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Keeping Leaders Without Giving Away Equity with Devon Cury · Budget Your Business

• 0:00
  Devon Cury: Cash flow, clients, things that are happening in the transition until he replaces the executive loss.
• 0:06
  Speaker: Welcome to the Budget Your Business Podcast, where small business owners go to learn how to financially plan for every aspect of their business.
• 0:13
  Speaker: Let's get started with your host, Scott Geller.
• 0:16
  Scott: Hello, and welcome to Budget Your Business.
• 0:19
  Scott: Today, I'm joined by Devin Curry of SAST Financial Group.
• 0:24
  Scott: Hello, Devin.
• 0:25
  Scott: Thanks, Kevin.
• 0:26
  Scott: Thanks for coming on board with me today.
• 0:29
  Speaker 2: Appreciate you having me.
• 0:30
  Scott: Thank you.
• 0:31
  Scott: Absolutely.
• 0:32
  Scott: So, Devin, I I've been in the corporate.
• 0:36
  Scott: I've also worked with a lot of small businesses.
• 0:38
  Scott: That's that's where I operate, and that's the purpose of this podcast.
• 0:41
  Scott: And one of the I I've seen the differences between the corporate level and the small business level in a lot of different ways.
• 0:49
  Scott: And one really big area is around compensation and really the ability to maintain employees.
• 1:00
  Scott: For the corporate space, they have a couple more tricks of the trade that small businesses, the traditional small businesses may not have.
• 1:12
  Scott: That's where I wanted to go with today is you bring some experience, an interesting experience and area around executive benefits in that small business space.
• 1:23
  Scott: But before we jump in, I'd like for folks who are meeting you for the first time to get to know you a little bit.
• 1:30
  Scott: So could you share a little bit about who you are and what you do?
• 1:35
  Speaker 2: Absolutely.
• 1:36
  Speaker 2: Thanks, Scott.
• 1:37
  Speaker 2: So I my name is Devin Curry, and I am the managing partner and founder of Sasta Financial Group.
• 1:45
  Speaker 2: Sasta is a financial services firm that specializes in the design and implementation of executive benefits, so customized solutions for closely held businesses.
• 1:58
  Speaker 2: Our typical or target audience are companies that have revenues usually between 10 and 50 million.
• 2:05
  Speaker 2: And I work with the owners on retention strategies to help them to maximize the value in their companies.
• 2:16
  Speaker 2: And through that, there are additional services that are often engaged.
• 2:21
  Speaker 2: And so part of my practice as well is in the personal wealth management services space.
• 2:28
  Speaker 2: So those clients typically are either executives that have participated in these types of incentive plans or the owners often that have transitioned or had some kind of liquidity event and were looking for guidance on you know kind of how to manage uh those resources.
• 2:48
  Scott: Right.
• 2:48
  Scott: And that that's a very specific area is executive benefits here, Devin.
• 2:52
  Scott: And how to curious, how'd you get into work in this executive benefits space?
• 2:57
  Speaker 2: Great question.
• 2:58
  Speaker 2: So early on, when I first uh entered into financial services, unlike uh many, so in the early stage, many come into it and they work with what is called a natural market, right?
• 3:12
  Speaker 2: So it's it's people that are part of your circles, you know, your community, family, friends, all those kinds of things.
• 3:20
  Speaker 2: Uh well, I actually transplanted, I moved to the uh DC metro area, uh, didn't have an expansive network, so I had just immediately dove into a small business community.
• 3:32
  Speaker 2: And one of my very first clients was an engineering firm in Alexandria, Virginia.
• 3:40
  Speaker 2: And we were able to help them with an internal purchase and the implementation of an executive benefit strategy that facilitated the ability for the successor to uh finance and make that purchase.
• 3:55
  Scott: Okay.
• 3:56
  Scott: Well, thanks.
• 3:56
  Scott: Appreciate that.
• 3:57
  Scott: I always like to get a little background story on where where people came from, if you will, as well.
• 4:03
  Scott: Sure.
• 4:04
  Scott: Let's start off with you know, we've thrown out executive benefits here several times, and and you hear about this in the news and in articles, but a lot of times it is around what corporate executive benefits there are.
• 4:19
  Scott: How does this or what does executive benefits mean for small business owners?
• 4:26
  Speaker 2: Yeah, I I think it's a misunderstood area.
• 4:30
  Speaker 2: I think all too often in the small to mid-market space, I think the owners typically, you know, obviously their most valued asset is the business itself.
• 4:40
  Speaker 2: And thinking in terms of executive benefits, often they may think that is an expensive uh proposition or piece to consider.
• 4:51
  Speaker 2: And what's really interesting about it is that it's it's a very customizable solution.
• 4:58
  Speaker 2: Um typically the programs that I set up can range anywhere from a key person to a leadership team.
• 5:07
  Speaker 2: So it's anywhere from a one-off customized solution to you know, maybe as many as eight to ten executives or kind of C-suite, if you will.
• 5:18
  Speaker 2: But I think it it is misunderstood in that you know, a small business doesn't think that they have the uh capacity or bandwidth to be able to put that type of arrangement in place.
• 5:30
  Speaker 2: And uh that's you know part of our process in discovery to help them understand uh what they can do, the uh the flexibility on design, and uh, you know, make sure that you know it's a it's a sustainable game plan and strategy, I think is very important.
• 5:48
  Scott: You you threw out an example on a on a on an individual basis of key man life insurance, and that's I agree is very important that I see a lot of business owners missing out on.
• 5:59
  Scott: Well, let's also talk about those companies that have maybe maybe it's just one person, maybe it's it's it's one to five people in their leadership team that are considered the executive or leadership team.
• 6:15
  Scott: Can you be a little more specific around like what could executive benefits look like for that kind of situation?
• 6:23
  Speaker 2: So I think the first thing to understand is a sustainable cash flow because the plans and structures they're referred to as LTIPs, long-term incentive plans.
• 6:35
  Speaker 2: And those kinds of structures by design are not meant to just be annual bonuses.
• 6:41
  Speaker 2: This the this stacks kind of on top of that.
• 6:44
  Speaker 2: It's not meant to necessarily replace existing incentives or or you know compensation arrangements that they've had in place.
• 6:53
  Speaker 2: This is above and beyond or in addition to those annual bonuses, if you will.
• 7:00
  Speaker 2: Now, ultimately, they may decide to allocate a little bit differently once they've adopted this type of plan.
• 7:07
  Speaker 2: But you know, we talk extensively about that.
• 7:10
  Speaker 2: When I say sustainable, right, so one of the things that the business needs to have demonstrated is some consistency in revenue and in cash flow.
• 7:22
  Speaker 2: Right.
• 7:23
  Speaker 2: If there's a huge amount of volatility year to year for the business, and all businesses work a little bit differently, sometimes it makes it a little more challenging from a design perspective to be able to have a suitable solution because you know you want to be able to provide ongoing funding.
• 7:43
  Speaker 2: Should not should not be set up and then terminated or have that type of plan cease a couple years down the road.
• 7:53
  Speaker 2: Because again, the way it's structured, it's meant to be a longer-term type of arrangement.
• 7:58
  Speaker 2: And when I say long-term, Scott, I'm I'm really referring, you know, most designs on these plans are about a 10-year window.
• 8:06
  Speaker 2: So typically it is helpful for the person or team to have had a little bit of this of number one is continuity, but have worked with the company, you know, for a few years.
• 8:20
  Speaker 2: So the owner wants to have had a little bit of a track record with the person, the executive or key person, and and have confidence, you know, that they're going to be with them, that they're going to stay with them.
• 8:31
  Scott: You're saying this works better after they've been with you for a little while and maybe is not a hiring perk.
• 8:38
  Scott: So if they're looking for a new executive, let's say they want to bring somebody in as a full-time CTO, full-time CFO, does it just not really work in that case as well?
• 8:50
  Scott: Or is it just better practice to maybe wait till they're on board and and then offering these types of benefits?
• 8:58
  Speaker 2: So depending on design, what we're doing is we're essentially doing kind of a set-aside.
• 9:04
  Speaker 2: Think of it as a sinking fund.
• 9:06
  Speaker 2: And so the assets ultimately are, you know, the owner frequently will be the company, and the company is also the beneficiary.
• 9:14
  Speaker 2: And so, you know, the assets reside on the corporate balance sheet, right?
• 9:21
  Speaker 2: So the owner keeps the money until the benefit is paid often.
• 9:25
  Speaker 2: Now that's not, you know, 100%.
• 9:28
  Speaker 2: There's there are other designs where you can do, you know, more of an annual bonus kind of structure and have the key executive, you know, have the asset and the autonomy with regard to the that structure and policy.
• 9:43
  Speaker 2: But more often than not, you know, I'm I'm working with retention plans that are assets of the company.
• 9:51
  Speaker 2: And so the reason I share that is because when we look at a structure for somebody coming on and then they leave, it's important for the owner to understand they have no obligation many times, depending on the, you know, again, the design, to pay those assets out.
• 10:09
  Speaker 2: And so they they can keep it.
• 10:12
  Speaker 2: The only time, and you mentioned uh corporate owned life insurance, the only time there is an incident of insurable interest is on inception.
• 10:22
  Speaker 2: So once that happens and you have it approved through kind of the uh underwriting side with the company that is is is going to issue the contracts, that's the only time it matters.
• 10:34
  Speaker 2: After that, the person is entitled, the owner will retain that assets and all rights that come with that, which include the accessibility to any cash value or equity that resides in those accounts or those contracts.
• 10:54
  Scott: You you mentioned a couple times that the types of assets and the structure of this, and and then you just made a key point, I think, around the equity in these which means to me, we're not talking about you're setting aside cash in a bank account and holding it there.
• 11:12
  Scott: This is a different type of asset.
• 11:15
  Speaker 2: So, you know, I tend to um, you know, I've learned over the years that with a successful business, the best use of capital for the owner is reinvestment in his company.
• 11:29
  Speaker 2: And so, you know, even though, you know, a large part of my practice in business is on the personal wealth management side, you know, the trying to capture the same ROI within a portfolio of SP, you know, index stock or whatever, you know, relative to what a successful entrepreneur can do pales in comparison.
• 11:52
  Speaker 2: So, you know, first and foremost, the idea that, you know, we're gonna invest this money somewhere else that's gonna outperform the reinvestment in his business, you know, not not not a conversation that you want to, you know, try to not not a uh a battle you want to try to win, nor will you win it, because you know, they understand and know how to do well with what their business is.
• 12:18
  Speaker 2: So it that said, the products generally tend to be more conservative.
• 12:25
  Speaker 2: So the assets themselves, answering your question, reside in a product that most often is designed, it pays dividends and interest and then accrues on a tax-deferred basis and uh and is available for for a variety of uses.
• 12:44
  Speaker 2: Now, ideally, this is a set aside to what's called an unfunded liability, and that's uh just the kind of how it's uh described.
• 12:54
  Speaker 2: And the owner, you know, has full access.
• 12:57
  Speaker 2: Now, ideally, he doesn't tap those resources prematurely, but you know, in the event of unforeseen circumstances, you know, it is a it is our asset.
• 13:09
  Speaker 2: I will tell you one thing that's really smart about it is that from a commercial banking standpoint, banks love these assets, right?
• 13:17
  Speaker 2: They're very predictable.
• 13:19
  Speaker 2: Those cash values are safe money, and um, you know, I've had many business owners use them as collateral for other opportunities, as an example, business expansion, acquisition of another company, and creating leverage.
• 13:34
  Speaker 2: Doing those kinds of things can be very, very meaningful.
• 13:37
  Speaker 2: And you know, you so you may not see the ROI when you look at the policy, it's what it is enabling the owner to do.
• 13:50
  Speaker 2: So whether you think about it more broadly as a strategy to help you grow and expand your business, whether you think about it as a really solid way to hold on to the key executive, who, you know, if you look at the monetization of what they bring to the bottom line of the owner, and and most owners can tell you what their spread or profit is on those people, right?
• 14:18
  Speaker 2: So the C-suite typically between the CEO, the CFO, and maybe lead business development person can make up as much as 60% of the revenue for a small business.
• 14:31
  Speaker 2: And so thinking about that in the absence of those people in those roles, that's a lot of money that can go go out and be lost.
• 14:40
  Speaker 2: I was talking to just literally earlier this week, uh an key executive, and we were talking, he's in his early 50s, and we were talking about his runway and describing and looking at incentive arrangements, and he knows exactly what the owner will make year to year as a result of his contributions to the company.
• 15:04
  Speaker 2: And so the number in this case was about 250,000.
• 15:08
  Speaker 2: So as we looked at it, I said, so what you're telling me is, and that was net of taxes.
• 15:14
  Speaker 2: So what I'm saying, what you're telling me is as an asset value, right, assuming no growth, the owner of that company is going to enjoy $2.5 million as a result of you working with him over the next 10 years.
• 15:29
  Speaker 2: And he said, that's exactly correct.
• 15:31
  Speaker 2: And so then the question becomes is that worth protecting?
• 15:36
  Speaker 2: How meaningful is that to you?
• 15:38
  Speaker 2: And I don't think that owners often look at it that way.
• 15:42
  Speaker 2: Right.
• 15:42
  Speaker 2: And and again, it's it's back to what these plans can help you to do and retain and grow.
• 15:50
  Speaker 2: You know, whether it's it's looking at it that way, as what does this key person bring to our bottom line, whether it's it's looking at uh you know other operational opportunities, right?
• 16:02
  Speaker 2: When I mentioned collateralizing, going to the bank, taking a loan and using it for that purpose for expansion.
• 16:09
  Speaker 2: God forbid something happens prematurely.
• 16:12
  Speaker 2: And you know, this unfortunately, you know, person has passed.
• 16:16
  Speaker 2: And if that does happen, it's a in you know, an infusion of capital into the company.
• 16:22
  Speaker 2: And by the way, that's going to help the company and the owner to you know mitigate any interruption, cash flow, uh clients, um, things that are happening in the transition until he replaces the the executive loss.
• 16:37
  Speaker 2: And that's going to help the company and the owner to um you know mitigate any interruption, uh, cash flow uh clients, um, things that are happening in the transition until he replaces the the executive loss.
• 16:53
  Scott: That that's an interesting point, regardless of the reason, especially if unfortunately there there is and possibly passes away, that this this asset will help fund that period before they're able to kind of replace that person with the next critical member of their team.
• 17:12
  Speaker 2: That's absolutely right, Scott.
• 17:14
  Scott: Let's let's talk about the employee side for a moment.
• 17:18
  Scott: Because I I don't want to lose the that that piece of it.
• 17:21
  Scott: Why is this a retention and what tool and what does employee get out of it?
• 17:27
  Speaker 2: So, you know, often, particularly for the highly compensated, the amount that they're able to set aside in traditional retirement plans often is inadequate to meet their full income planning when they retire.
• 17:44
  Speaker 2: And so they have to do additional savings and investing.
• 17:49
  Speaker 2: And uh this is a a way, this is a piece of the puzzle, so to speak, for the the executive, right?
• 17:57
  Speaker 2: It's a way for them to enhance their their portfolio and savings that will you know add a significant you know asset when they uh are paid.
• 18:09
  Speaker 2: And so it's it's for that reason, and there's different forms of these executive benefits.
• 18:15
  Speaker 2: So there is a pro you know a design with non-qualified deferred compensation, which actually primarily is funded from the executive, where he chooses or she chooses to forgo compensation and uses it for more tax-deferred savings.
• 18:32
  Speaker 2: So above and beyond what they're called, they call qualified plans.
• 18:35
  Speaker 2: So a 401k plan is referred to as a so those kinds of plans have limitations, and those limitations are imposed by ERISA requirements on the kind of plans that we design, they are not required to comply to ERISA guidelines and standards.
• 18:51
  Speaker 2: So that's how you can actually build customized solutions and one-off incentives or programs for key people.
• 18:59
  Scott: When do those kick in for the individuals?
• 19:00
  Scott: Is that just part of the structure?
• 19:04
  Speaker 2: Yeah.
• 19:05
  Speaker 2: So again, I was referring to long-term incentive plans.
• 19:09
  Speaker 2: And, you know, typically what we see is like a 10-year design for that.
• 19:15
  Speaker 2: Now, with a non-qualified deferred compensation, there are designs with events and timelines that might be shorter than 10 years.
• 19:24
  Speaker 2: But at that, you know, it was not the owner making contributions most often.
• 19:29
  Speaker 2: With deferred comp, it is just as it sounds.
• 19:32
  Speaker 2: It's the executive saying, I'm going to forego some of my money now because I don't want to pay tax on it today.
• 19:38
  Speaker 2: And I will pay tax on it, you know, down the road.
• 19:41
  Speaker 2: So sometimes those strategies, you know, are shorter.
• 19:44
  Speaker 2: Um, might be a five-year window for that.
• 19:47
  Speaker 2: But essentially, it's just, you know, you're giving back the executive money that he would have recognized on the you know the prior, you know, five years or so.
• 19:56
  Speaker 2: With the long-term incentive plans, you know, think more in terms of that 10-year window.
• 20:02
  Speaker 2: And that's when the executive is going to appreciate and enjoy the you know, the distribute, the payment, the distribution, right?
• 20:10
  Speaker 2: That's when they will receive the bonus compensation.
• 20:13
  Speaker 2: And that is paid out two and a half months after commencement of the agreement.
• 20:19
  Speaker 2: So with with regard to a 10-year type of structure.
• 20:24
  Scott: And is it always 10 years or or can you structure it like let's say you want it to be five or or maybe seven?
• 20:31
  Speaker 2: Yeah, so you can design it in different ways.
• 20:35
  Speaker 2: And that's where you know we partner with their counsel, whether it be you know the CFO or their tax advisors or or other professionals, maybe their lawyer, on how they want it to work and to function.
• 20:51
  Speaker 2: That said, the funding solutions are different based on timeline.
• 20:56
  Speaker 2: So, you know, earlier here we were referencing where uh you know corporate owned life insurance fits.
• 21:03
  Speaker 2: Life insurance, by definition, in nature, is a longer term orientation.
• 21:08
  Speaker 2: So if I wanted to do something with a near-term distribution, I wouldn't necessarily look to a life insurance structure as optimal, right?
• 21:20
  Speaker 2: You can definitely do it, but I wouldn't necessarily fund it with that type of asset as a you know, versus kind of set aside and using other types of accounts.
• 21:31
  Scott: That makes sense.
• 21:32
  Scott: I understand where you're where you where you're going with that.
• 21:35
  Scott: At the end of the day, these things cost money, right?
• 21:39
  Scott: And and that's part of why you started with you need to have maybe a cash flowing business, you know, consistent earnings in the business.
• 21:46
  Scott: Can you give us an idea of how much this is going to truly cost an owner or how much does an owner need to put into this to to make it viable and and real for the for the executives?
• 21:59
  Speaker 2: Yeah.
• 21:59
  Speaker 2: So I think that's a really, really good question, Scott.
• 22:03
  Speaker 2: I look at it on just a more of a practical matter, right?
• 22:07
  Speaker 2: So understand what your intention is with this and the outcomes that you're looking for.
• 22:13
  Speaker 2: So you really the goal is a win-win, right?
• 22:17
  Speaker 2: The executive stays with you.
• 22:18
  Speaker 2: They've helped you grow your business.
• 22:21
  Speaker 2: You have not had to dilute any of your equity because you have this plan in place, right?
• 22:27
  Speaker 2: So, you know, clearly that was a win-win scenario.
• 22:31
  Speaker 2: And now the executive has earned this uh this bonus structure.
• 22:35
  Speaker 2: Well, if think about it in terms of timing, it needs to be meaningful, right?
• 22:41
  Speaker 2: So most often the executives that that we're dealing with from a compensation standpoint, you know, they're usually making an excess of $200,000 a year, right?
• 22:55
  Speaker 2: So comp wise, you might be, and it might be as as low as $150, but think in terms of about you know two on the lower side, up to, you know, I mean, I've I've seen some executives with all in with other incentives and things.
• 23:10
  Speaker 2: They could be, you know, making you know, a million, a million and a half dollars a year.
• 23:14
  Speaker 2: But if you look at it, you know, think in terms of a person making, you know, $250,000.
• 23:22
  Speaker 2: And 10 years from now, I'm going to pay you a bonus.
• 23:25
  Speaker 2: Well, it has to be fairly significant.
• 23:28
  Speaker 2: You know, one time salary to me doesn't do it.
• 23:31
  Speaker 2: Like that's not compelling, right?
• 23:33
  Speaker 2: I think it would need to be at least two to three times as a bonus.
• 23:38
  Speaker 2: So that final year, they'd have the regular earnings.
• 23:41
  Speaker 2: And then on top of that, you know, they could potentially receive, you know, uh $500 to $750,000 as a as a bonus.
• 23:52
  Speaker 2: And so thinking about cost to the business and the owner, or at least cash flow-wise, what they need to be able to set aside, you need to think about funding to meet that obligation.
• 24:04
  Speaker 2: So, in terms of a set aside, again, think of it as a sinking fund.
• 24:09
  Speaker 2: Um, and you are accomplishing other objectives, right?
• 24:12
  Speaker 2: The risk management piece should not be minimized because you're putting a very important piece in place to protect the business, right?
• 24:20
  Speaker 2: That said, it's really savings, right?
• 24:23
  Speaker 2: So the owner of the company is saving this money.
• 24:26
  Speaker 2: So think of it that way.
• 24:27
  Speaker 2: So from a savings perspective, right, it's gonna cost me, if I want to pay off $500,000, it's gonna cost me about $50,000 to set aside a year to be able to meet that objective.
• 24:38
  Speaker 2: So, you know, and again, it's case by case and situational.
• 24:43
  Speaker 2: So what that structure looks like is really up to the owner and their circumstances.
• 24:48
  Speaker 2: But usually on a funding perspective, that ranges anywhere from, you know, about depending on how big the team is, it can be, you know, 50 grand for a one-off situation for a smaller business up to a couple million dollars if you had a more expansive business with a a broader leadership team and you had the cash flow to support it.
• 25:14
  Scott: Thanks, Devin.
• 25:15
  Scott: That that that's a nice range.
• 25:16
  Scott: I I get it, it it always depends, but that that that's a nice range.
• 25:21
  Scott: With that type of range, where do you see this making sense?
• 25:25
  Scott: Like what type of business, what size of company, how many people do they need to consider?
• 25:30
  Scott: Like, is there a kind of is there a minimum that a company needs to be hitting for this to make sense?
• 25:39
  Speaker 2: I don't necessarily think that there is a minimum, particularly, you know, when you can do it in a one-off situation for a key person, you know, certainly that can exist in you know any number of companies.
• 25:54
  Speaker 2: As far as a true, more defined executive benefit plan on a broader scale for a scalable company.
• 26:01
  Speaker 2: Now we're talking about the companies that are in that 10 to 50 million spot.
• 26:05
  Speaker 2: You know, you're probably looking at at the that key leadership team, right?
• 26:11
  Speaker 2: So you're looking at the uh president.
• 26:13
  Speaker 2: So you may have a separation between the owner who's a CEO, who has an active president, their right hand is uh vice president, CFO, COO.
• 26:27
  Speaker 2: Those individuals would be the ones that you'd want to probably include in that kind of structure.
• 26:33
  Scott: So Yeah, and I I know we're we're we're kind of rolling up on our time here, Devin, but I do want to ask one more question that I think is is pretty critical with all of this is do they really work to retain people?
• 26:52
  Speaker 2: Yeah absolutely.
• 26:53
  Speaker 2: So what's interesting, you know, I've I've been in this this business, you know, I I started, you you asked how I got into it.
• 27:00
  Speaker 2: You know, it's it's interesting because as when you're early into the industry and career, uh you hear about case studies, but you don't really have any true experience.
• 27:12
  Speaker 2: You know, now having worked in this area for these years, I I've been able to appreciate and enjoy, it's very gratifying to see it work.
• 27:24
  Speaker 2: And so, you know, I mentioned that engineering firm that today is thriving in that succession leadership.
• 27:31
  Speaker 2: So that young engineer, so the structure of that was the uh the owner, CEO of it was 52 years old.
• 27:39
  Speaker 2: The up-and-coming star was a mere 36 at the time.
• 27:43
  Speaker 2: And he had a lot of talent.
• 27:45
  Speaker 2: He had worked with him for seven years prior.
• 27:48
  Speaker 2: And he said, you know, this this guy has a future.
• 27:51
  Speaker 2: However, he was first generation to this country.
• 27:55
  Speaker 2: He did not have deep pockets, he had a young family, a couple of kids, and uh, you know, he uh he did not have the economic resources to be able to be a succession uh on paper, like so to to purchase.
• 28:09
  Speaker 2: That said, you know, by virtue of the design, we systematically funded it over, you know, a 10-year period, and he rolled it out within a I think the exit was actually overall, it was about a 14-year exit strategy, right?
• 28:28
  Speaker 2: That it was all done at the end of the period.
• 28:31
  Speaker 2: Um, but today, you know, that whole design enabled the owner to you know see the continuity and the legacy of what he established, which he found very rewarding, helped this this young guy who helped him do very well.
• 28:48
  Speaker 2: And today the business is is tremendously successful and and this this individual you know got a lot out of it, the company got a lot out of it, the owner got a lot out of it.
• 28:59
  Speaker 2: So ideally that's what you want.
• 29:01
  Speaker 2: You want win-win-win, right?
• 29:03
  Speaker 2: Right.
• 29:03
  Speaker 2: And uh, you know, that's as it when it works that way, it's it's great.
• 29:07
  Speaker 2: So answering your question, yes, they work, and it can be, you know, really, really impactful.
• 29:13
  Scott: Well, Deb, I I like to wrap up all of our shows with one to three immediate takeaways that our listeners could literally put into action as soon as they turn out the podcast.
• 29:23
  Scott: It might be something you've already mentioned, which is fine, you can remind us, but what can you share with us today?
• 29:30
  Speaker 2: So, you know, one of the things for any small business, I think liquidity is is key.
• 29:35
  Speaker 2: So having a level of reserve capital and a set aside, you know, often the types of plans that I set up are you know really ideal for that, you know, as a as a reserve, not for operating capital, but you know, kind of the rainy day money.
• 29:52
  Speaker 2: And so one thing I would say is important is to make sure that you know they are doing that diligently, setting aside resources from cash flow, you know, really on a on a monthly and quarterly basis to build that that adequate reserve.
• 30:10
  Speaker 2: I think that's that's very, very important because things can change.
• 30:13
  Speaker 2: You know, any business owner understands that.
• 30:15
  Speaker 2: The other thing is, you know, we need banks, but you know, 30, 40 years ago, banking relationships, you know, community banks were very different than what uh the world looks like today.
• 30:28
  Speaker 2: And so, you know, any almost every business owner can remember, you know, when they went in and got started, right?
• 30:36
  Speaker 2: A lot of times they they use their own assets and resources to start or friends and family as uh you know the way we get our business up and running.
• 30:45
  Speaker 2: And then once you you kind of burn through a little bit of that, you know, okay, I'm gonna go, I might get a small business loan, uh, or I'll go to a local bank.
• 30:52
  Speaker 2: And you know, things are great when everything's working well, but when you really need them and you need the money, it's hard to get to it.
• 31:01
  Speaker 2: Or they're gonna charge you an egregious rate, you know, for that money.
• 31:05
  Speaker 2: And so, you know, part of what I would say is is to strict be strategic in thinking about the financial picture, have the foresight to anticipate the un, you know, the the unanticipated, the things that you don't think are gonna happen, um, and be prepared for that.
• 31:24
  Speaker 2: And and some of these programs can be, you know, really helpful in navigating through some of those challenging times.
• 31:34
  Scott: You mean you mean like COVID, like something you wouldn't expect to happen can happen?
• 31:37
  Speaker 2: That's a little extreme, but yes, that's exactly right.
• 31:40
  Speaker 2: Who would have ever thought, right?
• 31:42
  Scott: Uh well uh we also like to ask all of our guests if there's a good podcast or book recommendation.
• 31:50
  Speaker 2: You know, I I like a lot of you know self-improvement and and things of of that nature.
• 31:56
  Speaker 2: And uh, you know, there's some good podcasts out there.
• 31:59
  Speaker 2: I heard one recently.
• 32:00
  Speaker 2: It's called Success for the Athletic Minded Man.
• 32:04
  Speaker 2: And the caption on it was how I escaped the grind, built a mastermind, and double my results.
• 32:11
  Speaker 2: Really good, uh, really good program that you know if you have the an opportunity to to to to hear, uh I enjoyed it.
• 32:21
  Speaker 2: I thought it was good.
• 32:22
  Scott: Great.
• 32:23
  Scott: Well, this has been great, Devin.
• 32:25
  Scott: Where can people find out more about you online?
• 32:29
  Speaker 2: So uh Sastafinancial.com is is our website, and you know, it's it's designed as informational, so it's not uh a heavy interactive site where you know any there's there's no you know product pitch or anything along those lines.
• 32:46
  Speaker 2: It's just informational.
• 32:48
  Speaker 2: So there are a few brochures on there, but uh I think the best thing is to you know to engage.
• 32:55
  Speaker 2: You can hit the site, has my contact information there, and uh be absolutely happy to to reach out and uh and follow up.
• 33:04
  Scott: Perfect.
• 33:05
  Scott: And thanks for joining me today, Devin.
• 33:07
  Speaker 2: Thank you, Scott.
• 33:08
  Speaker 2: Enjoyed it.
• 33:08
  Speaker 2: I really appreciate it.
• 33:09
  Speaker 2: Have a great day.
• 33:11
  Scott: All right, folks, that's it for today.
• 33:13
  Scott: I hope you enjoyed this episode and check out another one.
• 33:17
  Scott: Thank you.
• 33:18
  Speaker: If you like the show or found something useful, text someone right now and say, I have a podcast recommendation to check out budget your business.
• 33:25
  Speaker: You can also like the show or find more at your favorite podcast locations Apple Podcast, Spotify, and Amazon.
• 33:33
  Speaker: Thank you for listening, and we hope you join us for our next guest on Budget Your Business.