Episode Transcript

Please note this transcript was generated by AI and contains errors including missing and misspelled words.

[00:00:10] Meryl Intro: Welcome to the Lifestyle Accountant Show. I'm Meryl Johnston, your host, and this podcast exists to help today's accounting firm owners build successful firms while also living a healthy, happy life without sacrificing sleep, your weekends, or time with loved ones. In today's episode, I'm chatting employee equity with Andrew Vanderbilt and specifically providing opportunities for your leadership team to own equity.

[00:00:35] Andrew [soundbyte]:

Now, that process was anything that I do and I'd say this is the way that, Hey, boys, um, you're doing real good. Do you want to have a chat about equity? I reckon it'd be cool. I think it'd be great. I think we could do some cool stuff together. Let's have a conversation. And it just went from there and then we went and much like what are you trying to get out of that?

Um, they bought in so they paid me money to buy into the business And I was of the perspective as like, I'm not trying to make my millions right now. This is me trying to ensure the right people are in the right place for the future of this business and I know that that will pay me back tenfold eventually one day.

[00:01:14] Meryl: If you listened to last week's episode, then you would have heard my introduction of Andrew. If not, Andrew is the founder of Illuminate and I'm going to read his self intro, which I think is pretty awesome. Although I dream of running my own whiskey bar, right now I'm an accountant, I guess. Founder of Illuminate.

Podcast host, co working space owner, coordinator of retreats, mentor of up and coming accountants, keynote speaker, and generally getting myself into interesting situations in the world of accounting. I push the boundaries. It's the only way I can make the difference I want to make. I ask lots of questions, I listen to the answers, and I'm not afraid to challenge what I hear.

Last week's episode of the Lifestyle Accountant Show featured Andrew sharing his story about starting an accounting firm at 26 with his business partner Jason and then buying Jason out a few years later. I was impressed with how quickly Andrew and Jason were able to agree on the key terms of the deal and figure out an amicable transition.

In today's episode, we're switching gears and talking about why Andrew decided to give his leadership team the opportunity to own some of Illuminate. There were three different situations where Andrew had team members buy in and Andrew talked through each of them. We discussed some of the things that it's important to talk about if you have employees or, oh, anyone.

coming on to the cap table and, and things, key terms that you should put in the shareholder agreement. We also talk about what to build into the agreement if a team member who owns equity should leave. And Andrew goes into quite a bit of detail about how he's handled this. Lastly, we talk about how it requires a different mindset to have shareholders rather than being a sole shareholder.

You can no longer just decide to not pay a dividend and reinvest all of the profit or vice versa. All that and more coming right up on the Lifestyle Accountant Show.

Meryl: All right, well, let's switch gears. So next, I want to ask you all about incentivizing your team and giving equity to some team members. So let's start with a look at what Illuminate looks like today in terms of team and the type of services that you offer.

[00:04:19] Andrew: Okay, so we are, uh, a team of 21. We have two offshore team members, one in our admin team, one in our bookkeeping team.

We have a leadership team of a head of accounting, um, and then effectively a two IC in accounting that's also part of our leadership team. Um, a head of our bookkeeping team and then effectively head of operations, um, or head of tech kind of stuff and myself. And then we also have another senior person in the bookkeeping team that spends a bit of time in that leadership element as well as we're trying to give them more, um, exposure to stuff as well as the head of bookkeeping, Kate, um, when I'm returning to leave and hopefully we'll be going on maternity leave in the not too distant future as well.

So we had a leadership team of five. Our services broken. It's like, it's like, literally, we're like the standard suburban accounting firm, but with just like more interesting people. I don't know. We, we keep people out of jail by putting numbers in boxes. So, we do compliance stuff and that's not belittling what compliance is, but that's just trying to say that, you know, we, there's more to it than what we do.

So, we do the compliance based work. Uh, we do bookkeeping based services or cloud based bookkeeping and those kind of things. We do technology based advice and implementation. So that could be something as simple as setting up Xero. It could be more detailed as, you know, point of sales, inventory solutions, that kind of stuff.

And then probably the thing that a lot of people kind of spend a lot of time with us is the business advisory support services. And that is really everything from business ideation, how do I go about this, what should I do, to then tracking along progress, how am I performing, what decisions am I making, and how do I go about that.

So that's a, that's a sort of services core four. And then in who do we do it for, there's about six industries, but as I go through the list becomes less and less of a focus, but marketing and creative, so creative people, we spend a lot of time with, um, whether they're website developers, digital marketers.

Photographers, the creative people who really love their art, but get freaked out by numbers. We spend a lot of time with them. E commerce, we spend a lot of time with. I know you guys do a lot of work in e commerce, although that's becoming a little bit less now. Our team are just getting a bit shitty at e commerce businesses these days.

So if you run an e commerce business online, I kind of do it at the same time, but it's, it's an interesting space, e com. We do hospitality, businesses, alcohol, uh, trades. Actually, trades is quite high up with us. We have a lot of time with tradies, um, and then professional services. Everyone's got a, you know, a consultant or two lying around.

But really the ones we spend most of our time with, um, creatives, trades, e commerce would be the top three. And then hospitality, alcohol float around there. And then scale wise, anywhere from like brand new starting up today to we probably start having a talk to them about whether we're the right fit when they're around the 10 million turnover.

Um, and depending on what kind of international based stuff they're doing. So if they're going crazy overseas and we really need to have a strong knowledge of what that means, that's where we, our team start going, I'm just not enjoying that. I don't have the desire to learn it. And we go, great, let's move you on to someone else.

So we will often move clients to mid tiers or those kind of things when we recognize this is not going to work with us anymore.

[00:07:14] Meryl: So let's dive into the story around the first time you decided to give a team member equity. And I don't know whether you decided with the leadership team that it all happened at once or did you start with one person with that equity process and then gradually rolled that out to other people?

[00:07:30] Andrew: Yeah, my, my view on equity for team members has always been, this isn't about a reward for hard work. This isn't about, oh shit, golden handcuffs, I better have them there. For me, this is about these, this individual is significantly impacting the wellbeing of this place and will continue to ensure that it does good going forward.

So, you could be the best AM accountant ever, but if you don't bring anything to the table in terms of the future, um, that's going to be a challenging conversation for me. So, the first time we decided to bring someone in, so my business partner had been brought out, it's just me, uh, a few years down the track, I recognized there were two, two team members at once that I thought were doing a really good job, um, in, our current and had a great opportunity for the future of Illuminate.

And that was Mick who was leading our accounting team and Shane who's kind of leading our technology based approach at that time. So they now are in equity. So that all went, all went happy days. And Mick now effectively is the head of accounting for the business as well as has a few other elements that he looks after.

He's taking over finance elements and those things. And Shane effectively is like a head of operations now at Illuminate. Still has, he still is an accountant, still does tech, but it's more operationally. And that process was anything that I do, and I'd say this is the way that, Hey, boys, um, you're doing real good.

Do you want to have a chat about equity? I reckon it'd be cool. I think it'd be great. I think we could do some cool stuff together. Let's have a conversation. And it just went from there. And then we went and much like what are you trying to get out of that? Um, they bought in. So they, they paid me money to buy into the business.

And I was of the perspective as like, I'm not trying to make my millions right now. This is me trying to ensure the right people are in the right place for the future of this business. And I know that that will pay me back tenfold eventually one day. And so, it took us about a year to go through that process.

You know, we did the whole shareholder agreement, that kind of stuff. And because we're all busy people, it kind of, you know, eventually gets there. I get frustrated. I'm like, can we move this thing faster? I just want it done. I don't want to be thinking about it. obviously pacing it because it's a big decision for them to decide to put money on the table and connect themselves potentially long term to a business.

Um, and then eventually after 12 months, we had it all done and dusted. And then three months later, COVID hit. And I remember, I remember chatting with him one day when we were going through like, oh, let's just do some forecasting assumptions of how this. thing might impact us. You know, what if all our clients go broke?

What if this or that? Or, you know, an industry that we look after disappears kind of thing. And we're running off like percentages of drop down, which funnily enough it was, we were fine and we grew. Um, but I remember saying to her, well, boys sucks to be you, doesn't it? And thankfully, uh, As a business, we rallied around our clients.

We did a lot of great job and we, we doubled in 12 months, um, as opposed to anywhere else. But it was that point where you're like, Oh, geez, this, this is interesting.

[00:10:33] Meryl: Yeah. Things got real for them. Wow. And so was that announced to the team? What did you say to the team? How did you explain it that these, these two, I mean, they probably knew that these guys were performing well, but yeah.

[00:10:45] Andrew: How did you frame it? Yeah. I mean. I'm trying to think back to that point in time, this, the, obviously the pandemic just wipes everything that happened before then, right? So it was a, it was very much a everyone in the business knew that those two people were contributing to the well being and the greatness of the place of Illuminate.

So. It was almost like a, hey, as you guys are aware, these guys are awesome. Um, and they're doing great stuff. And as a result, we've had a conversation and they're going to come on board from an equity perspective. We're super stoked. We're super excited. Um, and it's just going to continue that. Now, nothing else changes.

And this is really important for us because when we were approaching equity, this wasn't a partnership thing. This, isn't it? You are now a partner. These are your clients. You look after that. No, no. It, the way we we talk about it is you are investing in something that you believe will increase in value.

So it's a financial decision to some extent. And then you recognize the role that you play ensures that financial decision is a smart one, so much like a normal business as opposed to a professional services business where they run this weird. partnership things and it's worked in some elements and not worked in others, but it really was these guys are on board.

We're really excited for it. And then between the three of us, we just spent a lot of time talking about how we wanted to ensure this would work well, what, what role would each other play? How would we do this? You know, how would we make decisions and how do we pay ourself and all those kinds of things that kind of come with it because when you don't have a business partner.

You do whatever the hell you want. When you do have a business partner, you need to ensure that there's some kind of market justification for the decision you're making that you're personally benefiting from, uh, which was fun. Yeah.

[00:12:20] Meryl: There's a couple of things I'm interested there, things that I've had to work through as well.

So, the first is figuring out... their salaries. So whether there's any difference if you're a shareholder to their salary and then getting agreement on dividends because you can pull a lot of money out of the business or you can reinvest it in growth and getting that balance right and different shareholders have different personal situations and different stages of life. Yeah. How you come to agreement on those things?

[00:12:49] Andrew: Yeah, the different individual situations financially is a massive challenge as well as the different perspectives on taking risk as well is a big challenge too, you know. Someone might say, hey, I want to be accessing that cash. I want to make sure I'm paying off my mortgage.

That's my number one priority. Where someone else might be saying, well, I want to reinvest it back into the business because we're going to grow and do this. And then someone else might say, well, I want to do something over here with the cash that we can collaboratively do that might be valuable as well.

So, you really have It's a challenging environment when you've got different people with different perspectives and I probably, I probably didn't appreciate how challenging that was going to be because my nature is what I think is right, right? Because that's my, that's my truth. That's my world. That's my knowledge.

This is what the right decision is. And when all of a sudden you have to start taking into account someone else's perspective, who you know and trust, but you don't know intimately. You're not, you're not spending every waking hour with them. And so you start to see those elements of those individuals and how they think and approach things.

And then you have to learn how you communicate and adjust to it. So, to your point around how do we pay our people whether they're a shareholder or not, irrespective of shareholding, we, we try to separate that out. You have a job and then you happen to be in equity. Those things need to be separated. Now, it's easy enough to do that from a salary perspective.

This is your job and this is what market is for that job that you deliver. It's really hard to do that from a conversation, decision making, having a chat about the business perspective because you just start talking about things that are irrelevant in a meeting. When you're, you might be there to sit about, okay, cool, how are we going to structure our, um, service package as we're looking to change a few things here and there.

And all of a sudden, you start, you're talking about the cash flow, the business, all the, all the, the, the HR elements, all this and that, and you're kind of everywhere, but you're just off topic from the one thing you're there to talk about. So that separating, where do we have shareholder meetings? And where do we have leadership meetings?

That was the hardest part. Paying them, meh, what is market, cool, do you feel that's appropriate, okay, good. Also recognizing if times are tight, um, you know, we might have to pull back on certain things for certain reasons, but we, we ideally don't want to be pulling back on what your wage should be.

[00:14:54] Meryl: And as shareholders, is there an obligation to continue working in the business?

[00:14:58] Andrew: Oh yeah. Yep. So we, a part of our shareholder agreement effectively says that if you're no longer employed by Illuminate, uh, you must dispose of your shares within a period of time. Now we've built in something that says that period of time becomes longer, the longer that you've served for the business.

So it's effectively, it's six months, got to get rid of it six months. And I think it's for every X number of years, you get an extra month. So it could be like every year you've worked here, you get an extra month or two months or something like that, which means for me as the founder, I wouldn't be forced to sell my shares in six months if I'm no longer employed.

I actually get two to three years to wait before I do that. Now I can choose to sell it day one, but I don't have to. And as you'd know, any shareholder agreement. Is there, it doesn't have to be enforced, but it can be. So you have, we have that in place to go, well, what, how do we enforce it? What we also put in place was we wanted to ensure that we had an understanding of what a good exit and a bad exit from the business looked like.

So if you're going to do something that's like totally inappropriate and you are walked out the door, you shouldn't be able to get market value for what this business is worth because you've potentially significantly impacted the business, but we won't get that for a year or two. So we have some things that kind of say it's a below market and depending on how severe it is, what percentage that looks like, which makes that that kind of conversation way easier, but also recognizing things like what I found hilarious going through this process with um, our legal team was a good exit is death.

[00:17:52] Meryl: Oh boy! Right?

[00:17:53] Andrew: That's considered a good exit because you didn't do anything wrong, you're just dead. And I was like, oh man, that's kind of morbid. Um, but a bad exit could theoretically be you set up a competing, um, service down the road and are now competing directly with us. What the hell are you doing, you moron?

So, those kind of things are really important. Going through that process of understanding, making sure that all three of us were on board around what a good exit, what a bad exit, where are we going? What decisions do I need all of you to be involved in? And what decisions can I just go and make myself?

And that, that still is a challenge to today because there's a difference between having the ability to make a decision And making sure people feel consulted and involved in the decision that's made. Because my logic goes, well, I've always just made it, I'll make it and you'll find out about it. It's the right decision because I think it's right.

Whereas, person who owns 10 or 20% of the business goes, Hey, I know that you make the decision, but I feel really valued when you ask me for my opinion. Can you ask for my opinion a bit more? And the more that I don't do that, the more frustrated they become. Yes.

[00:18:56] Meryl: Interesting. So, I believe you now have an extra or a couple of extra shareholders since the first two.

So, I'd love to hear about that process and whether, was it different? Was it similar?

[00:19:08] Andrew: Yeah. So, like to, to expand on our approach to equity, my recognition is right, like right now and it has been ever since probably I bought Jason out and became as the sole shareholder of the business is this is not my business.

I'm just the caretaker of it. So I'm looking after it for the time being and eventually I won't be here. So what that means is there's opportunities for people that are joining our business to move into an ownership level, but also to move in into a decision making and impact side of things. Because I can't, I know I can't take it where it needs to be.

And part of my transition in my role right now is recognition of that. So when people join Illuminate, when we go through that final interview welcome stage, we let them know. That if that's something they're interested in, irrespective of whether they're, you know, uh, an administrator, a bookkeeper, an accountant, an advisor, or whatever, that is an opportunity for them in the future.

Now, once again, you still need to make sure you're delivering impact and you value, you're going to impact the future of our business, not that you've been here for a couple of years. So, we bake it and we say, at the two year mark, we'll have a conversation with you about it, um, and we'll see where your head's at, we'll see where our head's at, and if there's a mutual agreement that this might be a good thing, then we'll have that conversation.

Thank you. So, the two further people that are in equity now at Illuminate is Amanda, who effectively is like the two I see in the accounting team. So, she helps Mick to kind of run and looks after key elements of that. And then Kate, who leads our bookkeeping team. But they both came in really differently.

So, Kate was an accountant. Um, Kate is amazing in that in our, uh, in her job. application where we ask for someone to submit a video and we ask them what's, you know, effectively the short version is, what do you want to do with your life? Her answer was, I want to start a family. And I was like, I'm hiring her.

Because if, if, if a woman going back five years can say to a male employer, My goal is to have a kid. I know that I can trust them implicitly with everything and Kate's been fantastic. And thankfully, she has now has a family too, which is amazing. Kate was an accountant, but our bookkeeping team or big bookkeeping side was kind of cratering a little bit because it was being led by accountants, not by bookkeepers.

But Kate has a very extensive bookkeeping background. So, we made the decision that in order to justify our bookkeeping services, we needed to separate that side of the business out. We needed to let it stand its own two feet and we needed to let us on, we needed to truly appreciate that bookkeeping is different, um, operationally than accounting.

It's not this, whilst it is in the same family, it's not the same thing, right? We had a lot of conversations with Kate and effectively said, all right, we're going to split it out. We're going to set it up. And I just said, I'm going to give you 10%. of this business from day one. There's no options. There's no prove it.

You've already proven yourself. I'm comfortable with that. Um, but we're going to give you 10% because we know that you're going to have to put a lot in to ensure that this works. Um, and now we're three and a bit years in. Um, and that business now has a team of five is, you know, doing good numbers, has its challenges as anything in the bookkeeping world does where people and margins and all these kinds of things come into play.

But that was the way that we approached that with Kate. Um, with Amanda, it was different. Amanda is effectively our two RC in the accounting team. And the conversation there was, Hey, you're doing some amazing stuff. And we think you're incredible. And we think that partly you've earned it, but also partly you're going to impact the future of this business.

Would you like to have that conversation? And we, we practically did that through the, the latter stages of, um, lockdowns down here in Melbourne. Which, if anyone internationally is listening to this, was for about seven years. Um, or at least that's what it felt like, um, lockdown wise. I think we went into seven different lockdowns.

And we had that conversation and then that was a financial transaction. So she paid to buy in. Um, and so, as, as you might, you might, if you're listening, you might figure it out. We've got a bookkeeping business, we've got an accounting business. So, we've got some different ownership levels at either side.

So, Kate's not in the accounting and Amanda's not in the bookkeeping. Although, we're currently in the process of looking at re merging those together. Because, to be honest, running two businesses side by side with shared resources is a pain in the butt. An absolute pain in the butt. Like, it's the worst.

It's the most worst thing to do. Amazing.

[00:23:18] Meryl: Thank you for being so transparent about this. It's really interesting hearing the process with the four different team members.

[00:23:25] Andrew: Because they were, they were so different. And, and it probably was each of them were coming on. for different reasons and different purposes and the value and the benefit of what that transaction was going to happen if we boil it down.

Transaction was different in each and every one of them. So, Mick and Shane was about releasing me to pursue what I, what I needed to do to grow the business. And, uh, Um, Kate was about, hey, we have an element of business that needs some hyper focus and we want to ensure the person that's delivering that is rewarded for it.

And Amanda was a recognition of we're continuing to grow and we need someone just like you to keep taking on stuff. So let's get you that opportunity and position so you can continue caring for your clients, the team and the broader Illuminate business.

[00:24:06] Meryl: So we, we talked at the start of the episode about you coming back in a different capacity at Illuminate.

And how did you frame the extended paternity leave and then your new role with your leadership team and how did that go?

[00:24:19] Andrew: Oh, I won't go into the big long story. Um, I remember announcing that we, uh, we're expecting our third child at the end of a team day. Um, so we have quarterly team days, uh, a month before, a month, maybe two months before that team day.

We had a leadership day, a two day leadership retreat. I found out the day before that leadership treat that we were going to expect our third child. Um, and that leadership treat was all about what's your personal five year goal and how do we blend that into Illuminate. So, I was a mess for that day. I had no idea what was up or what was down.

So, I feel like when I announced that we were expecting At our team day, our leadership team went, Oh, that's why you were stuffed up on that. That's why you were, that's why we might have experienced that. And so initially, I didn't say anything about taking time off. It was just like, we're going to have this kid.

We're so stoked. We weren't planning on having a third kid. But hey, this is amazing. Let's bloody do it. But very quickly, my mindset went, I don't think that I can give this business what it deserves whilst also giving my family what they deserve. It's not possible and there will be a bunch of business owners out there that say that it can be done and I wish them the best.

But the only people that I see do that don't have a family. Um, it's, it's nuts. It's crazy. Particularly when you have a third child and you have two kids going through school and a newborn who needs to be fed and held all the time. And I just felt that that was unfair on my wife, Ivana, for her to have to do that.

But I also looked at the opportunity and said, Well, hey, I get to experience what it's like to have a newborn. And I've only ever done that whilst working. I can be there all the time. This will be awesome. So I made the decision that I'm going to take four months off. It'll be sweet. And then about a week or two later, I went, And I think when I come back, I'm not going to come back in the full time role either.

Because I just don't think I can do that long term. So it was like this, it was like layering upon layering. The first thing was like, yeah, we're going to have a kid. The second thing was, I think I'll take some time off for this. The third thing was, you know what? And I think when I come back, it's going to be different.

And then the fourth thing was, oh, and my dad wants to retire. So I'm going to take over his business, which is a plumbing retail store. We won't talk about that. So remember it's telling the team. And the way I kind of communicated this was, and I had, I had a bit of support, um, Shea Thia, who's a good buddy of mine, um, down in Radelaide.

She kind of helped me with some of the comms on this. But it was recognition of what, where am I the most valuable in this business? And recognition that as a leadership team, we have had some challenges and there has been some conflict with me as the leader of the business. And opening up around maybe some of the reasons why, um.

But realistically, it was, I know that I'm the most valuable where I'm focusing on opportunities, on growth, and on improving what we do as a business. And I know that over the last few years, I haven't been in the position to do that because of the growth, because of the pandemic, and because of the challenges that we faced as a business.

And so reflecting on that, When I return, I am going to ensure that that is all I spend my time on. Otherwise, you're not getting the best of me. You're getting like 50% of what Andrew could do. And even when I do the things that I'm really good at, I don't have the energy or the focus or the commitment to actually deliver it to 110%.

And it was really nice because I think when I talked about where I was valuable, there was all these nods in the room with the leadership team. And as a business owner, I think often you don't feel valued. You, you feel like people don't appreciate what it is that you do because you're often the one who's working longer hours who's picking up the slack.

I mean that's part of the gig as the business owner. To have that kind of like agreement of yes you are great at that and that is where you're the most valuable and we would like you to be doing that was just a reaffirmation of. And so I just kind of share what that looked like. I think people then progressively over the month or two after that lost their minds, stressed out massively.

What is it going to look like? What am I going to have to do? How are you going to do this? And I tried to be as open and as communicative and as transparent as I possibly could be. Even down to like, these are the clients I meet with. This is who I think is going to take them. Okay, you don't think that's right?

Great. All right, we'll shift it to that person. That might work. This is a responsibility I have. I think this works for you. What do you feel about that? But even before that, it was like, what. Like I went to them, before I tell you anything about what I think you should be doing, you tell me what you want to do.

Assume that all I'm doing is growth stuff. What do you want to do that I currently do? And it was interesting to see some people were like, Oh, whatever you tell me, I don't care. Other people were like, Oh, I really would like to do this and that. And so I think really involving, this was the leadership team, not the broader team.

Really involving that leadership team was... Absolutely critical in ensuring that, um, when I took that time off, they're in a more comfortable position. Now, they weren't comfortable. They were just more comfortable than they would have been or less awkward than they would have been before that. And then the communication to the broad team was just a month or two later.

Once as a leadership team, we were comfortable about what that was going to look like to then go, Hey, this is what I'm doing. I'd like to think that it was really well received and that I was, the team was well, was supporting me really well in that decision. I mean, if they didn't, they'd be a bag of dicks because I mean, dude, I'm taking time off to care for my family and you're saying that's a shit thing.

Come on now. Come on now. But yeah, it was. It was really about putting it all on the table. It was really about saying, where am I the most valuable and how do I ensure that I deliver that value? And even to the latter stages before I took time off, just like. I have told the team and I'm open, I'm recognizing that because I don't have majority, I have majority ownership and majority control of this business and I'm not coming back in a fully majority based focus.

I'm only going to be here in a, you know, in a limited capacity, which could be a day, one week, three days, the next, depending on what's going on. I don't feel it's appropriate for me to maintain control. Now, that control might not change immediately, but I'm very open to that happening. And when you're ready, you can talk to me or I'll talk to you about it.

So, we did that conversation and then taking it a step further of, I'm looking to not have the ownership and I'm more than happy to be in a role where I can be fired if I'm not performing. Like, this is where I'm going to. So, like, hey, like, I'm, I'm down for that. Now. The leadership team adjusting to those elements and being comfortable with what does that actually mean and how do they step into that.

It'll take time. I, I wish it, I wish it would take a month and we were good and now we're here, we're good. I don't have to worry about it because I've got it solved in my head. But you have to allow those people who are about to be opened to a whole new world of what does that mean to process it in their own individual way.

[00:31:14] Meryl: So, just before we wrap up, is there anything that you wanted to say just to final thoughts on either incentivizing your team with equity or on that transition that you've made out of that CEO role and into coming back in, in that limited capacity? Oh, no,

[00:31:30] Andrew: just the thing, like I was saying before, in terms of the role you play, once you have a leadership team in place.

you then need to make sure you're working to your strengths. And I guarantee your strengths is not doing everything or being on top of everything. So, really look at that. Where is your strengths? Where does it lie? And then how do you equip, empower, and reward the people that are going to do the other things?

Really valuable. Taking time to have those conversations with the team. And My natural was just here's the solution, try not to give them the solution, allow your team to come back with how they think it might look like, because if they think it might look like the way you think it might look like, then bloody hell, they're going to be way more bought into it and you don't have to potentially massage arm wrestle or both of you have got to kind of come to grips on a different solution that you didn't want.

So that's, that's really big. And, and the other part on equity, don't ever use this as a golden handcuffs. Don't ever use this as a way to restrict because whilst that might work for a year or two, whilst that person's happy, as soon as there is conflict, they will know they have equity because it holds them to the business.

So make sure that it's done because it's an opportunity. And you believe that collaboratively you'll do a great job together. And then you, and, but also that you've articulated what it is you're trying to achieve. So when you face conflict, they don't feel like you've just trapped them into something.

They feel like they have a voice and you're in agreeance on what you're trying to achieve or at least what you thought you were trying to achieve and you can workshop it if needs be.

[00:32:54] Meryl: Absolutely amazing. Thanks so much for coming on Andrew. And I'd love to have you back in after you've been back in your new limited capacity role for 3 or 4 months to hear how it's all going.

[00:33:03] Andrew: Absolutely. I mean, I'd throw a plug out to my potty and say, if you want to hear more about my decisions, so I do like, obviously, like you've got such a cracking potty here. I run one with a buddy of mine, Ali, called Ali and Andrew's All Aussie Accounting Adventures. And we did, we did an episode called Farewell Andrew, where I actually talk a lot more in My decision to take this transition.

I think I cry for about half of it. So if you, if you're a tear jerk, have a listen, listen to that one. Yeah, it's, um, every, like, I got so many messages saying you, you should put a warning out, mate, that just ruined me. Um, but I talk a lot openly about those decisions and why, and, and, and what does that mean for us.

So have a listen there. Um, hit me up. If you wanna have a chat more about it, I'm more than happy to share. more of my experiences and winnings and failures and all that stuff and um, yeah, thanks for having me on mate. It's been fun. Yeah, I'll drop

[00:33:50] Meryl: a link to the episode that you just mentioned in the show notes and if the listeners want to get in touch with you, where's the best way to reach out? LinkedIn? Twitter?

[00:33:58] Andrew: Something like that? Best ways? Yeah. LinkedIn's the best way. I'm, I'm on a bit of a hiatus from most social media, but LinkedIn is one I'll still give a bit of a attention to. So yeah, hit me up there. Otherwise, I have a website, andrewvanderbeek. com, um, so you can check that one out too.

[00:34:15] Meryl: Amazing. Thanks a lot.

[00:34:22] Meryl Outro: That was another great chat with Andrew. I don't know which episode I enjoyed more, last week's hearing about the early days of Illuminate and how Andrew successfully navigated buying out his business partner or today's episode where Andrew gave us a behind the scenes look at giving his leadership team the opportunity to earn some equity in Illuminate.

Couple of key takeaways for me. The different mindset required between being the sole shareholder and having other shareholders involved and it was interesting hearing the work that Andrew puts in to keep everyone in the leadership team informed and to get their agreement on key decisions. I was also interested in the way that Andrew's role at Illuminate has evolved and how he's figured out where he can add the most value.

I'll be interested to watch along as Andrew returns to Illuminate in a part time capacity once his paternity leave finishes. The final takeaway for me was around how Andrew had thought through what to do if a team member who did have equity left the business. One of the main reasons to give equity was to try and retain talent within the business for the long term and then make sure that they were rewarded.

for that. And he put a lot of thought into that and it was interesting hearing how that was structured and whether they left on good terms or, or not. So if you'd like to connect with Andrew and find out more about Illuminate or his podcast, we have the links in the show notes. And if you'd like to get in touch with us, head on over to lifestyleaccountant.co. A small ask from me, if you've been enjoying the podcast, I'd really appreciate it if you would leave a rating or review on iTunes. My producer tells me that it can help increase the reach of the podcast, uh, so thank you. Next week we hear about the ending of a business partnership from a different perspective.

This time Jason Staats is joining us and he's sharing the reason he decided to leave his firm to become a full time content creator and his decision making process around that. and also how he brought it up with his business partner and how they figured out the transition.