Gina Schaefer [00:00:00]:
I I had a teammate years ago who said, Gina, do you keep opening new stores so that you can fix your screw ups from the last one?
Celeste [00:00:06]:
I think they're true. Yeah.
Gina Schaefer [00:00:09]:
And I don't you know, you don't get a do over. When you sell your business, you've sold your business. You know, 99.9% of the time, there are situations where people buy them back. But, I don't get to do this again unless I start another business to sell. And so I I do hope that I can instruct people on some of the pitfalls. And I think for us, they weren't necessarily pitfalls as just ways that maybe we could have strengthened the communication or the biggest pitfall really is not know and it's not even a pitfall. It's not fair. It's not knowing what your options are.
Celeste [00:00:39]:
Welcome to Planning Reimagined, a podcast from the planning experts at Robin Glenn and RX Investment Partners for wealthy families and successful business owners. What does it take to walk away from a business that you've built from the ground up? Well, today, we're sitting with somebody who's done just that. From taking one hardware store to a thriving chain and then leading a remarkable exit that empowered her entire team. Welcome back to another episode of Planning Reimagined, where your wealth journey meets our expert insights. I'm your host, Celeste Moya. And today, we're continuing our business planning series with a very special guest who has lived through the challenges and the triumphs of a successful business exit. It's truly an inspiring story that you don't wanna miss. I am so thrilled to welcome Gina Schaeffer, author of Recovery Hardware and a dynamic keynote speaker who's transformed communities be through her business acumen and inclusive workplace practices.
Celeste [00:01:45]:
Gina, we sincerely appreciate you being with us today and are really excited about our conversation.
Gina Schaefer [00:01:50]:
Me too. Thanks.
Celeste [00:01:52]:
Well, let's just jump into it because we have a lot to cover. So we definitely wanna start with your story, your journey, you know, through this. I'm sure, quite a, epic journey that you've had in the business place in the business workplace. So you started with 1 hardware store in 2003, and you built it into a chain of 13 before your exit. So first of all, congratulations on that. It's an accomplishment in itself. Thanks. But can you kind of just walk us through through that journey?
Gina Schaefer [00:02:21]:
Yeah. It's well, I mean, I think it's a fun story, and it can be as short or long as you want it to be. But I was a tech reject. I got laid off for 3 times, 3 times from tech companies, in the mid nineties. And so the 3rd time I got laid off, I happened to be living in a neighborhood called Logan Circle. And Logan Circle was a neighborhood in the middle of DC that had been destroyed by the riots when Martin Luther King was assassinated. And so that is significant because the visual for this neighborhood is bleak. A 1,000 people were arrested or or injured.
Gina Schaefer [00:02:51]:
Over 300 businesses were looted, burned, or closed. And the neighborhood really just kinda fell apart. It was super diverse. It was vibrant, and everybody basically moved away. And for 25 years, houses were boarded up. There were very, very few businesses. The streets were littered. I mean, it was everything that you would imagine of a of an abandoned urban neighborhood.
Gina Schaefer [00:03:11]:
And in the mid nineties, early nineties, people started moving back to the neighborhood because it was cheap. And I was one of those people. And so I moved to the neighborhood. My then boyfriend, now husband, got jealous. He moved to the neighborhood. We got involved in the community association, and everybody in that community association was clamoring for a hardware store. And so, really, what happened is I got laid off for that 3rd time. I drove home.
Gina Schaefer [00:03:32]:
I said, I don't wanna commute anymore. I actually said I don't wanna work for a man, which is not fair, but my boss at the time was a guy, and I held everything against him. And so I said those two things, and Mark said, what are you gonna do? And I said, I'm gonna open a hardware store. And I like to joke that, like a good spouse, he didn't say a word. I really don't remember if he said anything, like, you're crazy or what are you thinking or that's great. But that's what sort of set me off on this trajectory. 3 months after I opened that first location, he came home from work. He was also in the tech industry, but didn't have the history of getting laid off that I did.
Gina Schaefer [00:04:03]:
And he said, you're having a lot of fun. Can I work with you? And so we became business partners in late 2003, and we've been business partners ever since.
Celeste [00:04:10]:
And you're still married, which is phenomenal.
Gina Schaefer [00:04:12]:
So yes. Still married. I think that's a very important point. Oftentimes, when I'm giving a keynote, someone will say, can you just talk about the husband and wife thing? I'm like, no. Yeah.
Celeste [00:04:19]:
Like, that's a whole other part of it. Yeah. Yeah. It really works. That's a whole other conversation. That's amazing. And for you to give us in such a great way back to the community, I know for you, it was also probably incredibly rewarding to do something for yourself, but also to be able to give back to a community that was clearly you know, had a lot of hardship and had been broken at times. That's amazing.
Celeste [00:04:37]:
So, you know, what were some of the, I guess, kind of key milestones? Because going from starting the hardware store, that, you know, that sounds hard in itself, but taking it to 13, kind of what were some of those key milestones, and how did your vision evolve as you were growing this business?
Gina Schaefer [00:04:52]:
I love the fact that I can look back in hindsight and make it sound like we had everything planned and everything was so organized because it really wasn't. We opened that first location not knowing really that we were ever gonna have 2. What we didn't know what was gonna happen. And so, so, about a year in, people started coming in from other parts of the city saying, hey. Will you open in our neighborhood? So the interesting thing to note is when we opened, the Washington Post ran an article that said some said that in 1975, I think this was the statistic, there were 50 local hardware stores in the District of Columbia. And by the time we opened, there were about 6. And so there were 700,000 people in DC. There were these neighborhoods that were coming back to life, and everybody needed hardware stores.
Gina Schaefer [00:05:31]:
And so it was a good idea at the absolute right time.
Celeste [00:05:35]:
Mhmm.
Gina Schaefer [00:05:35]:
And people started coming in from around the city, letter writing campaigns, phone calls, which was overwhelming and super exciting. And so about a year in, so 2,004, I was working at the cash register because we wore all the hats that we could in those days. And a gentleman came in, and he said, I have a property for lease across town near Georgetown University. Would you be interested in looking at it? And we went to look at it, and we signed a lease. I mean, it might have been a couple weeks later. It was very quick. And so we opened our second location 2 years later, and then we opened 1 a year for 10 years. And I shouldn't just say open.
Gina Schaefer [00:06:07]:
So over the years, we've purchased 5 from other owners, built 10 from scratch, including those first 3. Actually, the first four were built from scratch. 5, 6, first five. And then, we've had to close 2 that didn't work. So we were growing at a fairly fast clip. We had a great banking partner starting with that second location in National Cooperative Bank, and we started building really what our core values were gonna look like so that we could take up someone in the first location, have them manage the second, someone in the second location, have them manage the third. And all of that was wonderfully organic And even more to our story, and again, looking back in hindsight, how perfectly it worked out. Some of our first employees were coming from the Whitman Walker Addiction Services Program, which happened to be one of the only institutions in Logan Circle when we opened.
Gina Schaefer [00:06:56]:
Mhmm. And so folks were coming in, after their recovery meetings, and they needed a job. And I just started giving people jobs. And I gave you know, Shane will tell you, I gave him a job, and then he called Skippy and said, go see that lady at the hardware store who then told Brian, and I could track this. You know, it's like family lineage. And so we created core values so that folks who didn't have hardware or retail experience, particularly those in the these this recovery program, could grow with our team and become managers of the future locations.
Celeste [00:07:28]:
Yeah. And so interesting. I think every business owner would be on the same page as you is maybe you started with an idea that evolves over time, and things prove you wrong and other things prove you right. You know?
Gina Schaefer [00:07:38]:
Yep.
Celeste [00:07:38]:
You might have had questions or people may have question, why are you hiring certain individuals? But, clearly, it worked, and you were once again giving back to the community. I I think of that picture where it's as, you know, the path to success is kinda like this, you know, all over the place. It's not linear. So it's kind of, as they say, rolling with the punches and just going kind of being adaptable to this situation. So it seems like that's exactly what you all were doing. So I know we're kind of going quickly through this journey, but, at what point at some point, you know, you've built it, but at what point did you first start thinking about, wow. We've done this. This has been great.
Celeste [00:08:12]:
It's been successful. But I think I'm ready to maybe exit from this.
Gina Schaefer [00:08:17]:
I don't know if well, I think I really started thinking about it in 2016, very specifically because I wanted a sabbatical. And so in my brain, I could leave and come back, or I could just leave and that could be it. People people from the moment I opened had said, what's your exit strategy? But, you know, I was 30. I guess I was 33 when I opened that first location, which is not that young. But I had never opened a business before, and so I really didn't understand why at that point I needed to think about exit strategies. And hardware stores are very multigenerational. And so they're often just passed down through the generations, or they're given or sold to another family member. I didn't have any I don't have any children.
Gina Schaefer [00:08:55]:
I don't have any nieces or nephews of the age where they would be able to take over. And so I think part of why we didn't think about it is it wasn't right in front of our face. A lot of my friends who are taking over for their parents have known since they were born that if they wanted the family business, they were gonna get the family business. And so that was never a topic around our dinner table. But people did say to me in a lot on a lot of occasions, what's your exit strategy? And I think from the hardware perspective, same theme, people were nervous. Well, she doesn't have any kids. What's she gonna do? And around 2016, I was getting ready to roll off a 9 year tenure on the Ace Hardware board of directors, and I really wanted a sabbatical. And that sabbatical didn't work out, but it also just made me start thinking about why did I wanna get away? Where do I wanna go? What does that mean for the long term implications of the business? And so that planted the seed right there.
Gina Schaefer [00:09:45]:
That was really the genesis of it.
Celeste [00:09:46]:
Yeah. No. That makes sense. It's funny you talk about, you know, hardware stores being generational. I grew up in a tiny town in South Texas, and, I remember going to our local hardware store. It's kinda where you got everything. And I think it's still there, and it is definitely run by the same family that's had it for a long time. So, it it was a staple in the community, so I can see why that was the thought.
Celeste [00:10:09]:
And it it's also interesting that you mentioned because I think it's really important for our audience. It's something that in this series we've mentioned over and over. From the very beginning, even if you don't really know what it's gonna look like, you need to start thinking about that exit because you need to be building in a way that's gonna make that exit successful. Whatever it is, however it looks at that point, is making sure you have everything organized to do it. So I think that's that's such an important point, that you share. So, you know, everything that you've mentioned is is great. We've talked about this journey. I know we've gone through it quickly.
Celeste [00:10:42]:
You gave back to the community, and now you're here at this exit. And it's really the exit that we're gonna focus on today because it was an incredible thing you did. So let's kind of just transition to that. So one of the most intriguing aspects of your exit was how you did it, the decision to sell the business to your team. You created over a 130 co owners. So that's I mean, we I just keep there's a there's a pattern here. Right? It's you keep giving back and giving back. So kudos to you for being able to do that in the community that, you know, you started off with that maybe was, like I said, a little broken.
Celeste [00:11:20]:
What led you to do to take this unique approach in your exit?
Gina Schaefer [00:11:25]:
Well, this is what's so perfect because it was a full circle moment. So this is not a shameless plug for my book, but I tied a bow on it with this exit strategy. So I'm just gonna bring it up.
Celeste [00:11:33]:
Yeah.
Gina Schaefer [00:11:33]:
Absolutely. I I created Recovery Hardware because the nickname the the community nicknamed us Recovery Hardware because there were so many people in recovery from that community that we were hiring. One day, one of my teammates said, you know, the store has been nicknamed the the the main store. The main store has been named Recovery Hardware. And I thought, that's a great name for a book. And people have been asking me for years to write my story, and I thought, no one needs to read about a chick running a hardware store. Well, it turns out that's interesting to a lot of people. But to me, it was the stories of the people who helped me build the business that were the most interesting.
Gina Schaefer [00:12:06]:
So I started writing not knowing what the exit was gonna be, and it took me almost 2 years. And by the time I got to the last chapter, we had created the exit strategy. And so it was this beautiful bow on this story. And the reason that we created it, truly, remember what Logan Circle looked like when we first started the business. Mhmm. In 2020, the protests that were happening in the United States were starting right in front of my office, which is exactly where the riots had happened in the sixties. And the protesters were walking down 14th Street in front of our original store. And my team and I I mean, literally, at one point, my assistant thought I was gonna fall out the window because we were hanging signs.
Gina Schaefer [00:12:45]:
And, you know, we really just felt the solidarity with the things that the marchers wanted. They wanted generational wealth. They wanted equity building for people of color. They wanted gender equality. And here I was, the CEO of this traditionally male dominated, business. And so it really made my husband and I start thinking about what it is we could do to be part of the solution everyone was asking for. And we'd started doing all of our research, or we had already started at that point. Were we gonna sell to private equity? Were we gonna find a private buyer? You know, a lot of the hardware stores close.
Gina Schaefer [00:13:15]:
They don't look for anybody. They just lock the doors. We certainly didn't want that to be the case because, you know, we feel a lot of, responsibility to our neighborhoods and our team. We looked at worker owned co ops as an option, and then we heard about an ESOP. And the one nugget that we did not understand about an ESOP well, the one big nugget, I think, for us was that employees don't put any money in. They don't actually buy it. Mhmm. And so we couldn't understand how we were gonna sell our business to our team and just have everyone on the team be able to afford to to buy in, frankly.
Gina Schaefer [00:13:45]:
I mean, we just we really didn't know how it worked. And so we had researched all of those options. The protesters started the protest started in 2020. I met someone who understands ESOP's inside and out. He's an amazing, amazing mentor. And I called him one day, and I was like, you gotta help me figure this out. And by the time I got off the phone with him, we knew that was gonna be what we would do. That's incredible.
Celeste [00:14:05]:
Yeah. Yeah. Talk about a full circle moment with the protest coming back around. That's incredible. So, you know, as you so you have a mentor helping you structure it, but maybe we can go in a little bit more detail. Some of our audience may not be familiar with how an ESOP works. And it might it's incredibly intriguing because as you mentioned, you don't have to actually put money in as an employee, right, to be part of this model. So how did you structure this employee ownership model? And along the way, maybe what were some of the challenges that you had in implementing it? Maybe some of the things you would have done differently or could have improved upon now that, like you said, hindsight, you know, 2020.
Gina Schaefer [00:14:44]:
So, ESOPs are regulated by the Department of Labor, which I think works to everyone's advantage, to be honest. It adds a layer of complexity for sure. It adds a layer of expense for sure. Those are usually the 2 big challenges to forming an ESOP. But it's regulated because people in the past, as you can imagine, plan to sell their business to their employees. They overvalued it. They took all this money out of it, and they left the employees holding the bag of a business that wasn't worth anything on paper or anything in general. And so it is very heavily regulated.
Gina Schaefer [00:15:13]:
I still think of us as unicorns. There's about 7,000 ESOPs in the country now. And I think that it's been the oldest one that I've met, I believe, is about 50 years old. Publix grocery store in the south, they're mostly in the south, is one of the largest ESOPs in country. In fact, it's one of the largest ESOPs in the world. So, mostly because most of the world does not have the concept, although, Canada just passed some laws that'll allow, employee ownership trust to form, which is really great. So we realized what we needed to do and how to and and who who we needed to hire to do it. So there are trustee trustees that you hire, and I call them my my teammates' people.
Gina Schaefer [00:15:48]:
Right? He's their person. And then you hire a a consultant who helps with the valuation. The consultant creates a valuation for the business. My husband's a CFO. He created a valuation for the business working with our bank, and then the trustee creates a valuation for the business. And those three heads essentially put the papers together. We actually step back at that point. We're not involved in that negotiation, and everyone sees if the valuation aligns.
Gina Schaefer [00:16:11]:
And, you know, if you've been doing everything up to snuff, if you've been documenting everything, if you've been following all of the IRS guidelines, if you all have agreed on 4 times EBITDA, 6 times EBITDA, whatever your whatever you agree on as the term, your valuations should be pretty closely aligned. And that's exactly what we had happen. And so we settled on a sale price. You form, a trust, and the trust owns the business on behalf of the team. So, basically, the business bought us out on behalf of that trust. I I always wish that I had a circle diagram when I try and explain this because even 3 years in, I feel like I might complicate it. But we took a loan out from the bank, as the business. They paid us that chunk that we were selling out of that loan, and now the business is paying the loan back.
Gina Schaefer [00:17:00]:
The trust is paying the loan back. We've sold 30% so far, so we didn't wanna overburden the business with debt. We say we because I'm still the majority owner. We still have the an appetite for growth. We want the ESOP to get bigger because that just means more money for everybody. And so we're probably gonna sell it in 3 tranches, which is fairly common. There are fantastic tax implications. And I'm gonna back up for a second because this is interesting.
Gina Schaefer [00:17:24]:
You had hinted at how you plan for it. I am not the numbers person. I was definitely not smart enough to know this 21 years ago. But I had a, an older hardware retailer stop by to give me some advice. And he said, you should shut off your cash registers every night at 5 PM. And I was like, why would I do that? And he said, so you don't pay taxes on what you sell between 57. Now I know how ridiculous and illegal that sounds. At the time, I knew it sounded illegal, but I never thought about the future ramifications.
Gina Schaefer [00:17:55]:
And I did the math because I'm gonna use this statistic in a keynote that I'm giving in a couple weeks. If I had listened to that man when we did our final valuation, I would have had to have devalued my company by $73,000,000 in revenue
Celeste [00:18:09]:
Wow. Which is
Gina Schaefer [00:18:10]:
a lot of money.
Celeste [00:18:11]:
A lot of money. Yeah. Absolutely. Yeah.
Gina Schaefer [00:18:14]:
It was the dumbest advice ever. I mean, I think because you wanna have the end goal in mind, the end game. And if the end game is to sell your business for maximum value, you wanna make sure you've been maximum above board in how you're valuing it. And so we got to that valuation period, and we were aligned because we had done the right things for all of those years. And when we agreed on what the multiple of EBITDA should be, you know, with some wiggle room on others either side so the trustee and the the consultant could talk through the that stuff, We came up with a really good valuation. Now the benefit one of the big benefits of an ESOP are the tax benefits. And so the way that it was explained to me is that we would have had to have sold the business because people have said, once you've gotten more if you sold on the private market, once you've gotten first of all, I would have never sold it to a private equity company. I'm not embarrassed to say that.
Gina Schaefer [00:19:05]:
Once you've gotten more money if you sold it to a PE company, we would have had to sell it for 20% more because the tax implications for me as the seller, the employees as the new owners, and the business as the holder of this trust are enormous. So calculating those tax savings all along the route makes for me the wait for the whole payout worth it.
Celeste [00:19:30]:
Absolutely. So a few things I took from that. 1, choose your mentors wisely. Right?
Gina Schaefer [00:19:34]:
Because Exactly. Don't maybe he
Celeste [00:19:36]:
was more of an enemy. I don't know. At that point, you're, like, trying to derail you, but, don't take all the advice. But what you said is so important on the planning, doing things right, having things organized. We had a tax person, a CPA on one of our previous episodes, and that was her key thing is just, you know, keep things in order. It's so much easier to just kinda keep it in order, do it right, than have to go back, and now you have to clean up a mess that you left behind, that trail of a mess. So you were prepared at any point in time, really, if that exit opportunity came, and you were also you were in a position of power to make the choice of how you wanted to make your exit. Right? Because you didn't have to do you weren't forced to do anything.
Celeste [00:20:20]:
So I think that's important to take away too is you positioned it in a way that you wanted to do it. It wasn't because you hadn't done things right and now you needed the money or there was taxes due, things like that. So I'd also be interested to hear so as you're, you know, building out the the ESOP and the structure, like, how did you approach the employees' value? What was their initial reaction? You know, how what was their feedback on it?
Gina Schaefer [00:20:45]:
So, really, it was all over the place. One of the things, I actually I made a note on something that you sent me because I hadn't thought about it in a concise manner. And I think your question was, and and forgive me for jumping the gun, but the 3 things that you made your exit success that made your exit successful, which I think ties in perfectly with this question, research, curiosity, and communication. So that communication piece, when we decided we were gonna exit this way, we we've built a really strong corporate culture. It's a cohesive team in a lot of ways. I don't think we get it right all of the time. But if you at its roots, it's a mom and pop company, and the mom was leaving. That sounds really cheesy, but, that's the best way to describe it so that people understand what I'm talking about.
Gina Schaefer [00:21:29]:
And if mom abandons the family, things can fall apart. And I'd never thought I was the end all, be all, but I I knew based on conversations I would have with some of my teammates that this was gonna be challenging. So we hired a business coach who worked with my team and I for about 2 years on this transition. Now I'm not saying that it lessened all of the anxiety, but it certainly teed things up for everyone to know when I was leaving. And so we we announced the ESOP, and we announced it would be a 2 year, step down because part of sorry. I never even said this, but it's part of my part of the exit strategy for the business was me leaving as CEO. Mhmm. And so I needed to find a replacement for myself.
Gina Schaefer [00:22:07]:
And so that first day, though let me back up for a second. The first day that we announced it to the leadership team, which was about I guess there were probably 30 people in the room, The reactions were all over the place. Almost nobody in the room had ever heard of an ESOP. We had 2 people in the room who had worked at ESOPs before who were super excited about the fact that they were now gonna be at another one, which was really cool. I had 2 people, I think, literally broke down into tears because they thought that I was saying that I was leaving that day or that Mark and I were leaving that day. Of course, that wasn't the case, but they heard what they wanted to hear. And then there was just a whole lot of confusion. Mhmm.
Gina Schaefer [00:22:42]:
We we were fortunate. We were working with, One America company that was helping us with the transition. They're a a ESOPs are really a qualified retirement plan. So most people, if you think of them kind of like a 401 k, it makes more sense in their head. And One America manages 401ks and ESOPs. And so we had representatives from there with us the day we made the announcement. So, basically, I could do the rah rah. This is where we've come from.
Gina Schaefer [00:23:03]:
This is where we're going. And then experts could step in and really answer the nitty gritty questions, how you qualify, when you qualify, what does it mean. And then, we mounted a fairly comprehensive, FAQ page, landing page so that if the employees couldn't get ahold of one of us right away, they could go look there for questions and answers.
Celeste [00:23:25]:
And and so you said something once again really important to reiterate is that you were key to your business. So many business owners I just had a conversation this week with a financial adviser who's working with a very, successful construction company really led by one person. He is the key person in that company and has never even thought about that thought about it in that way. He's just growing a business, and he's done very well. And now he's at a point where if something was to happen to him, it would be incredibly detrimental to that business and his family who depends on that business. Right? So it's important for business owners to recognize their importance in the business, which is why we also talk about, you know, succession planning and thinking about that throughout the process. Another thing you mentioned was having that business coach. We talk about having experience, having a team the right team of advisers around you as you're getting to that point in time or that exit and even before because there's so many things that when you're in the business, you miss.
Celeste [00:24:24]:
It's emotional. Right? There's Yeah. It's there's so many parts of it that you ignore because you're focused on revenue and your employees and it's your baby. So so key that you all are able to do that without maybe even knowing that these were such instrumental things. You all did the right thing, which as we're getting to, you know, that through the story was what led to the success, the things that you kinda did and really kind of learned along the way. So we talked another thing just to kinda wrap up this section is the tax advantages that you mentioned before. I think business owners should weigh out, you know, the different options that are out there. Once again, if you've prepared yourself, if you have the right advisers, they can guide you around.
Celeste [00:25:08]:
Maybe I do wanna pay the tax debt. Maybe I don't. Maybe I need to go the private equity route or the private sale, but, it was interesting to hear that you, you know, you maybe explored it or looked at it minus the private equity, which I respect. This is a no judgment here.
Gina Schaefer [00:25:23]:
So I respect you. Opinionated, Celeste.
Celeste [00:25:25]:
Yeah. It's yeah. No. That's great. I love opinionated women because I'm one of them. You know? I was just telling somebody yesterday. I'm like, that is not an aggressive comment. That is a educational comment on my opinion.
Celeste [00:25:38]:
So I respect that. Absolutely. You know, weighing out the options is really important so that you have that that right team around you. So we we touched on this a little bit. You grew the business. You're in it. Now you're still part of it, which is great. Some people walk away from it completely.
Celeste [00:25:55]:
Right? They just, like, sell the business. Many times, we do see that the business owner is requested to to stay and kind of continue to lead for a few years. But we we talk about the numbers, and we talk about the documents. What we don't always talk about is this the human side of it, the emotion Yeah. Which I referenced right now. That tends to be ignored. People, you're so busy getting to that exit point that you don't think about, but what about after? Yeah. So I would do.
Celeste [00:26:23]:
Love to get your perspective on that. You know, you built this business from the literally from the ground up. You've nurtured it. How challenging was it to walk, you know, to not completely walk away, but to start to pass the baton? And how did you personally prepare for that?
Gina Schaefer [00:26:40]:
Well, you know, I have a lot of examples over the years of, again, again, my friends in hardware who were transitioning into the business, after their parents were exiting. And that, I really that was a front row seat to all of the emotion because it it resulted in fights. It it resulted in stress, particularly for the folks my generation that were ready to take over, but their parents weren't willing to let them take over. And so, I mean, I was grateful that I didn't have to live through that experience, but it also made me realize that regardless of how excited I was about the process, everyone on my team might not emotionally be in the same place. And so that was a really big deal. The other thing that I think is really cool for about ESOPs is that one of my mentors owns some hardware stores out West, and he decided to form his ESOP at 60 and end it at 70. And he did that because he knew he wasn't as active in the business anymore, but he wanted to still be relevant. So he wanted to go in and work every day.
Gina Schaefer [00:27:32]:
But he also wanted he and his wife between the ages of 60 70 to really benefit from the fruits of all of his labor. And so I don't know what his initial sale was, but it might have been a couple $1,000,000. And he got that money, and he was able to or is able to do all of the things with his wife that he wants to do while he continues to work part time, quarter time, whatever that is, until the sale is final. And so I think you can structure it in ways that allows your lifestyle to to work for what you wanna do after. And so I knew that I wanted to step down as CEO and not have an involvement. I mean, I think maybe it's ego. I couldn't I I I dabbled with, well, maybe I'll step down as CEO, and I'll ask if I could just do training because I think I'm pretty good at training. Or maybe I'll step down as CEO, and I'll do b to b stuff because I like sales.
Gina Schaefer [00:28:20]:
I mean, there's a lot of things that I really like to do. I also couldn't imagine being there and not being the CEO, and I think that was a really hard conversation I had with myself. 1, because I got to the point where I had this fantastic team doing a big chunk of the work around me. You know, I didn't have any specific deliverables. I was the the cheerleader and the corraller and the meeting planner. And so it was a good hard conversation with myself to figure out, like, you're still gonna be majority owner, but do you want to be involved? In fact, the new CEO and my husband, who's still the CFO, wanted to take me on a tour to see some spaces that they're looking at for new locations, and I love that part. I mean, that I walk the neighborhoods. I get super jazzed.
Gina Schaefer [00:28:59]:
And I was finally like, no. Like, I'm always gonna have an opinion. I'm always gonna feel like I could easily get sucked back in. I don't think I should go. And that was a really hard that was really hard for me to say because it's fun. I love it. I knew, though and maybe, again, this goes back to lessons that I had learned from some of my, associate or older like, my the parents of my my my generation. A lot of them didn't know what they wanted to do next, and I knew what I wanted to do next.
Gina Schaefer [00:29:27]:
And I feel like a lot of them signed up to build this business for life, and I just I've never done anything for life. I like to move houses every 6 years. I I travel, and I never go back to the same place. And so to say, oh, I'm gonna open this business and love it for 50 years, 40 years, I just didn't see it in my cards. It's not that I don't love it. I just couldn't imagine being there for that long. That answer your question?
Celeste [00:29:51]:
Yeah. No. Absolutely. No. It it no. It definitely does because it seems like there's roller coasters there. Right? It it wasn't just, you know, I'm so thrilled that I'm gonna, you know, pass this along. But I'm sure that there was a there was a lot of, I would call it, metrics or parts of this timeline in which you prepared for without knowing.
Celeste [00:30:13]:
Like, so maybe we can talk a little bit, and it's kind of backing up a little, but how did you start to pass that baton? I mean, at some point, you knew that you didn't wanna do it forever. And so how did you start to say, I need to prepare my team for when I'm not here? Like, how did you start to do that? Because that's a really hard thing for business owners to do.
Gina Schaefer [00:30:33]:
It's very hard. I mean, when we knew we were gonna form the ESOP, we started looking for a business coach. You know, there are touch points over the last 20 years where we've hired outside experts because we are not those people. I like to think of it as when I needed an adult in the room. Yeah. No matter how old I got, you know, you wanted the adult to come save you. So I realized, I guess, it was probably, well, 2020, 2021, 2020. I needed an adult in the room, and we decided it needed to be a business coach to work with myself and the team.
Gina Schaefer [00:31:02]:
So that transaction happened as smoothly as possible. And one of the things that we did with that that business coach, which was really the most beneficial, was a a Hogan assessment. Some people understand DISC scores Mhmm. Myers Briggs in a in a smaller way. But we walked our leadership team, and it's about 8 of us, I guess, about 8, through the Hogan assessment. And then we broke it down by the skill sets that we were lacking or would lack if I left. And I really didn't think we would be lacking. There was a visionary component that most many CEOs have that I knew we would lose, but I have the ability to roll with change unlike anybody else on the team, and we didn't know that.
Gina Schaefer [00:31:43]:
I certainly didn't know that. And I remember Josh, the business coach, lining us up in this conference room. And he would say, in this metric, Gina's a 3 and Mark's a 4 and Will is a 5, and we would be lined up, you know, in a fairly cohesive pattern down the the conference room. Well, we got to the metric of change, and I was, I'm not lying, at one end of the conference room, and the next closest person to me was 3 quarters of the way down. And he looked at this line, he goes, you can't leave. Like, you have to have someone on your team who can drive change, emotionally handle change.
Celeste [00:32:16]:
I was like, no. Yeah. What are we gonna do?
Gina Schaefer [00:32:21]:
But it was a huge eye opener for us. So that meant that we had to find a CEO to replace me who could really handle change. And I would say the most fortuitous thing was already right in front of us. Unfortunately, we put 2 and 2 together, but we ultimately ended up buying a store in Fairfax, Virginia that was owned by our friend Craig Smith, who had owned that store for, I think, about 10 years. He grew up in the hardware business with his family, but he owned this one by himself, for several years. And I we took him to lunch. Mark and I took him to lunch, and I said, we're selling the business to the team. We think he would be a really great replacement for me.
Gina Schaefer [00:32:58]:
We'd like to talk about that more. Are you interested? And I'm not even sure if we got out of lunch before he said, I'm absolutely interested, which is fantastic. Mhmm. He had already worked with our leadership team in a variety of ways, so they already knew him. So they weren't gonna be scared of this, you know, new person. He knew them too, so he wasn't gonna be scared of walking into a brand new team that might, you know, distrust him or whatever. And then we had him take the Hogan assessment too, and he and he had to pass that change piece. Otherwise, I don't know what we would have done.
Gina Schaefer [00:33:27]:
And, really, he was the perfect candidate. And so took about a year to make that transition happen, but his store came on board as part of our ESOP because we had already formed it at that point. He came on as CEO. And then really to get to the heart of your answer, we spent about he wanted me to stay for a year, and I committed to 6 months. And so I stayed for 6 months in an overlap, situation. And then, I mean, now I'm just you know, I'm a text away if he needs me. So
Celeste [00:33:52]:
Yeah. That's great. Yeah. How I that's incredible about that Hogan assessment. And, I'm sure even recognizing that about yourself, sometimes when we go through these, you're like, that's not me, and you're like, no. That really is me. We are kindred spirits. You know? I get bored with things all the time.
Celeste [00:34:08]:
I told my husband a long time ago when we got married, I said, I knew you were the one because I wasn't bored of you. Like, you know so I get it. Like, you kind of have to be adaptable, when you're in leadership roles or running a business because every day is a new adventure. I feel you have to be able to just go with the flow and change your perspective, admit when you're wrong, and keep going forward. Right? So that's incredible that you found somebody that also had those, characteristics like you. Yeah. So we've talked about the journey, the exit, the why, how you did it. So you've learned a lot through this process, and, clearly, you share this back with business owners and other people through your books and this, the the speaking that you do.
Celeste [00:34:54]:
So it's incredible that you can still do that, that you can take what you've learned. And another thing I've noticed in everything you've said is that you learned. Like, you heard somebody say this, and you're like, that's a good idea. You saw somebody else do this wrong. I'm not gonna do it that way. You know? No. I don't wanna break the law maybe. You know? And so so it's I think that's important in itself, but we work with a lot of business owners that I absolutely love.
Celeste [00:35:19]:
So all my clients, you're great. However, many of them are incredibly stubborn. Yeah. They're they're immortal, first of all. We're, you know, in the insurance space as well, and so they're never gonna die. They're right. It's their business that has to be done their way. And Yeah.
Celeste [00:35:34]:
Once again, my dad's a business owner. I've been, you know, an entrepreneur, and I I understand where they're coming from. But what have you seen business owners? Like, what are some of the mistakes you've seen them make in these exits maybe in part because of some of that stubbornness that comes with being a business owner?
Gina Schaefer [00:35:52]:
I I love this question. I I had a teammate years ago who said, Gina, do you keep opening new stores so that you can fix your screw ups from the last one?
Celeste [00:35:59]:
I think they are true. Yeah.
Gina Schaefer [00:36:02]:
And I don't you know, you don't get a do over. When you sell your business, you sold your business. You know, 99.9% of the time, there are situations where people buy them back. But, I don't get to do this again unless I start another business to sell. And so I I do hope that I can instruct people on some of the pitfalls. And I think for us, they weren't necessarily pitfalls as just ways that maybe we could have strengthened the communication or the biggest pitfall really is not know and it's not even a pitfall. It's not fair. It's not knowing what your options are.
Gina Schaefer [00:36:28]:
When you throw in employee worker owned co ops and ESOPs, most people have never heard of those two things, so they can't even evaluate them as options for their sale. And so that's not really a pitfall. That's just an unfortunate reality. And so part of what I hope to be able to do with all of these amazing folks at ESOPs that I've now met is talk about it more. This you know, the the the timing is ripe. Everyone's talking about the silver tsunami, and the baby boomers are retiring in waves. Private equity is is gobbling up you know, the veterinary clinic has gone or rolled up. The, like, all of the spots have rolled up.
Gina Schaefer [00:37:04]:
Like, this is the time for this kind of stuff to happen. And so I just I think the pitfall really is doing it too fast, not including your team, and not knowing what all of the options are.
Celeste [00:37:15]:
Yeah. Great Great point. Once again, going back to being informed, having the right advisers for yourself. So $1,000,000 question here. If you were gonna go back to the very beginning of your journey, what advice would you give yourself today?
Gina Schaefer [00:37:30]:
This is my least favorite question, and I can lie to you.
Celeste [00:37:33]:
I'm sure it's hard. Yeah. Yeah.
Gina Schaefer [00:37:35]:
Because I I mean, my advice might be to do everything the same, and that sounds super cocky, but this is why I mean this. I was so dumb, Celeste, and I shouldn't use dumb, I should use naive or inexperienced, that I didn't know what I didn't know. I didn't know what to do next. I didn't know what was coming around the corner, which was kinda great because I didn't foresee the challenges that we were gonna have and stress about them before I had that challenge. And so, honestly, my advice my advice to everybody is don't stress about how you would have done it differently. Learn from it. Keep going. I mean, I did have the benefit of opening multiple brick and mortar locations.
Gina Schaefer [00:38:10]:
So if I did something that didn't work when I opened 1, I could change it. You better believe that even though I changed that one thing, I still made 5 more mistakes.
Celeste [00:38:18]:
Absolutely. You know? Yeah.
Gina Schaefer [00:38:20]:
I mean, I hear myself answering this question, and I feel like I sound super conceited.
Celeste [00:38:23]:
No. Not at all.
Gina Schaefer [00:38:24]:
Think that being naive in the beginning really got us to where we got to.
Celeste [00:38:29]:
But but, see, you learned from your mistakes. Right? It's the whole being adaptable. It doesn't have to be the the same way just because it's always been that way. So Right. I was filling out this, like, interview questions yesterday, and and one of the questions is, like, what are some of the best, lessons that you've gotten in life? And one of the things my dad would always tell me is, I'm okay if you fail. I mean, just not okay if you fail and you don't learn from it. So as long as you learn from it, it's gonna be fine. And so, I mean, that's something I've always thought of because every day, you know, you don't know what's gonna happen.
Celeste [00:39:00]:
But if you're learning from it, then you're growing and you can continue to do it better. So I I don't think your answer is cocky at all because you really don't know what tomorrow's gonna bring, and you just have to be adaptable and keep moving forward. Now after your exit, you've done some incredible amazing things, and I absolutely want for our audience to hear about that. So tell me tell them more about, you know, what are what are you doing now? What are some of these amazing opportunities that have come after your exit? And because of all the experience you gained.
Gina Schaefer [00:39:30]:
I've always been very curious, which is one of the I mean, maybe that could have been an answer to your question is, like, just even be more curious. And so over the years, I realized that I was hiring what I called nontraditional teachers, people who had been homeless. One of my favorite long term teammates had been a drug dealer, people who were in some sort of recovery, which all of that led to writing the book. And then I realized that what I really wanted to do with their permission was tell those stories because I wanted to hopefully inspire other business owners to really think outside of the box in hiring, which was interesting for me because I think retailers or business owners get stuck in the box that is our 4 walls. If you're not just an ecommerce business, you I literally walked into 4 walls every day, and I could have been stuck there. And so I, I signed up to take a 6 month public speaking course with a company called Heroic Public Speaking in Lambertville, New Jersey, world class organization. I would say that that experience probably changed my life and gave me my first formal speaking practice since high school and knew that once I stepped down as CEO, I wanted to do that in a much bigger way because I want to inspire other business owners. I get asked a lot to speak to groups of women who are in nontraditional fields.
Gina Schaefer [00:40:42]:
One of my favorite events 2 years ago was speaking to a group of female auto mechanics. I mean, you just don't walk into a room like that every day. The next one was a group of women who were engineers. So I'm I'm just hoping that I can build that speaking career, telling the stories of this amazing team of nontraditional teachers that we worked with over the years, many of whom are still owners now or who retired as owners, which is really cool, and then, hopefully hopefully, inspire some audiences to do some different things.
Celeste [00:41:09]:
That's incredible. And you wouldn't have had those opportunities if you didn't have all those lessons learned through being a business owner. Right. So once again, you're taking what you've learned and using it to continue doing the things that you enjoy. Regina, this has been it it's really you know, we talk a lot in this podcast about just general business planning and all the technical aspects of it, but hearing it from you, who's lived dead, who I'm sure there were ups, downs, roller coasters, there's the challenges, the triumphs, but seeing how you went through the journey, how you made your decision, you know, how the exit was for you and kind of what you're doing after now as well, it's all really great for others to learn from your experience and see that there is, you know, that rainbow on the other side. You can let go. It's gonna be okay because it's tough. I promise.
Celeste [00:42:00]:
Yeah. As long as you use, you know, what you've learned wisely as well. So you can always use it. And I think also a lot of what you've done is is, I know it's a business, but it's also selfless in the sense of who you hired, and now you're giving back to a community that really needs that information. We started this podcast because there was so much misinformation on what we do, and I'm sure a lot of those women, like the auto mechanics engineers, they're just possibly don't have access or don't know who to go to for that information. So having somebody like you, a mentor in itself, somebody that they can look and say, well, I look like that person. That's so helpful for them to have that. So thank you so much.
Celeste [00:42:40]:
We really appreciate you being on today sharing your story. It's it's very much an incredible journey. Kudos to you for everything you've done, through the business building and the exit. We appreciate you being here, and I know our audience is really gonna benefit from this.
Gina Schaefer [00:42:54]:
Thank you.
Celeste [00:42:56]:
For our audience, if you'd like to connect with Gina, we're going to include her contact information in our show notes along with some other helpful links and resources. And if you're considering exiting your business, remember, it's never too early to start planning. Reach out to those experienced advisors that can guide you through this very complex process. And don't forget to tune in to our next episode, which will be the last one in this business planning series. It'll be focused on post sale planning. So you sold your business. You have more money in your pocket. Maybe more money than you've ever had before.
Celeste [00:43:31]:
But now what? So we are gonna be focusing on some post sale strategies that are not only gonna help make that exit much more successful, but also help you mitigate taxes. So definitely an episode you don't wanna miss. If you enjoyed what we shared today, please make sure to like, subscribe, and share our podcast. And as always, thank you so much for joining us for another episode of Planning Reimagined, where your wealth journey meets our expert insights. We'll see you in the next episode. Thanks for listening. Don't forget to like and subscribe, and please be sure to follow on your favorite podcast player. To connect with us, you can email us at hello at robinglenn dot com or schedule some time with us via the link in the show notes.
Celeste [00:44:15]:
You can also find us on Instagram and TikTok at hello robinglenn.
I I had a teammate years ago who said, Gina, do you keep opening new stores so that you can fix your screw ups from the last one?
Celeste [00:00:06]:
I think they're true. Yeah.
Gina Schaefer [00:00:09]:
And I don't you know, you don't get a do over. When you sell your business, you've sold your business. You know, 99.9% of the time, there are situations where people buy them back. But, I don't get to do this again unless I start another business to sell. And so I I do hope that I can instruct people on some of the pitfalls. And I think for us, they weren't necessarily pitfalls as just ways that maybe we could have strengthened the communication or the biggest pitfall really is not know and it's not even a pitfall. It's not fair. It's not knowing what your options are.
Celeste [00:00:39]:
Welcome to Planning Reimagined, a podcast from the planning experts at Robin Glenn and RX Investment Partners for wealthy families and successful business owners. What does it take to walk away from a business that you've built from the ground up? Well, today, we're sitting with somebody who's done just that. From taking one hardware store to a thriving chain and then leading a remarkable exit that empowered her entire team. Welcome back to another episode of Planning Reimagined, where your wealth journey meets our expert insights. I'm your host, Celeste Moya. And today, we're continuing our business planning series with a very special guest who has lived through the challenges and the triumphs of a successful business exit. It's truly an inspiring story that you don't wanna miss. I am so thrilled to welcome Gina Schaeffer, author of Recovery Hardware and a dynamic keynote speaker who's transformed communities be through her business acumen and inclusive workplace practices.
Celeste [00:01:45]:
Gina, we sincerely appreciate you being with us today and are really excited about our conversation.
Gina Schaefer [00:01:50]:
Me too. Thanks.
Celeste [00:01:52]:
Well, let's just jump into it because we have a lot to cover. So we definitely wanna start with your story, your journey, you know, through this. I'm sure, quite a, epic journey that you've had in the business place in the business workplace. So you started with 1 hardware store in 2003, and you built it into a chain of 13 before your exit. So first of all, congratulations on that. It's an accomplishment in itself. Thanks. But can you kind of just walk us through through that journey?
Gina Schaefer [00:02:21]:
Yeah. It's well, I mean, I think it's a fun story, and it can be as short or long as you want it to be. But I was a tech reject. I got laid off for 3 times, 3 times from tech companies, in the mid nineties. And so the 3rd time I got laid off, I happened to be living in a neighborhood called Logan Circle. And Logan Circle was a neighborhood in the middle of DC that had been destroyed by the riots when Martin Luther King was assassinated. And so that is significant because the visual for this neighborhood is bleak. A 1,000 people were arrested or or injured.
Gina Schaefer [00:02:51]:
Over 300 businesses were looted, burned, or closed. And the neighborhood really just kinda fell apart. It was super diverse. It was vibrant, and everybody basically moved away. And for 25 years, houses were boarded up. There were very, very few businesses. The streets were littered. I mean, it was everything that you would imagine of a of an abandoned urban neighborhood.
Gina Schaefer [00:03:11]:
And in the mid nineties, early nineties, people started moving back to the neighborhood because it was cheap. And I was one of those people. And so I moved to the neighborhood. My then boyfriend, now husband, got jealous. He moved to the neighborhood. We got involved in the community association, and everybody in that community association was clamoring for a hardware store. And so, really, what happened is I got laid off for that 3rd time. I drove home.
Gina Schaefer [00:03:32]:
I said, I don't wanna commute anymore. I actually said I don't wanna work for a man, which is not fair, but my boss at the time was a guy, and I held everything against him. And so I said those two things, and Mark said, what are you gonna do? And I said, I'm gonna open a hardware store. And I like to joke that, like a good spouse, he didn't say a word. I really don't remember if he said anything, like, you're crazy or what are you thinking or that's great. But that's what sort of set me off on this trajectory. 3 months after I opened that first location, he came home from work. He was also in the tech industry, but didn't have the history of getting laid off that I did.
Gina Schaefer [00:04:03]:
And he said, you're having a lot of fun. Can I work with you? And so we became business partners in late 2003, and we've been business partners ever since.
Celeste [00:04:10]:
And you're still married, which is phenomenal.
Gina Schaefer [00:04:12]:
So yes. Still married. I think that's a very important point. Oftentimes, when I'm giving a keynote, someone will say, can you just talk about the husband and wife thing? I'm like, no. Yeah.
Celeste [00:04:19]:
Like, that's a whole other part of it. Yeah. Yeah. It really works. That's a whole other conversation. That's amazing. And for you to give us in such a great way back to the community, I know for you, it was also probably incredibly rewarding to do something for yourself, but also to be able to give back to a community that was clearly you know, had a lot of hardship and had been broken at times. That's amazing.
Celeste [00:04:37]:
So, you know, what were some of the, I guess, kind of key milestones? Because going from starting the hardware store, that, you know, that sounds hard in itself, but taking it to 13, kind of what were some of those key milestones, and how did your vision evolve as you were growing this business?
Gina Schaefer [00:04:52]:
I love the fact that I can look back in hindsight and make it sound like we had everything planned and everything was so organized because it really wasn't. We opened that first location not knowing really that we were ever gonna have 2. What we didn't know what was gonna happen. And so, so, about a year in, people started coming in from other parts of the city saying, hey. Will you open in our neighborhood? So the interesting thing to note is when we opened, the Washington Post ran an article that said some said that in 1975, I think this was the statistic, there were 50 local hardware stores in the District of Columbia. And by the time we opened, there were about 6. And so there were 700,000 people in DC. There were these neighborhoods that were coming back to life, and everybody needed hardware stores.
Gina Schaefer [00:05:31]:
And so it was a good idea at the absolute right time.
Celeste [00:05:35]:
Mhmm.
Gina Schaefer [00:05:35]:
And people started coming in from around the city, letter writing campaigns, phone calls, which was overwhelming and super exciting. And so about a year in, so 2,004, I was working at the cash register because we wore all the hats that we could in those days. And a gentleman came in, and he said, I have a property for lease across town near Georgetown University. Would you be interested in looking at it? And we went to look at it, and we signed a lease. I mean, it might have been a couple weeks later. It was very quick. And so we opened our second location 2 years later, and then we opened 1 a year for 10 years. And I shouldn't just say open.
Gina Schaefer [00:06:07]:
So over the years, we've purchased 5 from other owners, built 10 from scratch, including those first 3. Actually, the first four were built from scratch. 5, 6, first five. And then, we've had to close 2 that didn't work. So we were growing at a fairly fast clip. We had a great banking partner starting with that second location in National Cooperative Bank, and we started building really what our core values were gonna look like so that we could take up someone in the first location, have them manage the second, someone in the second location, have them manage the third. And all of that was wonderfully organic And even more to our story, and again, looking back in hindsight, how perfectly it worked out. Some of our first employees were coming from the Whitman Walker Addiction Services Program, which happened to be one of the only institutions in Logan Circle when we opened.
Gina Schaefer [00:06:56]:
Mhmm. And so folks were coming in, after their recovery meetings, and they needed a job. And I just started giving people jobs. And I gave you know, Shane will tell you, I gave him a job, and then he called Skippy and said, go see that lady at the hardware store who then told Brian, and I could track this. You know, it's like family lineage. And so we created core values so that folks who didn't have hardware or retail experience, particularly those in the these this recovery program, could grow with our team and become managers of the future locations.
Celeste [00:07:28]:
Yeah. And so interesting. I think every business owner would be on the same page as you is maybe you started with an idea that evolves over time, and things prove you wrong and other things prove you right. You know?
Gina Schaefer [00:07:38]:
Yep.
Celeste [00:07:38]:
You might have had questions or people may have question, why are you hiring certain individuals? But, clearly, it worked, and you were once again giving back to the community. I I think of that picture where it's as, you know, the path to success is kinda like this, you know, all over the place. It's not linear. So it's kind of, as they say, rolling with the punches and just going kind of being adaptable to this situation. So it seems like that's exactly what you all were doing. So I know we're kind of going quickly through this journey, but, at what point at some point, you know, you've built it, but at what point did you first start thinking about, wow. We've done this. This has been great.
Celeste [00:08:12]:
It's been successful. But I think I'm ready to maybe exit from this.
Gina Schaefer [00:08:17]:
I don't know if well, I think I really started thinking about it in 2016, very specifically because I wanted a sabbatical. And so in my brain, I could leave and come back, or I could just leave and that could be it. People people from the moment I opened had said, what's your exit strategy? But, you know, I was 30. I guess I was 33 when I opened that first location, which is not that young. But I had never opened a business before, and so I really didn't understand why at that point I needed to think about exit strategies. And hardware stores are very multigenerational. And so they're often just passed down through the generations, or they're given or sold to another family member. I didn't have any I don't have any children.
Gina Schaefer [00:08:55]:
I don't have any nieces or nephews of the age where they would be able to take over. And so I think part of why we didn't think about it is it wasn't right in front of our face. A lot of my friends who are taking over for their parents have known since they were born that if they wanted the family business, they were gonna get the family business. And so that was never a topic around our dinner table. But people did say to me in a lot on a lot of occasions, what's your exit strategy? And I think from the hardware perspective, same theme, people were nervous. Well, she doesn't have any kids. What's she gonna do? And around 2016, I was getting ready to roll off a 9 year tenure on the Ace Hardware board of directors, and I really wanted a sabbatical. And that sabbatical didn't work out, but it also just made me start thinking about why did I wanna get away? Where do I wanna go? What does that mean for the long term implications of the business? And so that planted the seed right there.
Gina Schaefer [00:09:45]:
That was really the genesis of it.
Celeste [00:09:46]:
Yeah. No. That makes sense. It's funny you talk about, you know, hardware stores being generational. I grew up in a tiny town in South Texas, and, I remember going to our local hardware store. It's kinda where you got everything. And I think it's still there, and it is definitely run by the same family that's had it for a long time. So, it it was a staple in the community, so I can see why that was the thought.
Celeste [00:10:09]:
And it it's also interesting that you mentioned because I think it's really important for our audience. It's something that in this series we've mentioned over and over. From the very beginning, even if you don't really know what it's gonna look like, you need to start thinking about that exit because you need to be building in a way that's gonna make that exit successful. Whatever it is, however it looks at that point, is making sure you have everything organized to do it. So I think that's that's such an important point, that you share. So, you know, everything that you've mentioned is is great. We've talked about this journey. I know we've gone through it quickly.
Celeste [00:10:42]:
You gave back to the community, and now you're here at this exit. And it's really the exit that we're gonna focus on today because it was an incredible thing you did. So let's kind of just transition to that. So one of the most intriguing aspects of your exit was how you did it, the decision to sell the business to your team. You created over a 130 co owners. So that's I mean, we I just keep there's a there's a pattern here. Right? It's you keep giving back and giving back. So kudos to you for being able to do that in the community that, you know, you started off with that maybe was, like I said, a little broken.
Celeste [00:11:20]:
What led you to do to take this unique approach in your exit?
Gina Schaefer [00:11:25]:
Well, this is what's so perfect because it was a full circle moment. So this is not a shameless plug for my book, but I tied a bow on it with this exit strategy. So I'm just gonna bring it up.
Celeste [00:11:33]:
Yeah.
Gina Schaefer [00:11:33]:
Absolutely. I I created Recovery Hardware because the nickname the the community nicknamed us Recovery Hardware because there were so many people in recovery from that community that we were hiring. One day, one of my teammates said, you know, the store has been nicknamed the the the main store. The main store has been named Recovery Hardware. And I thought, that's a great name for a book. And people have been asking me for years to write my story, and I thought, no one needs to read about a chick running a hardware store. Well, it turns out that's interesting to a lot of people. But to me, it was the stories of the people who helped me build the business that were the most interesting.
Gina Schaefer [00:12:06]:
So I started writing not knowing what the exit was gonna be, and it took me almost 2 years. And by the time I got to the last chapter, we had created the exit strategy. And so it was this beautiful bow on this story. And the reason that we created it, truly, remember what Logan Circle looked like when we first started the business. Mhmm. In 2020, the protests that were happening in the United States were starting right in front of my office, which is exactly where the riots had happened in the sixties. And the protesters were walking down 14th Street in front of our original store. And my team and I I mean, literally, at one point, my assistant thought I was gonna fall out the window because we were hanging signs.
Gina Schaefer [00:12:45]:
And, you know, we really just felt the solidarity with the things that the marchers wanted. They wanted generational wealth. They wanted equity building for people of color. They wanted gender equality. And here I was, the CEO of this traditionally male dominated, business. And so it really made my husband and I start thinking about what it is we could do to be part of the solution everyone was asking for. And we'd started doing all of our research, or we had already started at that point. Were we gonna sell to private equity? Were we gonna find a private buyer? You know, a lot of the hardware stores close.
Gina Schaefer [00:13:15]:
They don't look for anybody. They just lock the doors. We certainly didn't want that to be the case because, you know, we feel a lot of, responsibility to our neighborhoods and our team. We looked at worker owned co ops as an option, and then we heard about an ESOP. And the one nugget that we did not understand about an ESOP well, the one big nugget, I think, for us was that employees don't put any money in. They don't actually buy it. Mhmm. And so we couldn't understand how we were gonna sell our business to our team and just have everyone on the team be able to afford to to buy in, frankly.
Gina Schaefer [00:13:45]:
I mean, we just we really didn't know how it worked. And so we had researched all of those options. The protesters started the protest started in 2020. I met someone who understands ESOP's inside and out. He's an amazing, amazing mentor. And I called him one day, and I was like, you gotta help me figure this out. And by the time I got off the phone with him, we knew that was gonna be what we would do. That's incredible.
Celeste [00:14:05]:
Yeah. Yeah. Talk about a full circle moment with the protest coming back around. That's incredible. So, you know, as you so you have a mentor helping you structure it, but maybe we can go in a little bit more detail. Some of our audience may not be familiar with how an ESOP works. And it might it's incredibly intriguing because as you mentioned, you don't have to actually put money in as an employee, right, to be part of this model. So how did you structure this employee ownership model? And along the way, maybe what were some of the challenges that you had in implementing it? Maybe some of the things you would have done differently or could have improved upon now that, like you said, hindsight, you know, 2020.
Gina Schaefer [00:14:44]:
So, ESOPs are regulated by the Department of Labor, which I think works to everyone's advantage, to be honest. It adds a layer of complexity for sure. It adds a layer of expense for sure. Those are usually the 2 big challenges to forming an ESOP. But it's regulated because people in the past, as you can imagine, plan to sell their business to their employees. They overvalued it. They took all this money out of it, and they left the employees holding the bag of a business that wasn't worth anything on paper or anything in general. And so it is very heavily regulated.
Gina Schaefer [00:15:13]:
I still think of us as unicorns. There's about 7,000 ESOPs in the country now. And I think that it's been the oldest one that I've met, I believe, is about 50 years old. Publix grocery store in the south, they're mostly in the south, is one of the largest ESOPs in country. In fact, it's one of the largest ESOPs in the world. So, mostly because most of the world does not have the concept, although, Canada just passed some laws that'll allow, employee ownership trust to form, which is really great. So we realized what we needed to do and how to and and who who we needed to hire to do it. So there are trustee trustees that you hire, and I call them my my teammates' people.
Gina Schaefer [00:15:48]:
Right? He's their person. And then you hire a a consultant who helps with the valuation. The consultant creates a valuation for the business. My husband's a CFO. He created a valuation for the business working with our bank, and then the trustee creates a valuation for the business. And those three heads essentially put the papers together. We actually step back at that point. We're not involved in that negotiation, and everyone sees if the valuation aligns.
Gina Schaefer [00:16:11]:
And, you know, if you've been doing everything up to snuff, if you've been documenting everything, if you've been following all of the IRS guidelines, if you all have agreed on 4 times EBITDA, 6 times EBITDA, whatever your whatever you agree on as the term, your valuations should be pretty closely aligned. And that's exactly what we had happen. And so we settled on a sale price. You form, a trust, and the trust owns the business on behalf of the team. So, basically, the business bought us out on behalf of that trust. I I always wish that I had a circle diagram when I try and explain this because even 3 years in, I feel like I might complicate it. But we took a loan out from the bank, as the business. They paid us that chunk that we were selling out of that loan, and now the business is paying the loan back.
Gina Schaefer [00:17:00]:
The trust is paying the loan back. We've sold 30% so far, so we didn't wanna overburden the business with debt. We say we because I'm still the majority owner. We still have the an appetite for growth. We want the ESOP to get bigger because that just means more money for everybody. And so we're probably gonna sell it in 3 tranches, which is fairly common. There are fantastic tax implications. And I'm gonna back up for a second because this is interesting.
Gina Schaefer [00:17:24]:
You had hinted at how you plan for it. I am not the numbers person. I was definitely not smart enough to know this 21 years ago. But I had a, an older hardware retailer stop by to give me some advice. And he said, you should shut off your cash registers every night at 5 PM. And I was like, why would I do that? And he said, so you don't pay taxes on what you sell between 57. Now I know how ridiculous and illegal that sounds. At the time, I knew it sounded illegal, but I never thought about the future ramifications.
Gina Schaefer [00:17:55]:
And I did the math because I'm gonna use this statistic in a keynote that I'm giving in a couple weeks. If I had listened to that man when we did our final valuation, I would have had to have devalued my company by $73,000,000 in revenue
Celeste [00:18:09]:
Wow. Which is
Gina Schaefer [00:18:10]:
a lot of money.
Celeste [00:18:11]:
A lot of money. Yeah. Absolutely. Yeah.
Gina Schaefer [00:18:14]:
It was the dumbest advice ever. I mean, I think because you wanna have the end goal in mind, the end game. And if the end game is to sell your business for maximum value, you wanna make sure you've been maximum above board in how you're valuing it. And so we got to that valuation period, and we were aligned because we had done the right things for all of those years. And when we agreed on what the multiple of EBITDA should be, you know, with some wiggle room on others either side so the trustee and the the consultant could talk through the that stuff, We came up with a really good valuation. Now the benefit one of the big benefits of an ESOP are the tax benefits. And so the way that it was explained to me is that we would have had to have sold the business because people have said, once you've gotten more if you sold on the private market, once you've gotten first of all, I would have never sold it to a private equity company. I'm not embarrassed to say that.
Gina Schaefer [00:19:05]:
Once you've gotten more money if you sold it to a PE company, we would have had to sell it for 20% more because the tax implications for me as the seller, the employees as the new owners, and the business as the holder of this trust are enormous. So calculating those tax savings all along the route makes for me the wait for the whole payout worth it.
Celeste [00:19:30]:
Absolutely. So a few things I took from that. 1, choose your mentors wisely. Right?
Gina Schaefer [00:19:34]:
Because Exactly. Don't maybe he
Celeste [00:19:36]:
was more of an enemy. I don't know. At that point, you're, like, trying to derail you, but, don't take all the advice. But what you said is so important on the planning, doing things right, having things organized. We had a tax person, a CPA on one of our previous episodes, and that was her key thing is just, you know, keep things in order. It's so much easier to just kinda keep it in order, do it right, than have to go back, and now you have to clean up a mess that you left behind, that trail of a mess. So you were prepared at any point in time, really, if that exit opportunity came, and you were also you were in a position of power to make the choice of how you wanted to make your exit. Right? Because you didn't have to do you weren't forced to do anything.
Celeste [00:20:20]:
So I think that's important to take away too is you positioned it in a way that you wanted to do it. It wasn't because you hadn't done things right and now you needed the money or there was taxes due, things like that. So I'd also be interested to hear so as you're, you know, building out the the ESOP and the structure, like, how did you approach the employees' value? What was their initial reaction? You know, how what was their feedback on it?
Gina Schaefer [00:20:45]:
So, really, it was all over the place. One of the things, I actually I made a note on something that you sent me because I hadn't thought about it in a concise manner. And I think your question was, and and forgive me for jumping the gun, but the 3 things that you made your exit success that made your exit successful, which I think ties in perfectly with this question, research, curiosity, and communication. So that communication piece, when we decided we were gonna exit this way, we we've built a really strong corporate culture. It's a cohesive team in a lot of ways. I don't think we get it right all of the time. But if you at its roots, it's a mom and pop company, and the mom was leaving. That sounds really cheesy, but, that's the best way to describe it so that people understand what I'm talking about.
Gina Schaefer [00:21:29]:
And if mom abandons the family, things can fall apart. And I'd never thought I was the end all, be all, but I I knew based on conversations I would have with some of my teammates that this was gonna be challenging. So we hired a business coach who worked with my team and I for about 2 years on this transition. Now I'm not saying that it lessened all of the anxiety, but it certainly teed things up for everyone to know when I was leaving. And so we we announced the ESOP, and we announced it would be a 2 year, step down because part of sorry. I never even said this, but it's part of my part of the exit strategy for the business was me leaving as CEO. Mhmm. And so I needed to find a replacement for myself.
Gina Schaefer [00:22:07]:
And so that first day, though let me back up for a second. The first day that we announced it to the leadership team, which was about I guess there were probably 30 people in the room, The reactions were all over the place. Almost nobody in the room had ever heard of an ESOP. We had 2 people in the room who had worked at ESOPs before who were super excited about the fact that they were now gonna be at another one, which was really cool. I had 2 people, I think, literally broke down into tears because they thought that I was saying that I was leaving that day or that Mark and I were leaving that day. Of course, that wasn't the case, but they heard what they wanted to hear. And then there was just a whole lot of confusion. Mhmm.
Gina Schaefer [00:22:42]:
We we were fortunate. We were working with, One America company that was helping us with the transition. They're a a ESOPs are really a qualified retirement plan. So most people, if you think of them kind of like a 401 k, it makes more sense in their head. And One America manages 401ks and ESOPs. And so we had representatives from there with us the day we made the announcement. So, basically, I could do the rah rah. This is where we've come from.
Gina Schaefer [00:23:03]:
This is where we're going. And then experts could step in and really answer the nitty gritty questions, how you qualify, when you qualify, what does it mean. And then, we mounted a fairly comprehensive, FAQ page, landing page so that if the employees couldn't get ahold of one of us right away, they could go look there for questions and answers.
Celeste [00:23:25]:
And and so you said something once again really important to reiterate is that you were key to your business. So many business owners I just had a conversation this week with a financial adviser who's working with a very, successful construction company really led by one person. He is the key person in that company and has never even thought about that thought about it in that way. He's just growing a business, and he's done very well. And now he's at a point where if something was to happen to him, it would be incredibly detrimental to that business and his family who depends on that business. Right? So it's important for business owners to recognize their importance in the business, which is why we also talk about, you know, succession planning and thinking about that throughout the process. Another thing you mentioned was having that business coach. We talk about having experience, having a team the right team of advisers around you as you're getting to that point in time or that exit and even before because there's so many things that when you're in the business, you miss.
Celeste [00:24:24]:
It's emotional. Right? There's Yeah. It's there's so many parts of it that you ignore because you're focused on revenue and your employees and it's your baby. So so key that you all are able to do that without maybe even knowing that these were such instrumental things. You all did the right thing, which as we're getting to, you know, that through the story was what led to the success, the things that you kinda did and really kind of learned along the way. So we talked another thing just to kinda wrap up this section is the tax advantages that you mentioned before. I think business owners should weigh out, you know, the different options that are out there. Once again, if you've prepared yourself, if you have the right advisers, they can guide you around.
Celeste [00:25:08]:
Maybe I do wanna pay the tax debt. Maybe I don't. Maybe I need to go the private equity route or the private sale, but, it was interesting to hear that you, you know, you maybe explored it or looked at it minus the private equity, which I respect. This is a no judgment here.
Gina Schaefer [00:25:23]:
So I respect you. Opinionated, Celeste.
Celeste [00:25:25]:
Yeah. It's yeah. No. That's great. I love opinionated women because I'm one of them. You know? I was just telling somebody yesterday. I'm like, that is not an aggressive comment. That is a educational comment on my opinion.
Celeste [00:25:38]:
So I respect that. Absolutely. You know, weighing out the options is really important so that you have that that right team around you. So we we touched on this a little bit. You grew the business. You're in it. Now you're still part of it, which is great. Some people walk away from it completely.
Celeste [00:25:55]:
Right? They just, like, sell the business. Many times, we do see that the business owner is requested to to stay and kind of continue to lead for a few years. But we we talk about the numbers, and we talk about the documents. What we don't always talk about is this the human side of it, the emotion Yeah. Which I referenced right now. That tends to be ignored. People, you're so busy getting to that exit point that you don't think about, but what about after? Yeah. So I would do.
Celeste [00:26:23]:
Love to get your perspective on that. You know, you built this business from the literally from the ground up. You've nurtured it. How challenging was it to walk, you know, to not completely walk away, but to start to pass the baton? And how did you personally prepare for that?
Gina Schaefer [00:26:40]:
Well, you know, I have a lot of examples over the years of, again, again, my friends in hardware who were transitioning into the business, after their parents were exiting. And that, I really that was a front row seat to all of the emotion because it it resulted in fights. It it resulted in stress, particularly for the folks my generation that were ready to take over, but their parents weren't willing to let them take over. And so, I mean, I was grateful that I didn't have to live through that experience, but it also made me realize that regardless of how excited I was about the process, everyone on my team might not emotionally be in the same place. And so that was a really big deal. The other thing that I think is really cool for about ESOPs is that one of my mentors owns some hardware stores out West, and he decided to form his ESOP at 60 and end it at 70. And he did that because he knew he wasn't as active in the business anymore, but he wanted to still be relevant. So he wanted to go in and work every day.
Gina Schaefer [00:27:32]:
But he also wanted he and his wife between the ages of 60 70 to really benefit from the fruits of all of his labor. And so I don't know what his initial sale was, but it might have been a couple $1,000,000. And he got that money, and he was able to or is able to do all of the things with his wife that he wants to do while he continues to work part time, quarter time, whatever that is, until the sale is final. And so I think you can structure it in ways that allows your lifestyle to to work for what you wanna do after. And so I knew that I wanted to step down as CEO and not have an involvement. I mean, I think maybe it's ego. I couldn't I I I dabbled with, well, maybe I'll step down as CEO, and I'll ask if I could just do training because I think I'm pretty good at training. Or maybe I'll step down as CEO, and I'll do b to b stuff because I like sales.
Gina Schaefer [00:28:20]:
I mean, there's a lot of things that I really like to do. I also couldn't imagine being there and not being the CEO, and I think that was a really hard conversation I had with myself. 1, because I got to the point where I had this fantastic team doing a big chunk of the work around me. You know, I didn't have any specific deliverables. I was the the cheerleader and the corraller and the meeting planner. And so it was a good hard conversation with myself to figure out, like, you're still gonna be majority owner, but do you want to be involved? In fact, the new CEO and my husband, who's still the CFO, wanted to take me on a tour to see some spaces that they're looking at for new locations, and I love that part. I mean, that I walk the neighborhoods. I get super jazzed.
Gina Schaefer [00:28:59]:
And I was finally like, no. Like, I'm always gonna have an opinion. I'm always gonna feel like I could easily get sucked back in. I don't think I should go. And that was a really hard that was really hard for me to say because it's fun. I love it. I knew, though and maybe, again, this goes back to lessons that I had learned from some of my, associate or older like, my the parents of my my my generation. A lot of them didn't know what they wanted to do next, and I knew what I wanted to do next.
Gina Schaefer [00:29:27]:
And I feel like a lot of them signed up to build this business for life, and I just I've never done anything for life. I like to move houses every 6 years. I I travel, and I never go back to the same place. And so to say, oh, I'm gonna open this business and love it for 50 years, 40 years, I just didn't see it in my cards. It's not that I don't love it. I just couldn't imagine being there for that long. That answer your question?
Celeste [00:29:51]:
Yeah. No. Absolutely. No. It it no. It definitely does because it seems like there's roller coasters there. Right? It it wasn't just, you know, I'm so thrilled that I'm gonna, you know, pass this along. But I'm sure that there was a there was a lot of, I would call it, metrics or parts of this timeline in which you prepared for without knowing.
Celeste [00:30:13]:
Like, so maybe we can talk a little bit, and it's kind of backing up a little, but how did you start to pass that baton? I mean, at some point, you knew that you didn't wanna do it forever. And so how did you start to say, I need to prepare my team for when I'm not here? Like, how did you start to do that? Because that's a really hard thing for business owners to do.
Gina Schaefer [00:30:33]:
It's very hard. I mean, when we knew we were gonna form the ESOP, we started looking for a business coach. You know, there are touch points over the last 20 years where we've hired outside experts because we are not those people. I like to think of it as when I needed an adult in the room. Yeah. No matter how old I got, you know, you wanted the adult to come save you. So I realized, I guess, it was probably, well, 2020, 2021, 2020. I needed an adult in the room, and we decided it needed to be a business coach to work with myself and the team.
Gina Schaefer [00:31:02]:
So that transaction happened as smoothly as possible. And one of the things that we did with that that business coach, which was really the most beneficial, was a a Hogan assessment. Some people understand DISC scores Mhmm. Myers Briggs in a in a smaller way. But we walked our leadership team, and it's about 8 of us, I guess, about 8, through the Hogan assessment. And then we broke it down by the skill sets that we were lacking or would lack if I left. And I really didn't think we would be lacking. There was a visionary component that most many CEOs have that I knew we would lose, but I have the ability to roll with change unlike anybody else on the team, and we didn't know that.
Gina Schaefer [00:31:43]:
I certainly didn't know that. And I remember Josh, the business coach, lining us up in this conference room. And he would say, in this metric, Gina's a 3 and Mark's a 4 and Will is a 5, and we would be lined up, you know, in a fairly cohesive pattern down the the conference room. Well, we got to the metric of change, and I was, I'm not lying, at one end of the conference room, and the next closest person to me was 3 quarters of the way down. And he looked at this line, he goes, you can't leave. Like, you have to have someone on your team who can drive change, emotionally handle change.
Celeste [00:32:16]:
I was like, no. Yeah. What are we gonna do?
Gina Schaefer [00:32:21]:
But it was a huge eye opener for us. So that meant that we had to find a CEO to replace me who could really handle change. And I would say the most fortuitous thing was already right in front of us. Unfortunately, we put 2 and 2 together, but we ultimately ended up buying a store in Fairfax, Virginia that was owned by our friend Craig Smith, who had owned that store for, I think, about 10 years. He grew up in the hardware business with his family, but he owned this one by himself, for several years. And I we took him to lunch. Mark and I took him to lunch, and I said, we're selling the business to the team. We think he would be a really great replacement for me.
Gina Schaefer [00:32:58]:
We'd like to talk about that more. Are you interested? And I'm not even sure if we got out of lunch before he said, I'm absolutely interested, which is fantastic. Mhmm. He had already worked with our leadership team in a variety of ways, so they already knew him. So they weren't gonna be scared of this, you know, new person. He knew them too, so he wasn't gonna be scared of walking into a brand new team that might, you know, distrust him or whatever. And then we had him take the Hogan assessment too, and he and he had to pass that change piece. Otherwise, I don't know what we would have done.
Gina Schaefer [00:33:27]:
And, really, he was the perfect candidate. And so took about a year to make that transition happen, but his store came on board as part of our ESOP because we had already formed it at that point. He came on as CEO. And then really to get to the heart of your answer, we spent about he wanted me to stay for a year, and I committed to 6 months. And so I stayed for 6 months in an overlap, situation. And then, I mean, now I'm just you know, I'm a text away if he needs me. So
Celeste [00:33:52]:
Yeah. That's great. Yeah. How I that's incredible about that Hogan assessment. And, I'm sure even recognizing that about yourself, sometimes when we go through these, you're like, that's not me, and you're like, no. That really is me. We are kindred spirits. You know? I get bored with things all the time.
Celeste [00:34:08]:
I told my husband a long time ago when we got married, I said, I knew you were the one because I wasn't bored of you. Like, you know so I get it. Like, you kind of have to be adaptable, when you're in leadership roles or running a business because every day is a new adventure. I feel you have to be able to just go with the flow and change your perspective, admit when you're wrong, and keep going forward. Right? So that's incredible that you found somebody that also had those, characteristics like you. Yeah. So we've talked about the journey, the exit, the why, how you did it. So you've learned a lot through this process, and, clearly, you share this back with business owners and other people through your books and this, the the speaking that you do.
Celeste [00:34:54]:
So it's incredible that you can still do that, that you can take what you've learned. And another thing I've noticed in everything you've said is that you learned. Like, you heard somebody say this, and you're like, that's a good idea. You saw somebody else do this wrong. I'm not gonna do it that way. You know? No. I don't wanna break the law maybe. You know? And so so it's I think that's important in itself, but we work with a lot of business owners that I absolutely love.
Celeste [00:35:19]:
So all my clients, you're great. However, many of them are incredibly stubborn. Yeah. They're they're immortal, first of all. We're, you know, in the insurance space as well, and so they're never gonna die. They're right. It's their business that has to be done their way. And Yeah.
Celeste [00:35:34]:
Once again, my dad's a business owner. I've been, you know, an entrepreneur, and I I understand where they're coming from. But what have you seen business owners? Like, what are some of the mistakes you've seen them make in these exits maybe in part because of some of that stubbornness that comes with being a business owner?
Gina Schaefer [00:35:52]:
I I love this question. I I had a teammate years ago who said, Gina, do you keep opening new stores so that you can fix your screw ups from the last one?
Celeste [00:35:59]:
I think they are true. Yeah.
Gina Schaefer [00:36:02]:
And I don't you know, you don't get a do over. When you sell your business, you sold your business. You know, 99.9% of the time, there are situations where people buy them back. But, I don't get to do this again unless I start another business to sell. And so I I do hope that I can instruct people on some of the pitfalls. And I think for us, they weren't necessarily pitfalls as just ways that maybe we could have strengthened the communication or the biggest pitfall really is not know and it's not even a pitfall. It's not fair. It's not knowing what your options are.
Gina Schaefer [00:36:28]:
When you throw in employee worker owned co ops and ESOPs, most people have never heard of those two things, so they can't even evaluate them as options for their sale. And so that's not really a pitfall. That's just an unfortunate reality. And so part of what I hope to be able to do with all of these amazing folks at ESOPs that I've now met is talk about it more. This you know, the the the timing is ripe. Everyone's talking about the silver tsunami, and the baby boomers are retiring in waves. Private equity is is gobbling up you know, the veterinary clinic has gone or rolled up. The, like, all of the spots have rolled up.
Gina Schaefer [00:37:04]:
Like, this is the time for this kind of stuff to happen. And so I just I think the pitfall really is doing it too fast, not including your team, and not knowing what all of the options are.
Celeste [00:37:15]:
Yeah. Great Great point. Once again, going back to being informed, having the right advisers for yourself. So $1,000,000 question here. If you were gonna go back to the very beginning of your journey, what advice would you give yourself today?
Gina Schaefer [00:37:30]:
This is my least favorite question, and I can lie to you.
Celeste [00:37:33]:
I'm sure it's hard. Yeah. Yeah.
Gina Schaefer [00:37:35]:
Because I I mean, my advice might be to do everything the same, and that sounds super cocky, but this is why I mean this. I was so dumb, Celeste, and I shouldn't use dumb, I should use naive or inexperienced, that I didn't know what I didn't know. I didn't know what to do next. I didn't know what was coming around the corner, which was kinda great because I didn't foresee the challenges that we were gonna have and stress about them before I had that challenge. And so, honestly, my advice my advice to everybody is don't stress about how you would have done it differently. Learn from it. Keep going. I mean, I did have the benefit of opening multiple brick and mortar locations.
Gina Schaefer [00:38:10]:
So if I did something that didn't work when I opened 1, I could change it. You better believe that even though I changed that one thing, I still made 5 more mistakes.
Celeste [00:38:18]:
Absolutely. You know? Yeah.
Gina Schaefer [00:38:20]:
I mean, I hear myself answering this question, and I feel like I sound super conceited.
Celeste [00:38:23]:
No. Not at all.
Gina Schaefer [00:38:24]:
Think that being naive in the beginning really got us to where we got to.
Celeste [00:38:29]:
But but, see, you learned from your mistakes. Right? It's the whole being adaptable. It doesn't have to be the the same way just because it's always been that way. So Right. I was filling out this, like, interview questions yesterday, and and one of the questions is, like, what are some of the best, lessons that you've gotten in life? And one of the things my dad would always tell me is, I'm okay if you fail. I mean, just not okay if you fail and you don't learn from it. So as long as you learn from it, it's gonna be fine. And so, I mean, that's something I've always thought of because every day, you know, you don't know what's gonna happen.
Celeste [00:39:00]:
But if you're learning from it, then you're growing and you can continue to do it better. So I I don't think your answer is cocky at all because you really don't know what tomorrow's gonna bring, and you just have to be adaptable and keep moving forward. Now after your exit, you've done some incredible amazing things, and I absolutely want for our audience to hear about that. So tell me tell them more about, you know, what are what are you doing now? What are some of these amazing opportunities that have come after your exit? And because of all the experience you gained.
Gina Schaefer [00:39:30]:
I've always been very curious, which is one of the I mean, maybe that could have been an answer to your question is, like, just even be more curious. And so over the years, I realized that I was hiring what I called nontraditional teachers, people who had been homeless. One of my favorite long term teammates had been a drug dealer, people who were in some sort of recovery, which all of that led to writing the book. And then I realized that what I really wanted to do with their permission was tell those stories because I wanted to hopefully inspire other business owners to really think outside of the box in hiring, which was interesting for me because I think retailers or business owners get stuck in the box that is our 4 walls. If you're not just an ecommerce business, you I literally walked into 4 walls every day, and I could have been stuck there. And so I, I signed up to take a 6 month public speaking course with a company called Heroic Public Speaking in Lambertville, New Jersey, world class organization. I would say that that experience probably changed my life and gave me my first formal speaking practice since high school and knew that once I stepped down as CEO, I wanted to do that in a much bigger way because I want to inspire other business owners. I get asked a lot to speak to groups of women who are in nontraditional fields.
Gina Schaefer [00:40:42]:
One of my favorite events 2 years ago was speaking to a group of female auto mechanics. I mean, you just don't walk into a room like that every day. The next one was a group of women who were engineers. So I'm I'm just hoping that I can build that speaking career, telling the stories of this amazing team of nontraditional teachers that we worked with over the years, many of whom are still owners now or who retired as owners, which is really cool, and then, hopefully hopefully, inspire some audiences to do some different things.
Celeste [00:41:09]:
That's incredible. And you wouldn't have had those opportunities if you didn't have all those lessons learned through being a business owner. Right. So once again, you're taking what you've learned and using it to continue doing the things that you enjoy. Regina, this has been it it's really you know, we talk a lot in this podcast about just general business planning and all the technical aspects of it, but hearing it from you, who's lived dead, who I'm sure there were ups, downs, roller coasters, there's the challenges, the triumphs, but seeing how you went through the journey, how you made your decision, you know, how the exit was for you and kind of what you're doing after now as well, it's all really great for others to learn from your experience and see that there is, you know, that rainbow on the other side. You can let go. It's gonna be okay because it's tough. I promise.
Celeste [00:42:00]:
Yeah. As long as you use, you know, what you've learned wisely as well. So you can always use it. And I think also a lot of what you've done is is, I know it's a business, but it's also selfless in the sense of who you hired, and now you're giving back to a community that really needs that information. We started this podcast because there was so much misinformation on what we do, and I'm sure a lot of those women, like the auto mechanics engineers, they're just possibly don't have access or don't know who to go to for that information. So having somebody like you, a mentor in itself, somebody that they can look and say, well, I look like that person. That's so helpful for them to have that. So thank you so much.
Celeste [00:42:40]:
We really appreciate you being on today sharing your story. It's it's very much an incredible journey. Kudos to you for everything you've done, through the business building and the exit. We appreciate you being here, and I know our audience is really gonna benefit from this.
Gina Schaefer [00:42:54]:
Thank you.
Celeste [00:42:56]:
For our audience, if you'd like to connect with Gina, we're going to include her contact information in our show notes along with some other helpful links and resources. And if you're considering exiting your business, remember, it's never too early to start planning. Reach out to those experienced advisors that can guide you through this very complex process. And don't forget to tune in to our next episode, which will be the last one in this business planning series. It'll be focused on post sale planning. So you sold your business. You have more money in your pocket. Maybe more money than you've ever had before.
Celeste [00:43:31]:
But now what? So we are gonna be focusing on some post sale strategies that are not only gonna help make that exit much more successful, but also help you mitigate taxes. So definitely an episode you don't wanna miss. If you enjoyed what we shared today, please make sure to like, subscribe, and share our podcast. And as always, thank you so much for joining us for another episode of Planning Reimagined, where your wealth journey meets our expert insights. We'll see you in the next episode. Thanks for listening. Don't forget to like and subscribe, and please be sure to follow on your favorite podcast player. To connect with us, you can email us at hello at robinglenn dot com or schedule some time with us via the link in the show notes.
Celeste [00:44:15]:
You can also find us on Instagram and TikTok at hello robinglenn.
