and in that case, maybe there's a different way to go through this process. Maybe you don't sell all of your business and you still stay involved, but you try to take advantage of what may be the best market right now. So I would say seek out expertise. Don't be afraid to ask questions. This is that humility part. And the reason I say turn off the humility is because what happens in a transaction is things get difficult. There's people that this is all they do and they have the energy and the patience to negotiate. I'm not a very good Texas hold 'em player. I like to play, let's say more like a blackjack. Quick instant gratification. You make a decision quickly and in Texas hold them. It's more of a process. And I think knowing that this is more of a process, the listeners here might realize a weakness. Well yeah, I am that blackjack kind of guy, I just want to make decisions. Boom, boom, boom, boom. And that may not put you in the best position sometimes you got to understand why somebody's asking you a question. Sometimes you got to say, "Let me think about that." Or you got to say, "What else?" So when that phone rings, I would love for people to start asking questions and thinking about it. It's not unusual. I had a client in the candy manufacturing business, a very well known brand here in Detroit, and their phone would ring all the time. And we never discouraged the phone call or the conversation. Our process was to understand what people were thinking about. What did you hear about us that made you, I want to know why you made the phone call. Did you hear something good? Did you hear this? Nine times out of 10, you'll find out they're just cold calling and you can gain some information like, "Well wait a minute. What size company are you looking for? How are you planning to find that? Are you trying to take our customers and move them to your facility because of capacity? And then of course all my employees are gone, what I built here is gone." So we had a process in that case of seeking to understand and try to understand the calls that were coming in. And everybody had a different kind of angle, but it helped us to understand what people were thinking about, especially in that really aggressive investment banking, private equity world where they're really... The way private equity firms and investment bankers make money is when they put money to play. So investment banker makes money on all the closings. Private equity management team makes money when they put their investors money into play. When just sitting in a bank account, they're not making any money, but when it's invested in an industry or a business, they're making money. And so they're very aggressive. So what do you do with that? I got to understand this process. So maybe have a conversation, have a longer conversation with one of those people that call you rather than just say, "Hey, I'm not interested. Call me back in six months." The other thing is to seek out professionals. Talk to your accountant and talk to your attorney. I'm hesitant to say the locker room or water cooler talk, it really would be more locker room. Nine times out of 10, you're never getting the whole story. And nine times out of 10, your locker peer, your golf partner, whatever your racquetball, handball, squash, whatever, their business might be materially different than yours. And so every circumstance is a little different. And for somebody to say, "Oh, I got nine times EBITDA." And you're thinking, "Oh boy, nine times EBITDA. If I'm doing $5 million of EBITDA, I'm $45 million. Woo hoo." And you find out well the nine was with all kinds of contingencies. The nine was he was more diverse, the nine was his management team was more diverse and maybe there was a heavy, heavy earn-out or rollover required that was different than maybe what you want. And so a total cash deal might be a little bit different. So understanding that you got to be careful about the water cooler or the locker room talk because every circumstance is different. So seek out your professionals. And I think the other thing is, if that phone's ringing and not having these discussions with yourself, your professionals, your management team that might be brought into this, maybe your ownership group, it really should be. And it has other value. I mean you think about buy sell agreements you might have within your ownership group might benefit from understanding, "Hey, what's our real EBITDA? What is our real cash flow value? Where do we have access on our balance sheet where we might be leaving money on the table? If we had to initiate a buy sell agreement, do we have enough insurance to cover buy sell agreements? Identifying key management players up in advance, you know what maybe we should think about a vesting or long term equity plan? So key people. Right now, people are paying premiums, you're getting bonuses to leave your company and sign somewhere else. Well what better way to try to lock in key people for a future exit than to try to lock in your executives with some kind of potential equity or phantom equity plan? I think it helps with generational discussions. So there's so many management generational, just a could be ESOP=. There's so many things where when that phone rings, it should trigger you to make this a part of your thinking process. And the best advice I can say is understand the process the best you can. You're great at something, you're great at industrial automation. You may have a great engineering team, great, a great assembly and manufacturing team, your internal accounting team, all great. At the end of the day, you may not be great at understanding how a transaction works. And so figuring out and knowing as much as you can, I think can be the best advice I can give somebody when that phone rings. 

Bryan Powrozek: And I really liked what you said about taking the call even just to understand or understand what's going on out there in the market. Because I was talking with a client of mine one time and he was going through his forecast for the next year and it was like, "Well, how did you land on this number here for growth?" And he's like, "Well, it was 15% of what we did last year." I said, "Well why 15?" "I don't know, it's just what we always do. We always do 10 or 15%." And so thinking about the transaction is the eventual end of at least the business part of the owner's. Then there's, you get into the whole after ownership retirement, what are you going to do with all the money you make? But if you know, even if you're 20 years from selling your business where you want to get to, that then informs all those strategic decisions of do we acquire somebody? Do we invest in this new equipment versus, I can't remember if it was you or somebody else I was talking within the firm about if you go ahead and sync this investment in all this equipment, but the year before you go and sell your business, is that really the right thing to do? Or would the owners with the new owners potentially not have done that or do again? So it helps make some of that strategic planning in my mind go a lot smoother and give something to get everybody focused in the same direction and say, "Hey, are we doing the things we need to do to get this business to where we want it to be at the very end?" And so taking those calls helps kind of give you that sanity check if you're on the right path. 

Tim Hilleiss: Yeah, yeah. I think one of the things that I think is really important is that the people that you might be talking to are listening to this are really good at something. And I have seen it in my industrial automation clients where the details they get in working process, the information they need when they're bidding on jobs, it is so impressive on the process they go through. Now that's not in all cases. Sometimes I think that there is an occasional dart at the wall, but for the most part when they're analyzing stuff, their engineering mind kicks in. And I would say put that engineering mind into this process to understand things at a low level. Don't just presume, "Oh, it's millions, so I feel better." It's amazing how quickly... If you kept a scorecard at the end of most transactions, you might have the buyer's team wins most sellers team relents or gives in or negotiates down. There's books about not negotiating, not splitting the difference. And what I would say is keep that scorecard. Keep a scorecard just like would you do in your operations. And you think about, I've certainly had clients question a bill of mine for what in their mind was a lot. And in my mind in the grand scheme of a million dollar transaction is not. And so having that same thought process through a potential transaction, I think you have to stay as diligent in that process and trust that advisors afford a buffer between the emotion of the transaction, the economics of the transaction, and the strategy that goes from an owner talking to a buyer. There's a lot of opportunity there for the mentality of engineering to make a great process for some of the listeners here. 

Bryan Powrozek: Excellent. Well, so Tim, using your recommendation there of not hesitating to reach out to the advisors and get the right people involved. If someone listening to this podcast doesn't really have, or maybe they're just using a smaller accountant that's more focused on the compliance stuff, doesn't have an advisor, what's the best way for someone to reach out to you and be able to connect to pick your brain and get some of your insights? 

Tim Hilligoss: Well, probably two easy ways. I mean, the first would be calling my direct line, which is 248 936 9456. Or my email address, which is thillegass@claytonmckervey.com. So that's T-H-I-L-L-I-G-O-S-S@claytonmcckervey.com. And I may not be everybody's cup of tea, Bryan, but what I probably know is I probably know enough professionals that might support, or where some of your listeners might be able to talk to other people in the industry. We don't do investment banking in my firm. And the great thing about that is that it allows me to find the best investment banker for somebody. And in this case it might be just introducing a couple investment bankers for some of your listeners to be able to talk and understand the process. They're very patient industry and they love to meet people early in this process realizing that, "Hey, maybe there's something that they can help with now that might pay dividends down the road and might land them an opportunity to help sell your business." And same with the legal side of this. I would expect that many of your viewers or listeners rather have great attorneys, great corporate attorneys, maybe they don't have great transaction attorneys or attorneys who haven't done any transaction in a few years. And the nuances of the sell side and the purchase agreements, the complexity of purchase agreements, I think has gone tenfold in the last 10 years. And if you ever have me back, we could certainly talk about some of the nuances, for example, in purchase agreements and the way companies can be bought or sold there. You could probably do an entire podcast on just the diverse tax and accounting and transactional nuances of a purchase agreement. 

Bryan Powrozek: Yeah, no, definitely. I think we'll definitely have you back because I know this from companies I talked to, this is a huge area of interest. M&A activity is only projected to remain strong, especially in industrial automation. So if owners and listeners aren't thinking about it it's something they definitely need to pick up on. Well, Tim, I appreciate you coming on today and sharing your insights. I know I always walk away with at least one new thing anytime I get to hear you talk, so I'm hoping that the listeners did as well. 

Tim Hilligoss: Well, Bryan, it was great to be here. I appreciate the time. 

Bryan Powrozek: Excellent. Thanks Tim. 

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