EP 51: Exit Planning with Brian Trzcinski

Ed Mysogland  1:27  
I'm your host, Ed Mysogland. I teach business owners how to build value and identify and remove risks in their business. So that one day they can sell their business at maximum value when they want how they want and to whom they want. On today's show, I'm so stoked to have branches in ski of MassMutual. So welcome to the show, Brian.

Brian Trzcinski  1:44  
Hey, happy to be here. Thanks for having me.

Ed Mysogland  1:46  
Well, it's great to have you I before you came on, I did kind of a little introduction of you and how I've been hassling you for quite some time to come on the show. So once you give us a little bit of an overview of what you're doing at MassMutual. Because I do think what you do over there is a little bit different than a lot of shops do.

Brian Trzcinski  2:06  
Sure happy to. As you probably mentioned, I'm the director of business market development at MassMutual. And with that comes a lot of different activities and tasks that I'm I'm sort of responsible for in mass, Mutual's efforts with the small business market. So we do all of our own proprietary research, we manage all of the business valuation tools that we offer to our financial professionals across the country, we create all the seminar material workshop material, resource material that you'll find on massmutual.com, as well as what our local advisors would deliver to their local communities in the business market. And you know, it's really great, you know, we love supporting the small business market, we feel that, you know, with our foundation of business value, as sort of that, that stepping stone to doing effective business planning is really the most efficient and effective way for business owners to plan for their future. And we're always excited to have an audience of business owners who are willing to give us a lesson and in here we how we can help them Yeah,

Ed Mysogland  3:03  
well, you guys are really forward thinking I'm not familiar with anyone that was this far ahead in helping identify value got a mass mutual all of a sudden grab a hold of that and say, You know what, we need to be here.

Brian Trzcinski  3:17  
Sure, it wasn't always an easy road, because we're not credential evaluators, nor are advisors at MassMutual. Right. So it took us a little bit of time to have our financial professionals as well as mass, Mutual's as a whole. Understand that with us, it's all about understanding your value, as opposed to knowing your value. And those are two very different concepts, right, knowing your value is just having a number. And having a number is fine, but it's not actionable. At MassMutual, we train our folks and we communicate out to the market that it's all about understanding the value. And when you understand the value, you know, what's driving the value, you know, what the value drivers are contributing to that value, so you know why the number is what it is. And that's a much more acceptable activity for a business owner. And it allows them to take ownership of the numbers so that they can do what they need to do to either grow their business, if that's their plan, or to exit their business and turn their largest asset, if you will, into something that can be monetized. So again, as I said before, a business owner can't do effective succession retirement estate planning, without having that business valuation information, or the plan is just not going to hold together

Ed Mysogland  4:21  
in building or you've identified and the business owner has the option to build or exit or transition to whomever, how many choose to build to me it doesn't seem that we're seeing so many people say, You know what, I don't want to put the time, energy and effort and money into building this thing, sell it and I hope I get the needle in the haystack. Are you seeing that do?

Brian Trzcinski  4:44  
Well? That's an interesting question. And I'm going to even go a little step further back and answering that right because when we train and we work with business owners, we follow a process and the process starts with an assessment of the business and the personal financial position of the owner and their family. You can't make that decision to build or grow unless you, you've done that first. And then once you've done that, in addition to understanding the business value also identify red flags and risks that are in the business and in the personal financial position. And a business owner is it's a fool's errand on the part of a business owner to think they can grow their business until they've de risked it, that's the first step in the processes, they got it, they got to de risk the business, they got to de risk their personal financial position, then once they do that a business owner sort of comes to a fork in the road, and they have to have, they have to have sort of heart to heart with themselves and their family and their business partners to decide, am I is, is my motivation to grow this value and grow this business? Or is my motivation to say you know what, I'm going to plan my exit, a business owner has to make that decision. And they have to make it for the right reasons. Unfortunately, as I'm sure you see, a lot of business owners decide to grow the business, not necessarily for the right reasons, and they decide to exit the business, not necessarily for the right reasons. And then you shouldn't exit the business just because it's gotten out of your control, and you want it to be somebody else's problem. And you shouldn't grow the business only because you want to maintain your lifestyle that you've come to be accustomed to as a business owner, and you're afraid you're going to lose it when you exit, those aren't the right reasons to make those decisions. So business owners really have to sort of take stock and see, do I have the fire in the belly? Am I working towards a planned exit that I'm not quite ready to? And that's why I'm going to stay and grow? Or have I groomed successors properly? Have I built assets outside my business to fund my lifestyle appropriately? And that's gonna allow me to exit on my terms. So a business owner really has to have that, that sort of heart to heart with themselves and and make the right decision for the right reasons.

Ed Mysogland  6:39  
Yeah. And I do think that that is a real hard conversation for them to have with themselves. And I know, there's a few tools out there that kind of are thought provoking. And certainly the empirical evidence that you guys are sharing certainly makes you makes you think I mean, it's it truly, you know, having evidence having the question, and I think that's the part of the problem is I don't think anybody asked themselves the question, I think all of a sudden, life gets in the way, and it's all of a sudden, oh, my goodness, I have to sell my company because of health or pick the reason. And now all of a sudden, it's a fire sale, instead of let's control how we exit or how we transition or how we build. That's perfect segue into into my my question, because you started to touch on, you know, because one of the the whole reasons that I wanted you to come on was, you had talked about each time I've seen and I've seen you at least three times, you talk about income replacement value, and I hope that if time permits, we can circle back to it. But right now, I mean, we're recording this June 5 2020. So I mean, we're we're knee deep in or we're either coming out or we're getting ready to revisit COVID We've got social unrest. So I guess where I'd like to start is, rather than talk about income replacement value, how about income and value recovery for Small Business Owners? You know, what are you hearing from your clients, or what is MassMutual doing to help offset some of the craziness that the world is experiencing?

Brian Trzcinski  8:11  
We've really been hot on helping business owners understand that right now, the key is to keep things simple, as simple as they can. And really, we've boiled that down to four areas of focus in their business that really we think are necessary for that recovery that you mentioned. It's their leadership, it's their employees, it's their operations and Mr. cashflow, if they can focus and drill down into those four things right now, we think the businesses that have the wherewithal to recover will. And really the first step in that process is to do what Stephen Covey has had an exercise called the four quadrants. And basically what that says is that look, you have on one axis, you have what's most important, and on the other axis, you have what's most urgent, and a business owner really needs to take stock in what they have to do as an owner right now and plot those in those different quadrants. And the things that are most important and urgent, they got to do, right, and managing cash flow, right, taking care of their employees, things like that are going to fall in that quadrant. Things that are very important, but not so urgent, are things that they should plan for like updating your website, you're maybe researching some new suppliers, right things that are important to the business, but maybe not so important right now, you can put them on the back burner, and you can plan for those in the future. Then the next box is what's not important but urgent, right, answering customer emails, you know, making sure orders are processed, making sure you've got all your reporting, you know, done. Those are very, very urgent, but maybe right now aren't as critical for the survival, the business those are the things that business owner needs to delegate, find your key employees, find your key people and have them take those tasks off the plate. And then the final quadrant are the things that aren't important, urgent and those are what a business owner has to eliminate. Right binge watching the news following backs up, you know,

Ed Mysogland  9:54  
we all could do that.

Brian Trzcinski  9:57  
Sometimes, right? Those are the things that business attorneys eliminate. So We think that if a business owner can kind of start to plot their activities in those things, and really put a focus on again, leadership employees, their operations and their cash flow, they'll be able to weather the storm and come out smarter, stronger, and more prepared than they were before.

Ed Mysogland  10:13  
This is kind of into my next question is, you know, you guys, and I don't think I can adequately convey and maybe you'll give me a link to it. But some of the data that you share, I mean, I, somewhere around my office, I have have your little homage. It's 100 page book. You know, it's just a little index, card size thing that has so much data in it about just about what your the research you guys do, and you're so generous with that. And to those to that extent, I wanted to talk about your most recent article that you wrote, let's talk about managing cashflow. Both in urgent, I know you alluded to it just a second ago. But when we look at that business owners, you know, the business owners, I'm talking to, everything's urgent, I've got to do everything. Now, the problem I think they have is number one, prioritization. And number two, what's the decision that they can make, that's going to positively affect 10 steps down the road, you have a cascade effect. So can you talk a little bit about your article, and I will link to it in the show notes.

Brian Trzcinski  11:21  
Yeah. And we also have a worksheet that helps with that prioritization, as well as the cash flow exercise, and I'm happy to share that as well. But really, if you want to focus in on the cash flow aspect of those of those four areas of focus, the first thing you need to do is they got to determine what their cash flow needs are. Like I said, we create a worksheet that we call a cash in cash out worksheet. And what it does is four things, the first thing it does is it helps the business owner take a snapshot of what the next five months are going to look like. It totals up all the cash that they're going to receive, and that they're going to need to pay out during that five months. Is it consistent across the five months is there one month where they're there's a big payout and not much coming in, it helps give them a picture of what the five months look like, then they need to figure out who and what are most important, they gotta prioritize those relationships first, right from a supplier and a customer perspective, right? Because the worst thing a business owner can do is disenfranchise an important supplier or an important customer during this time, so that when they do recover, that relationship has been damaged, right? So they've really got to figure out who on that pecking order, who do I have to pay in 30 days? Who can I pay in 90 days, right? And really prioritize that. And then they gotta say, Well, who can help ease the burden. And one of the things that business owners need to remember is that landlords, banks, credit card companies, their suppliers to and reaching out to those folks and having real dialogue and communication with them and saying, Look, is there anything that we can do to help ease this cash flow crunch? And I wonder, like, for example, can you negotiate with your landlord to say, look, you're gonna waive, or you're gonna, you're gonna defer the next three months of my lease payments, in exchange for tacking on three months at the end of my lease, having those kind of strategic conversations with these people can help ease the burden. And then finally, figure out where your surpluses and your shortfalls are, and then see if there's any maneuvering you can do on a month to month basis. So that's really the first step of the process Ed. And then the second step of the process is really much more strategic, the business owner needs to find new ways to generate revenue. And one way that they can do that, obviously, as I mentioned, is to renegotiate payment terms with their suppliers and their customers who can be paid sooner who can be paid later, access business lending programs, right? I'm sure you probably had a podcast already on the Cares Act, and the lending programs and the SBA, and what's out there to help. Don't be afraid to leverage them. And then the last thing I think is important is to take a look at your operations. Are there ways that you can diversify your product or service to maybe find a new market, other new customers that you can attract with a different use of your product or service? Or do you have the ability to bring a whole new product to market like we're hearing all these wonderful stories about these distilleries who are now making hand sanitizer? them six months ago, they were going to be in the hand sanitizer business, they were laughed out of the room, right. But that's creative thinking. And that's how a business owner needs to take right now to help to help augment cash flow and revenue coming into the business. And then the other thing to edit I mentioned, is about their distribution method, right? Business owners, whether they want to or not have to relook have to rethink how they service their clients. You know, whether it's any company No, go on the E commerce route, whether it's cyber delivery, no, the days of being solely foot traffic, or solely brick and mortar. Really, I mean, if they were listening, we've been moving in this direction for some time and a lot of business owners were kind of given it the Heisman saying, I'm not going there. If this pandemic proved anything to anybody, it's that we can't stop that progress because it's coming now. And business owners really have to be strategic and creative about how they service their customers going forward.

Ed Mysogland  14:53  
And that's one of my question. It's kind of a little off topic, but the businesses that thrive I mean, Do you think that there's a premium that should be paid for them? Or is this a non recurring value premium? Because they were able to take advantage of a market conditions? I've been fighting that in the brokerage, we're seeing, we're seeing some companies that are just doing dynamite. And they're feeling as though you know, look, I'm a premium. And I'm like, Well, you know, I'm not really certain you are, because you didn't have the pandemic risk. But what other risks do you have? That's offsetting? You guys see anything like that?

Brian Trzcinski  15:31  
Yeah. So So it's interesting. So we actually surveyed, we hosted another national webinar with one of our other partners a couple of weeks back, and part of the registration process of that webinar was we asked, we asked folks a series of questions and, and you know, and you know, as you mentioned, you love our research. So why don't I Why don't I give you some of that research? To answer the answer some of that questions, I think, I think it'll help get to the heart of what you're asking the interesting thing about a lot of the business owners that that answered this question that when that, you know, that were part of this particular webinar, and just to sort of set the stage, most of these businesses were growth or mature businesses, with valuations greater than a half a million dollars. So these were established thriving businesses, pre COVID, right. And they told us, 51% of them said that they feel good, and they expect to be back to business as usual, eventually. So the confidence level, which is typical of a business owner, right, is still staying pretty high. And to your point, 18% said that we're very confident because the business is still going strong. So there is that some sub segment of business owners that aren't really feeling much of it, it's not a huge number. But but there is a you know, stay close to 20%. That is, and only 6% told us that they're not sure that they're going to add, they're going to make it I that was really promising and really, really positive to to hear in terms of some other things we learned through that exercise. We also asked them what resources for cash that they were leveraging, and they could check as many as they wanted. And number one business operating capital, the number one resource 58%, said that they're leveraging business operating capital, which was interesting. And what that really tells us is that business owners and we all say, Listen, I'm guilty of it, as I'm sure maybe you are sometimes they weren't always, we're always getting on business owners for not having emergency funds and safety nets insurance. We underestimated them a little bit, right, because 58% of us that they do have that in place. And to kind of answer your question, we're going through an exercise now where we're taking a look at all of our clients, all of our financial professionals, clients. And we're kind of doing our own little four box strategy. And we're saying, Look, on one axis, we have the business owners preparedness. And on the other axis, we have their industry in terms of its how risky it is coming down. To answer your question, we feel that the businesses that are in stable industries, and have done what they need to do to prepare to weather this storm should probably consider maybe selling, because they're going to be an attractive business, right their industry, but they're not commercial real estate industry, right. They're in a state of their industry, right? Where, where there's probably going to be some interest. And they have taken care of all those value drivers that we talked about, right and making sure you know, all their value drivers are in order. So that might be something they want to consider. And then you think about the businesses that did what they need to do to prepare, but maybe you're in a little little less stable industry. Those folks also may want to consider an exit, but they probably want to maybe look at it, they probably want to look at it in terms of what were what you alluded to earlier is that income replacement value, right? Because they may not be able to sell at that valuation that they thought they were right, because their industry multiple may change, right? Because their industry is now less stable. But there's an opportunity for them to think about building assets outside the business and start to plan for that eventual retirement. So we could talk a lot about this, because there's a lot of different nuances to it. But I think there is definitely something to be said for where you're headed with your question around this notion of business owners preparedness and the level of security in the industry that are in could present some interesting opportunities.

Ed Mysogland  19:08  
In talking with business owners, I think there's a number of challenges. I don't necessarily think that the people are going to take necessarily a value haircut. I mean, I know what the surveys I've been seeing, you know, 10 20% down, I'm not really certain that's the case, I think maybe structure may change where there's some performance based value, you know, how earnouts you know, forgivable notes, something, something that that's out the untold risk that the long term effects of this mess that we're in, and that's the tough part, and that's part of the thing that I'm doing is is writing to the guaranteed lenders, you know, the SBA folks that earnouts and extending the time that business owners can be in the business, you know, is integral to the transmission of this sub segment of of the entire market. Buyers are trying to mitigate their risk and they should but you Gotta help come alongside the business buyers, because this wealth transfer is not going to go away. So how do they do it? And hopefully, you know, the SBA and some of the other lending institutions will see it that this is this is about risk, you're never going to get to the next next generation, the next business owner, if you don't help that, that process. So

Brian Trzcinski  20:25  
yeah, you know, before we transition now, there's just one more point on that. And you know, I agree with you, but what we don't know what what's still sort of the the unknown at this point is, how is this going to affect industry multiples? Are the bell curves gonna change, right? Our manufacturing businesses still going to be able to trade it three to seven times, right? Our construction business is going to be able to trade at whatever historically they've traded at, right? That's the unknown. And you know, a lot of people in this space that I've talked to, you aren't too concerned, they still they feel confident that the industry multiples, you know, we'll be able to continue as they were, but we don't know. And I just think that's, if we've learned nothing else in this, right. So we got to plan for the what ifs, right, that's really kind of be the biggest takeaway here. So if I'm a business owner, we're always telling them don't make your retirement or your ex and your financial future solely dependent upon the sale and transfer of your business. If we've learned anything else, during this time, how that's how true of statement that is, business owners really start thinking about, you know, how they can have other assets outside the business to make sure that they're financially secure in the future.

Ed Mysogland  21:28  
Yeah, 100% on that, when I look at that, you know, you have your company's specific risk. And you so you're looking at industry and industry multiples, I just wonder if you're double dipping, when you penalize the multiple and you penalize the business based on its earnings? Is that a double dip? And I can make the argument both ways, there's not enough empirical evidence to support me one way or the other. You have any thoughts on on that? It's

Brian Trzcinski  21:52  
just too soon to tell? Right? That's the thing that is it's just too soon to tell. But I but it bears watching. And you know, that again, that's it just gets back to that whole concept of preparedness, right? Don't leave it to chance. And if you want to talk about income replacement value now, you know, it kind of is a nice segue, we can do that. But it's it's just all about that. So so the concept of income replacement value is really this. Well, let's

Ed Mysogland  22:16  
set it up. I mentioned this on the on the intro and how I became fascinated with the work you do it at Mass mutual is I sat down and you start talking about let's talk about income replacement value. And I'm sitting here I've been I've been appraiser for years, I had never heard someone use use this and back into this as value. So please take it from there. Yeah,

Brian Trzcinski  22:40  
sure. So let me let me caveat by saying that the income replacement value is not the value you will sell your business for. Right, let's carry on. But what it what it is, though, is it's what the business owner needs their business to be worth to maintain their lifestyle when they exit. And we know that most business owners are would fall into that classification of a lifestyle business owner right there, they're usually perfectly happy with the value of the business, as long as it's affording the lifestyle that they want that and that they've become accustomed to. But what happens is, is when a business owner exits, what's going to fund that lifestyle, and we know that they don't want to change their lifestyle when they exit. And we know that they're not always necessarily going to get the value that they that they had planned for. So they end up staying in the business longer than perhaps they should, or they continue to receive income from the business after they exit. And it just creates all sorts of, of red flags and potential pitfalls with exiting. But income replacement value basically does it says, Read figured out all of the benefits and perks that the business owner is drawing from the business. And it's not just their salary and their bonus, right. It's things like travel, you know, company paid car and meals, right? Are they running? Are they running real estate through it or transportation through it right, and we got to add all those things up. And we got to say, look, a business owner that may be drawing down a $250,000 salary might actually be drawing down an additional $200,000 of additional perks and benefits on an annual basis. So that all has to be considered. Once we all we add all that up, we say look, what is a reasonable withdrawal rate on that amount that the business owner is pulling from the business that we can apply to that factor to tell us what they need the business to be worth to maintain their current lifestyle. And we recommend that factor be usually between three and 5%. So what that does is you apply it you apply that withdrawal rate to the total value of all the benefits and perks are run through the business. And that gives you your income replacement value. What business owners often find is that the income replacement value is higher than what they think or know the business has to be worth. So. Right. So this is so getting back to what we talked about earlier in business owners then have to make that decision, that strategic decision. Do I want to add value to the business to make up the gap? Or do I want to say you know what, I don't either Are you isn't in the business to do it, or I just don't have the resources, the fire in the belly, whatever to do it, that okay, then we've got to figure out what other assets you have outside the business that are going to make up that gap. You know, whether it's qualified plans, whether it's other investments, personal savings, you know, IRA, you know, your IRA, your whatever it is, right, we've got to figure out the value of those. So, again, it all comes back down to that that strategic conversation around keeper grow. And and then the business owner can make the determination. And there's a lot of tools that are out there to help a business owner, you know, put value on the business, and not only put value on the business, but also tell them what the business could be worth, you know, if it was operating at its peak level, relative to its peers. So business owner can even understand that say, Look, I have an $8 million income replacement value on a $5 million business, is it even possible to get $3 million out of this business? The answer to that question may be no. And it's important information for the business owner to have. And that's why the succession retirement estate planning is so critical, and understanding your business value.

Ed Mysogland  26:03  
One of the things I've written about a lot has to do with the age of the business owner, stock market's high, businesses going great. We thought that we'd see more people at 70 retire, and now it's closer to 75. So so they don't have the runway to grow, yet they want the income replacement value. Is there anything that that can maximize the value in the short term that you've seen? You'll be educating me too, because typically, it's like, you know what, we needed to be talking a couple years earlier, and we could this this whole thing could be entirely different? Yeah,

Brian Trzcinski  26:39  
there's a lot wrapped up into that question. So I'm going to try to unwrap a couple of things as we as we go through it. Let's let's first start with the psychology of what you're asking. Right? The Psychology of what you're asking is this whole internal struggle that business owners have around exit the whole struggle between the businesses, my baby, and the businesses, my lifestyle? Right, so you see these 6570 75 year old business owners hanging on, and a lot of them will tell you the reason they're hanging on is because well, the business is my baby, I can't see anybody else running it, they're not gonna do it like I do. It defines who I am, I can't let it go, blah, blah, blah. And that's probably true. I'm not I'm not saying it's tough. But the other side of the coin, that may that has to be taken into consideration is the notion that it's also their lifestyle, and they don't want to see that change. So in terms of understanding short term, you know, and again, that's why that keeper leave that grow, that grower exit conversation has to happen early, is what you said, you need that runway to figure out what you want to do, because what a lot of business owners don't take consider is how their chosen exit strategy is going to impact your future income. You know, it may sound like a wonderful gesture to gift the business to your children, that the children may want it, the children may very well be equipped to do it. But that's going to be a non cash transfer. So what does that mean for the owner in terms of their future income. And that's why you see a lot of family owned businesses staying on the payroll, but because they haven't planned they haven't said this is my chosen exit strategy. This is what it's going to mean for me in the future financially. And these are the other steps I need to take to make sure that I'm financially independent. But you know, in terms of your question around what can business owners do on a short term basis to grow value that really involves an in depth analysis around the value drivers. And there's tools out there that can identify which value drivers are most impacting the value gap. And then a business owner can take a look at that. And I'm making this up as an example. But they could say, you know, my business has a $1 million value gap, meaning it could be worth a million more if it was operating, more efficient relative to its peers. What the tools are telling me is that my sales and marketing and my HR are what's driving the most, you know, the biggest discrepancy in that gap. So now as a business owner, I can say, Well, those are what I'm going to focus on in the next 12 to 18 months to grow my value. And again, add that's why there's such a difference between knowing value and understanding value. If I just have a number, I have no insight into what's driving that number. And to your point, I can't do anything to grow value unless I understand what's driving that number.

Ed Mysogland  29:08  
The funny thing is that you use that example of is it HR, or is it this, and you share that with the business owner and they're like, Well, you know, the next I'll sell it based on that to the next guy and they just failed understand that that next guy is not going to pay you for that. Just because you've identified where the problem is that they have a whole host of advisors that are telling them the same thing. To me, it's it's really astounding that there's such a disconnect, I should not have post closing I should not have to pay you for the risk and the benefit that I'm receiving. And a lot of the business owners just because they've identified what potentially could be fixed. You don't get credit for that. It just doesn't work that way.

Brian Trzcinski  29:50  
You know, there's there's different value drivers out there and each of them hold different levels of weight. Some examples of things that are going to always add value, right if you've got them in your business This is going to increase your value are things like having a dominant market share, having reoccurring revenue, having difficult barriers to entry of competitors, you know, and having good margins, right? Those are some examples that if you've got those, you're going to add value. But on the flip side, there's always things that are going to detract value. And not having a good senior management team could detract value, not having your customer base diversified, that is going to detract value, not having your financial and your operations or processes and procedures in order is going to detract. So business owners really need to understand to your point is that, yeah, there might be some things that you could say to the next buyer, like, you know, they may have their own sales and marketing team that they're going to bring in, and they're going to completely revamp the sales and marketing department great. If my sales and marketing is not doing well, it doesn't matter because they're gonna bring in their own fine. But if you go to a buyer and try to tell them that your customer base isn't diversified and just think they're gonna solve that problem. You know what I mean? It's just not gonna work.

Ed Mysogland  30:57  
I get it. Well, I know we're bumping up against time. So a couple more questions. So what does Brian in the folks at Mass, Mutual's crystal ball says, what, what does it say for 20, the rest of 2021 22, as far as you know, value and exits? Yeah,

Brian Trzcinski  31:15  
again, I really think a lot of it has to do with what I was mentioning earlier around the current position of the business, you know, if you've done what you need to do to be prepared for this, and you're in that 18%, that, that your business is still going strong, and you're in an industry that wasn't too impacted. But by you know, the government restrictions and other things that have been going on, it's probably going to be business as usual. And if you if you were planning an exit, you probably will be able to continue on the trajectory you're on. And your value will probably stay where it was at, and perhaps even be higher, if you weren't prepared for this, and from a financial perspective took a hit. But your industry is strong. I think the learning has to be that we can't let this happen. Again, we've got to be better prepared, we got to make sure that the what ifs in our business, are taken care of, if they were planning an exit, they probably should de risk the business first, maybe put their exit strategy on hold, do some de risking activities. And then and then revisit that that path that they are on before, you know if the business is going strong. They did prepare, but the industry is in flux, same kind of thing. I think it just as I mentioned earlier, I think it just really drives home the point that business owners need to not be so reliant on their business for their financial future, and they've got to start building assets outside. So what is the future hold? I think it really depends on the preparedness of the business, as well as the industry that they're in. And but the good news, Ed is that what we're seeing is that most business owners feel they're gonna come out of this, they're feeling positive, they're staying strong, they're going to be ready to be more prepared smarter and stronger than they were before.

Ed Mysogland  32:54  
And I don't know how you feel about it, you know, I keep on seeing all these studies about supply and demand that that's going to impair value. Because there's such an influx of businesses available and it becomes a buyers market. I'm not certain I subscribe to that I think good businesses sell in any environment. Do you have any thoughts on that?

Brian Trzcinski  33:12  
Yeah, you know, it's interesting, one of the things that we we've been talking about with folks not not so much from the, from the full exit, but more is now a good time to look at a recapitalisation perhaps, as a way to bring cash into the business, because that's been a question that we've gotten. And we've spoken to some folks and, and really what we've been prescribing Ed is, in this environment, it's probably more important to focus on the merger than necessarily the acquisition. And let me explain what I mean by that. There's a lot, there's still a lot of cash on the sidelines. Right, there's still a lot of cash on the sidelines that can be infused or influx into into the business. So finding, that's not the problem. What the challenge is, is finding somebody that fits your culture, finding someone that can truly make a difference in in augmenting your cash flow for the future, and giving you access to new markets and products and services or whatever it is. So what we're telling business owners who ask us about well, is a recapitalization makes sense? The answer is a could, as long as you're doing it with a partner, that's going to better position you for what happens when we're coming out of this. And not just take the cash today and partner with with somebody that isn't going to open up new opportunities for you. When this is all over with,

Ed Mysogland  34:29  
right? Yeah. So this is this isn't necessarily a liquidity event. This is more of a value growth

Brian Trzcinski  34:34  
strategy. Yes, absolutely. I

Ed Mysogland  34:35  
get you. Alright, last question. Yeah, I asked it of every of every person that's been on here. So if you had one piece of advice that you would give our listeners that would have the most immediate impact on their business, what would it be?

Brian Trzcinski  34:50  
Yeah, I think it really all goes back to preparing for the what ifs. We always tell business owners that our financial professionals always tell business owners then we share our data Enter statistics and, and they tell a nice story. But until you really live it, and you realize that yes, the what ifs can happen at any time. And they can happen in any form, who predict who predicted that this was going to be our what F right. You know, and really what it comes down to proper preparedness is you know, making sure your your structural capital is in order your processes, your documents, your agreements, your operational partnership agreements, buy, sell agreements, all the things that basically are the secret sauce in your business and make it transferable or an order, you know, making sure that you have that financial safety net in place. So if you do have to tap into operating capital, you can, making sure that you have the right employee benefits in place, right, making sure that the employees are going to stay loyal to you things as crazy as a global pandemic, right. And if you do have to furlough or you do have to temporary layoff employees that they want, they're going to want to come back when this is over with, because the last thing you want to do is lose that he research and development manufacturing expert to your competitor because you had to furlough making sure that's in place. And then again, you know, understanding your your baseline business value, right, because when you are going to rebuild and reopen, you've got to reestablish your new normal. And if you knew what your normal was before, it's going to be a lot easier for you to reassess and recalibrate. So just financial preparedness, preparing for the what ifs, putting all your documentation, having any products in place that help you de risk the business is critical. And of course, working with your team of advisers, whoever, whoever is part of that team, and just making sure you're lockstep with them, and, and they're helping you build a stronger, smarter, more prepared business. And then you'll be able to weather almost any storm that comes our way in the future, what's the best way we can connect with you. So we have a team of some 8000 financial advisors all across the country, not all of them work with the small business market, but a good chunk of them do. And if your listeners would like to meet with somebody in their community that is affiliated with MassMutual you know, I am happy to make any virtual introductions that I can and connect as many of your folks so that they can begin a productive relationships going forward. So, so yeah, so that's the best thing is, you know, connect with someone locally, and I'm happy to help make those introductions.

Ed Mysogland  37:15  
Well, I'll put everything that we talked about in the in the show notes and and I can't stress it enough, I am such a beneficiary of the work you guys have done and I can't overestimate just how good your stuff is. And I'm so grateful for for the opportunity to visited with you today. And truly you guys are defenders of business value. So thanks for coming on.

Brian Trzcinski  37:39  
Well, and I appreciate those kind words either. I'm so glad to hear that our that our tools and resources are are making a difference out there. And thank you for having me. This has been a lot of fun. Hopefully I gave some folks some good insights and and look forward to connecting with you and your folks and again in the future. Right.

Ed Mysogland  37:56  
Thanks again and stay well.

Brian Trzcinski  37:57  
Bye. All right, you too. Take care.