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For thirteen years, Roy has run the family business after his father-in-law turned it into an ESOP and transitioned out of an ownership role. Not only has the business grown from $6M to $19M since then, but both parties were able to achieve their desired financial and lifestyle goals because of the successfully orchestrated and executed ESOP. He’ll share how they did it on today’s episode!
What You Will Learn In Today's Podcast Interview
Podcast Summary:
Roy shares his insights into how effective ESOPs are after transition and why they're key to helping more business owners consider one over an internal transfer or a third party, just like his father-in-law did.
We all wonder what comes next for the generation after an ESOP. Roy is a prime example of a president getting it right through solid planning, communication and follow-through. In the past thirteen years, business has increased from $6M in revenue with 50 employees to $19M with 100 employees.
And it worked for the management team and owners, too. Roy's father-in-law was able to work the amount he wanted after the sale of the company, without worrying about how the next generation would carry on his work. He already knew! He'd planned his succession and to have a team that would take as much care of his business as he would. To make this happen, they moved from a traditional annual income model to a long-term value creation one to ensure the business was tied to success after transition.
ESOPs aren’t for everyone, but if you take the time to cultivate an ESOP mentality before you take the plunge, you’ll find all sorts of ways to keep your business growing through the years, with higher employee engagement, retention and performance than typical business structures encourage.
It’s five minutes to closing — do you know where your employees are?
About the Guest:
Roy Waterhouse has been in the family printing business for decades, working his way up to the presidential position at Hopkins Printing. Hopkins became an ESOP in 2007 and is 100% Employee Owned. Before that, he worked with Prepress, where he did film assembly, camera work, typesetting, layout and CAD work.
Hopkins Printing is your commercial printer of choice for offset, wide-format and digital printing. For four decades, they have exceeded client expectations and turned creative ideas into realities. Customers have praised our offset printing, wide-format printing, digital printing, fulfillment and storefronts. They know that their clients’ success ultimately dictates their success, and that’s why their number one goal is to generate results for your business.
Quotes:
14:50 - “I don’t think you can flip the switch one day and have an ESOP mentality. ” - Roy Waterhouse
22:23 - “Had they wanted to have a quick exit, we couldn’t have done an ESOP. It doesn’t fit the model. What it fit really well was that Jim could stay involved and over time he had control over his life.” - Roy Waterhouse
30:12 - “Our ESOP education committee meets monthly and goes through questions from people and, ‘How do we explain it?’ and publishes notes so people can read things. There’s a lot of complexity to it. It can seem overwhelming.” - Roy Waterhouse
41:20 - “The trustee is a fiduciary responsibility to make sure the shareholders, the employees” are not taken advantage of.” - Roy Waterhouse
56:21 - “If somebody wants to go down the ESOP path, they need to get some really good advisors. Because the typical staff (your accountants, your attorneys) don’t have the background of an ESOP“ - Roy Waterhouse
Links and Resources:
Episode #162 - What is an ESOP: A Deep Dive Into How Employee Stock Ownership Plans Work with Dave Diehl
Episode #201 - The Current & Future State of Business Valuations with Dave Diehl
Episode #206 - How SRC Grew 2x in Value After the Last 5 Recessions & Saved $100M Preparing for the Next One with Jack Stack
Episode #156 - The Great Game of Business: The Only Sensible Way To Run Your Company with Jack Stack
Website: Hopkins Printing
LinkedIn: Roy Waterhouse
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