July 23, 2024 • 42 mins
Welcome to the "Show Me The Way" podcast with David Seitter
In the landmark 50th episode of "Show Me the Way," Dave takes his listeners on an enlightening journey into the intricate world of business succession planning. This special international edition features Nicholas Rivera, Cofounder of Bristol Consultores in Colombia, illuminating the unique challenges and strategies involved in transferring family-owned businesses across generations and borders.
Ep. 50 — International Business Insider with Nicolas RiveraNicholas Rivera, born and raised in Bogota, Colombia, began his career in finance at Sergio Arboleda University. His early experiences as an investment banker and management consultant laid the foundation for his expertise in business strategy, growth, and financing. By 2020, Rivera co-founded Bristol Consultores, focusing on helping struggling businesses navigate the challenges posed by the COVID-19 pandemic. A key aspect of Bristol Consultores' work involves assisting older business owners, particularly Hispanic families, in creating viable succession plans.
The Importance of Emotional Intelligence in Business TransfersOne of the standout points in Rivera’s approach is the emphasis on emotional intelligence. He highlights that the most significant pitfalls in business transitions often stem from emotional rather than financial or technical issues. Rivera's experiences reveal that the emotional handling of business owners and their families is crucial for a successful transition.
Key Emotional Challenges- Expectations vs. Reality: Often, the expectations of older business owners about the value of their company diverge significantly from market reality. Setting realistic expectations with both the founders and their children is paramount.
- Emotional Attachment: Many business owners see their companies as extensions of themselves and struggle to let go. Rivera discusses strategies to keep the founders involved, such as maintaining a role on the board, which can help mitigate the emotional impact of transitioning leadership to their children.
Rivera shares compelling anecdotes that illustrate the emotional and financial dynamics of these transitions. One notable example involves a company that had been losing money for 11 years. A heartfelt but harsh outburst from the founder's son during a tense meeting underscored the deep emotional stakes involved. Through strategic restructuring and setting realistic expectations, Rivera’s team managed to turn the company around, securing a win-win situation for both the founder and the new CEO.
Guidelines for FoundersRivera provides three crucial pieces of advice for parents looking to transition their business to their children:
- Be Realistic: Treat your children as investors, not just as family members inheriting a business. Set and communicate clear and realistic expectations.
- Let Go: Once you have transitioned the business, avoid interfering in daily operations. Trust your successors to lead.
- Enjoy Life: Use this transition as an opportunity to explore personal interests that you may have set aside during your active business years.
A recurring theme is the reluctance of the next generation to take over family businesses, often seeing it as a source of struggle rather than opportunity. Rivera addresses this by emphasizing that business can and should be enjoyable. By redefining the role of the next generation and providing them with more substantial decision-making power, many potential conflicts can be alleviated.
Rivera's insights reveal that the successful succession of family businesses requires a blend of financial acumen and emotional intelligence. His methodology, which combines restructuring, realistic expectations, and preserving family harmony, has proven effective both in Colombi
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Dave (00:00):
Show me the way episode 50, the international insider.
And this episode kids, wetalk with Nicholas Rivera of
Bristol consul Torres Columbia.
Hey, ladies and gentlemen, you're goingto really be excited by this podcast.
Nicholas Rivera about hisexperiences in helping families.
Here's really somethingthat I found fantastic.
(00:24):
I, I learned so much from, from himthat even though he's got all the
pedigree, all the background, all thefinancial information, the psychology,
the emotional handling that he bringsto the table to deal with families,
specifically Hispanic families.
Is something you just don'tget from a lot of consultants.
(00:47):
This guy obviously has been workingwith a lot of people a long time.
He's got to be a very known commodityway beyond Columbia, but through
all of Latin America, he workswith folks in the United States.
It is refreshing.
It is invigorating.
It is, it has given me energy as youcan tell in my voice, please stay
(01:08):
tuned, listen to the whole thingand listen to the punchline, the top
three, Items that he's going to leavefor you at the end of the podcast.
This is going to be great.
Welcome
(01:30):
to show me the way a podcastpresented by Spencer Fain,
LLP about business succession,planning the merger and acquisition
experience and successful exits.
I am your host, Dave Sider.
Okay, kids, joining me ontoday's show is Nicholas Rivera
of Bristol Casatores, Colombia.
We are going international forthe first time on this podcast.
(01:54):
Thank you so much, Nicholas.
Nicholas deals with what we callin the trade, international trade.
Insider transfers.
That's where you're transferringit from, more likely than not, one
family member to another, vis a vis.
It could be a son, a daughter, couldbe employees, but primarily families.
And he has an interesting twist,because for me, I am completely
(02:18):
ignorant on how it's done.
In any country outsideof the United States.
So this is going to be personallyexciting and fulfilling.
Nicholas counsels many,many family businesses.
Nicholas, welcome to the show.
Nicolas Rivera (02:33):
Well, they thank you very much for inviting me.
Very proud to be here.
Very proud to be your first international.
And I'm also very interested incontributing to your community
about our experience in dealing withbusiness transfers outside of the U.
S.
Dave (02:51):
Ladies and gentlemen, did I steer you down the right row with this guy?
He is the real deal, butlet's start at the beginning.
Nicholas, I really wantto have all my guests.
Kind of give a background so thatpeople can identify with you in
your early business experience.
Were you born and raised in Bogota?
Nicolas Rivera (03:09):
Yes.
Yes.
I've been born and raised in Bogota.
I've lived here all my life.
I studied finance in the Sergio ArboledaUniversity here in Bogota, Colombia.
That's my area of expertise.
When I started back in 2001, I startedas an investment banker associate, and
(03:34):
then I had the possibility of advisingsome M& A transactions here in Colombia.
From there, I jumped tomanagement consulting.
That's something I did fromaround 2003 all the way to 2007.
From there, I not only deal with m and as,I dealt with mostly strategy and growth
(04:01):
and financing issues in the companies,but I also had to deal with some.
Aspects of from there, I just took acompletely different road and I started
my inroads in investing and that was 2007.
(04:22):
I started working mainly with US markets.
Um, that was all the way up to 2015when I decided that what I've learned
investing, and I'm going to make pausehere, what I learned investing is the
most difficult part of investing isthe emotional part, not the technical
(04:46):
part, it's not the fundamentals.
It's, it's getting it together when you'redoing it and when you're losing money.
And I had to study a lot about how peoplefeel when they're investing and what
people mess up when they're investing.
Yes.
And that gave me quite a uniqueperspective on how people who are
(05:07):
responsible for taking decisionsand huge amounts of money feel.
Because that's something that peopledon't think about it that much.
I mean, everybody thinks about the,the, the, the hard stuff, but nobody
thinks about how people are feeling.
And when you go back and you see wheremistakes are made is mostly because
(05:28):
some feelings betrayed someone, whetherit was rage, whether it was envy,
whether it was extreme happiness.
Something happens and people messup when they invest or when they
take huge decisions with theircompanies, or when they are thinking
about selling their business.
(05:49):
And that's something that Ibrought from the investment world.
And that allowed me then in 2020, whenwith my current partner, who is also an
attorney, we decided to start a businessthat was Bristol Consultores Colombia.
Yeah.
Which was focused in the beginningin helping struggling business
(06:11):
here in Colombia due to pandemic.
The thing is that when we startedthat, what we found was that a lot
of business that were struggling werealso businesses where the founders
were about 60 to 75 years old.
And they were facing a very complicatedissue or was that they could die
(06:34):
due to COVID and some of them didn'thave a plan, didn't have a plan to
do something with their business.
Some of them had kidswho didn't have any idea.
What to do with their parents companiesand some other kids that didn't want it
to do anything with the parent companies.
So we decided to design a methodologyto help this struggle in business.
(06:59):
And one part that was helpingthese business owners.
To be able to transfer theirbusinesses to their offspring
with the least amount of problems.
And that's where the feelings issuecame in hand because most of the
problems that we found were not.
(07:19):
Again, in the hard stuff.
We're not in the numbers.
We're not in the fact that thebusiness was or was not profitable.
What's in the fact that how they felttheir son, their daughter failed regarding
the business, how the founder failed,how he was going to be displaced.
He was going to be forgotten.
(07:40):
Nobody was going to listen to himanymore or listen to her anymore.
That was the big issues whenit came to business transfers,
uh, between family members.
So that's where we got during the lastfour years, a lot, a lot of experience
dealing with these kinds of issues,dealing with the fact that sometimes.
(08:00):
Family relations are struggling beforethey try to make the transaction
and how that affects everything.
And that's something that I think it'svery important, not only in Colombia,
because I read an article the otherday and I saw this struggle of boomers
who are business owners in the States.
(08:21):
And Whose kids are not willingto take their businesses.
So that's, I think that'sa global issue now.
Dave (08:29):
I think we are brothers from another mother here, Nicholas,
because you're reading from my script.
And I'm going to say for three reasons,which is, it's interesting that this goes
to prove that in the world, we're allabout, we're all about the same people.
You know, I don't know howwell that works, but we're
(08:49):
all really one in the same.
I am really big about dealing withthe emotional side of all of this.
I, it's easy at some level, Ishouldn't say easy, but you can
sit down and figure out the, theeconomics, the financial side.
Of a transaction, you can analyze todeath, but at the end of the day, all
(09:10):
decisions are emotional, all decisions,and I just, that's something that's
very, very difficult for people.
One of the chapters in the The book,I write about this extensively,
and it sounds like you're likeme, I really don't want people to
struggle with the emotional side.
Because it is, it is notsomething that's taught.
(09:31):
You go to school to learn numbers or lawor something, but they don't teach this
part of it, and it's very, very difficult.
And you're right.
I, uh, please check my numbers,but I think sometime around 2050,
35 trillion is changing hands.
And most of it, I think, isprobably going to go from one family
(09:52):
member to another, or the ownerof a company to its employees.
And in fact, I usually start,if I'm asked to do strategy,
I usually start with saying,shouldn't we talk to the employees?
They may be your best source.
Now, granted, individually, they maynot have The money, but through ESOPs,
(10:12):
stock option plans, through promissorynotes, through any number of things.
There could be a way to make things work.
So, let's, let's go to this now.
You're dealing with, it sounds likeprimarily families or closely held
companies, dealing with the transfer.
What does your first meeting look like?
Kind of walk us through that.
Nicolas Rivera (10:34):
Well, you show Luna.
When a founder wants to sell ortransfer his business and they call
us, usually the expectations that theyhave for the first meeting are wide,
far away from what they really need.
That's what we have found.
Dave (10:53):
Yes, but drill down on that Nicholas, drill down.
I agree, I know what that means, but yeah.
I'm going to, I'm going to drill down.
So for
Nicolas Rivera (10:59):
example, sometimes they, this is, this is a case that I love.
It was the father trying tosell the company to his son.
They were trying to define a value.
So the son called a consulting firmto make the valuation of the company.
The consultant firm comes withsomething around minus 3 million.
(11:25):
That was about it.
Dave (11:28):
Thank you so much.
You can imagine what the,
Nicolas Rivera (11:32):
what, what, what the father felt when, when it's, when
the son came up with this number,it's actually a very good, good
company nowadays, but what, what wehave found is that the expectations
that the founder regarding value.
Are always very, very far awayfrom what market value actually is.
(11:54):
And having this conversation with astranger is hard enough, but having
it with your kids, I'm, I'm, I'm notvery familiar with the employee case,
so I won't go in there, but I guessthat if you're having this conversation
with one of your employees who is asubordinate, it's going to be even harder.
(12:16):
But when you're having it with yourkids, the thing is that you have to set
expectations in a realistic way, and youhave to make them both understand that
it's in both their own best interest.
To be able to come up with somethingthat's reasonable, reasonable for
(12:36):
everybody in that case, for example,when we go in that first meeting
with a customer, we try to understandwhy is that happening in that?
Just let's give you an example.
If you're talking with somebodywho is 60 and he wants to go
out, he wants to enjoy life.
(12:56):
He wants to buy a boat, he wants toplay golf, whatever, it's not the
same thing as when you're talkingwith someone who's 75, who cannot work
anymore, who maybe has early onsetAlzheimer's or something like that.
Because whether it's your son, a stranger,or your employees, they're going to notice
(13:17):
that you are in a state of weakness.
If you're 75, you're trying to exceedyour So what we're trying is to go
in the meeting and try to set theexpectations of everybody so that
everybody walks with a happy face.
This is Tom.
So even after the transaction, evenif it goes sour, they still got to
go to Christmas with one another.
(13:40):
Exactly.
So you're not only tryingto make the deal work.
You need to keep the family togetherand everything has to be functional,
even after the deal goes again, becausecompanies at the end end up going
where the new owner wants them to go.
So sometimes the, and it's veryusual and here in Columbia, and we've
(14:05):
seen that also in the States, when acompany is run by somebody who's 70
years old, And it's a small company,let's say five to 10 million revenue.
Usually they have a very limited setof customers, very loyal customers,
but a very limited set of customers
Dave (14:24):
who are
Nicolas Rivera (14:25):
usually providing most of the income.
So when the son shows up and takes thebusiness, he can double, triple, quadruple
the size of the business very easily.
So evaluation over the cash flow of thosecustomers is not really an indicative
of what the business is going to beable to make with a new owner in charge.
(14:48):
So when you try to make somethingthat, allows current owner to fulfill
a good transaction to make a good deal.
Sometimes they, they want to sell most ofthe company, but not all of the company.
And for example, they say, I stillwant to be able to say something.
(15:11):
This is, this is the company I found it.
So I want to be able to saysomething every now and then.
Dave (15:17):
And you let, and they'll listen at the same time.
I want to say somethingand you will listen to me.
It's a two step analysis.
Yeah, yeah, yeah, yeah, yeah, yeah, that's
Nicolas Rivera (15:26):
right.
So what we usually do is the childrentake most of the stock in the company.
Dave (15:34):
Right.
Nicolas Rivera (15:34):
Sometimes they have to pay it up front, sometimes they
pay it over time, five years mostly.
And what we have found is that weallow the previous owner, the founder,
to remain as chairman of the board.
And we create, not all these companieshave a board of directors because
(15:54):
they're privately held companies,mostly LLCs and stuff like that.
So they don't have a board, butwe establish a board and in that
board, the founder can go and givehis opinions every now and then.
And that helps a lot withthe transition because.
One of the issues, I guess that'sin some of your questions, but I'm
going to move forward with this.
(16:15):
No, go ahead.
Please.
One of the main issues regarding foundersis that some of them think that their
companies are their personal checkbooks.
Dave (16:27):
You're just, you're hitting on, You're hitting on all, all the
things, Nicholas, you know, allthe things that I talk about, only
you're, yeah, this is wonderful.
It really is.
Please continue, I apologize.
Nicolas Rivera (16:41):
Don't worry, it's so, what happens then, it's that
you, you put your, your son as a CEO.
And you tell him he's the CEO,and he believes he's the CEO.
But then one day you decide youwant to buy a condo in Boca Raton.
So you take a million dollars fromthe company and buy your condo.
And now your son is strugglingbecause he doesn't have money
(17:05):
to make rent or to make payroll.
So that generates a lotof tension between them.
And I've seen kids just quitting ontheir, on their parents because they do
stuff like, so when you remove the, thefounder from the executive position, but
you leave it in a position where he can'ttouch the money, but he can still give
(17:29):
contributions and he can still help thecompany from a very wise perspective.
The companies work much betterthan when you just leave the
chip with the, with the company.
And we found that that's a very, verygood way to make the whole thing work and
allow the company and the family to staytogether because they both can have what
(17:54):
they need, not what they think they want.
Sometimes they think they want to sell.
Yeah, they want to sell, but you don'treally need to sell because if you sell
and you go away in your retirement plan,I'll bet you'll be bored in three months.
Yeah.
This is very active peoplewho've been working 12, 15 hours
(18:15):
a day for 15, 20, 30 years.
You can't just go andretire and play golf.
That's not going to work.
So when you allow them to be present andcontribute to the company, that, that,
that gives them a lot of fulfillment.
And that also helps the children becauseall that wisdom, it's going to take time.
(18:35):
Decades for them to achieve and that's,that's a very, a very good way in which
we have been able to make this work in,in the companies we've been advising.
Dave (18:46):
You're just, you're hitting on every single point that I
think about and talk about.
Without exception, I just,this is fantastic to have
this kind of a conversation.
I'm, I'm sure we lived in the samehousehold somewhere or taught, or
was taught the same sort of, samesort of rules or lessons of the road.
(19:09):
You know, it, it, In dealing withfamilies, and I, you know, I think
you're right, that you can't let someonewho's retiring just walk out the door.
It won't work emotionally or mentally.
It just, it's going to be dysfunctional.
But you also want to havetime to transition all of the
clients and customers over.
(19:31):
There is, what I also find is, andit's very difficult, is, because it
happened with a couple of clients,To say to them the nice way, never
refer to the people in the C suite asyour sons and daughters don't do it
because it devalues or undermines theirsignificance and you know, whether or
not you're right or wrong is irrelevant.
(19:52):
You want to make sure thateverything is at a place where people
feel respected and appreciated.
Now that we're getting older, we'reprobably talking like old fogies, so
to speak, but it's an important part.
And it is important to keep them in theC Suite or on the board and have them
involved in decisions, which is not thesame thing as giving them check writing
(20:14):
authority on anything going forward.
It's all got to be negotiated.
You are, you are so much rightdown the middle of the thought
process that I have as well.
Can you, with obviously not using anynames, can you share some specific,
um, Memories that you've had orexperiences that were very positive,
(20:34):
some of the things that you've doneand results that you've created.
I know the audience wouldlike to know about it.
Nicolas Rivera (20:39):
Well, yeah.
So what comes to my mind is this company.
This was a company that startedlosing money after the 2008 crisis.
They, they started to lose moneyin 2009 and that went for 11 years.
When they came to us, itwas 11 years losing money.
(21:01):
They have the, the, the father, thefounder had a very, very generous fund.
Family fund that family fund have beengiving money to the company for all those
years, but by the time we arrived, thephone had depleted 90 percent of its
value and that generated a lot, a lotof discussions in the family, because
(21:24):
it is your fault, it is your fault.
The father told to the kid, the kidtold for the father, it is your fault.
If you didn't take that decision backin 2014, if you didn't do that back
in 2017, if you have paid attentionin back in 2013, it was a mess.
And we were in a meeting with, withboth the father and the son, and the
(21:45):
son was desperate and he yells in frontof everybody, we're sitting in the,
in the, and the, and the son yells tothe father, Luke, the best deal that
we can make here on this table today.
Is that you die.
Oh, wow.
So that was, that was hard.
Yeah.
Dave (22:03):
Yep.
Nicolas Rivera (22:03):
That was hard.
Then it was, it was rough, but weunderstood that it was emotional.
Everything was coming from emotion.
So what we did with that company wasrestructure the whole thing commercially.
Operationally and then politically,because we understood that if the
(22:26):
father and the son were strugglingfor money, they were never going
to be able to be in a family.
Cordial relationship.
So we managed to get the, the,the company out of the red.
That was by 2021.
Wow.
They started making money out there.
(22:48):
Yeah.
Yeah.
It was, it was what needed to be fixedwas really something that unfortunately
they haven't been able to see, but whenwe applied our method, It changed right
away and it was visible for everybodywhat the, what the main issue was.
I'm not going to discuss the details,but when we managed to make the company
(23:08):
make some money, it was not big money.
It was like a 5 percent operatingprofit by the, by the time, but
they, they were making money.
Right.
So we, we, we restarted the conversation.
Not from the place of fear andfrom the place of rage that we
had last time, but from calmness.
(23:28):
Everybody was calm.
Everybody understoodwhat needed to be done.
And even though that company wasn'tthat valuable at the moment, I mean,
if you value that, I guess you'regoing to get another paycheck.
5 million in the red, something like that.
So what we did was we set up a way inwhich the founder could still make some
(23:49):
money out of the profits of the company.
Going forward, we secured a pension forhim and his wife was the mother of the,
of the new CEO and the new CEO boughtthe company in three years and secure
his His father and his mother's retired.
(24:11):
That's great.
And that, I think it wasa great victory for them.
Good for you.
Because, because they, itallowed the company to grow.
It allowed the company to thrive.
And nowadays it's, it's a very, verysuccessful company in this area.
Wow.
Dave (24:28):
You got to write a, you got to write a book on that one.
I'm serious.
You got to write a
Nicolas Rivera (24:31):
book
Dave (24:32):
on that.
Nicolas Rivera (24:33):
I will.
I have another one.
In this case, please, please, please.
In this case, the company was notas badly met as badly financially,
but these are two brothers.
They, they got thecompany from their father.
They also are in charge of alltheir, their, their parents expenses.
(24:53):
And they also have to contribute to thefamily fund, but these two brothers.
are the greatest example we haveof teamwork within families,
because that's another issue.
When you have brothers running a familytogether, you always have conflict.
Because it's difficult for some brothersto accept that another brother is
(25:17):
going to lead mostly if the leaderis not the older brother, right?
Because family hierarchiesstart mixing up with company.
So if you do not get that straightfrom the beginning, you're
going to have conflict, right?
(25:38):
So in this company, the CEO was theyounger brother and the CFO was the.
Older sister.
And they were having a lot of issuesbecause all throughout their life, the
older sister has been the leader inthe family, but now the company has a
leader and it's the younger brother.
And that led us to create a rulebook for that family so that they
(26:04):
could separate somehow the wayin which family relationships.
are managed from the way companyrelationships are managed.
And that's something that hasto do with what you just said.
When you're inside the company,you cannot be broader CFO.
Or brother CTO or sister CMO, you have tobe the CEO, you have to be the CMO, you
(26:30):
have to be, you have to be professional.
If you can manage to be professionaland let go of anything that comes
outside of that, and that's familyrelationships and everything, you're
going to have a prosperous company.
And if your company prospers.
Your family process.
Yes, yes.
And if everybody, everybody'shappy with that happens.
Yes.
(26:50):
And usually if everybody in the familyis, is in a state of prosperity,
family struggles start to decrease.
, Dave: it's, it's amazing when there's plenty of
money.
Yes.
Yeah, yeah, yeah.
It's, it, it usually happens like that.
So abides by the rules.
It works just fine.
The problem is when people don't wantfollow the rule book, we have another
(27:15):
company where, where the solutionwas hard for the CEO, but he had to
fire his brother because he, he justdidn't want it to follow, but if you
can manage to do that, you're okay.
Dave (27:31):
All right.
Do you have like a psychologydegree as well, Nicholas?
Cause you're talking, when Isay that it's a compliment,
Nicolas Rivera (27:37):
I know, I know, I know.
Well, as I was telling you atthe beginning, when I studied
investment, the trick in the trickin getting it right in the investing
world is understanding psychology.
So I read a lot of books about investment.
Investment psychology, I guess that'swhere I got some of my knowledge.
Dave (27:55):
Very impressive.
Maybe I think a lot like you.
So maybe I'm reallyColombian and not American.
So I don't know.
That's I'm reallyimpressed by your insight.
What are your two or three top pieces ofadvice for a, let's just say a father, a
father or a mother seeking to transitiontheir business to their children?
(28:19):
If you could boil it down to three points,
Nicolas Rivera (28:22):
all right.
So three pieces of advice for theparents who want you to want to sell
their companies to their children.
Okay.
Right.
Right.
The first one, be realistic, right?
Right.
Just because they are yourchildren doesn't mean that you
can get away with everything andthat's something we see a lot.
(28:45):
Like, okay, if this was an investor,I wouldn't be asking this much
of, of an external investor.
Right.
So think of your children as investors.
Yeah.
The second one would be let go.
Once you say you are out, get out.
(29:06):
Don't say you are out andtry to stay in somehow.
Don't say you are out and go visitingthe plan, talking with employees
just to know how things are going.
Don't say you are out and askeverybody to CC you on every email
that's supposed to go to the CEO.
Once you say you are out,let the kids do their job.
(29:27):
If, if you want to be part of thecompany, stay in the company as part
of the board, be the chairman of theboard, but don't get in the business
of the CEO, let the CEO do his job.
That's the second one I would think.
And the third one is enjoy life.
(29:48):
This is a chance for you to do everythingyou wanted to do and couldn't do before.
So go ahead and do it.
Go on travel, go play that sport.
You've never been able toplay as good as you want it.
Go do that hobby you wanted to dowhen you were 20, but you couldn't.
Live your life.
You are in a very privileged position.
(30:12):
So take advantage of that.
That would be the three things I wouldsay to the, to the parents who want
to sell their companies to repeat.
Dave (30:20):
I'm going to frame those.
Those are spot on.
How do you deal with.
The person who is leaving the companyand moving towards retirement.
And I need to help here a little bit.
So I spoke to a bunch of business ownerslate last year in San Diego, and I
told them not to retire, but rewire.
(30:42):
And what I mean by that is I thinkwe're all going to live to be about
a hundred, assuming no calamity,no, you know, some unforeseen event.
But I think because of.
At least in the United States, wheremedicine is at, if you can afford it, that
is the health care industry, nutrition,again, at least in the United States.
(31:03):
You can live to about a hundred,so what are you going to do?
My sense is, as individuals, unlikeprior generations of the United States,
where our ancestors, they would getto 65 and they were dragging and
they were kind of worn out, that'snot happening in the United States
for a certain class of individuals.
(31:24):
And so I told them it's time forthem to figure out how to rewire,
find what's next, what does that looklike, how do they go about doing it.
And I, Nicholas, I haven't found very manypeople who have been successful at that.
The vast majority, Ithink, struggle with it.
In part, maybe it's because Butjust jumping from a business
(31:44):
you've been in 30, 40, 50 years,you know, it's not easy to jump.
What advice do you give topeople because to help them
rewire or create a new mindset?
Does that question, whichis rambling makes sense?
Nicolas Rivera (31:58):
Yeah, sure.
It makes a lot of sense becausewhat I've seen with people who
just retire and do nothing is thatone, they get bored pretty easily.
Two, they start losing theirabilities, like, very, very fast.
If you don't use your brain for fiveyears, you're going to waste a lot
(32:20):
of brain power that you still have.
So I am not very much of a fan of a65 year old starting a new business.
Dave (32:31):
I
Nicolas Rivera (32:32):
don't think that that requires a lot of physical
energy that maybe is not there.
Right.
So what I think is.
Maybe it's because of the way thatwe have been able to do it with our
companies that the owner is able toremain in some position in the company.
So they still have to work, dointellectual work as chairman of
(32:56):
the board, because they still,their kids are going to still
go to them for hard questions.
And that's what we want to happen.
Sometimes when something really,really hard happens in the company,
we tell the, we tell the son, go askyour father, what, what, what, what
would your father do in this case?
(33:16):
What would have happened ifyour father was in charge
and this, this problem arise?
Because it gives them a lot of perspectiveand it helps the father to feel useful.
Still, to be able to contribute,to be able to, to use your
brain for solving hard problems.
As long as your brain works.
Use it.
Don't waste, don't waste your brainpower because that's from a lot of
(33:40):
cases and not only business owners,but a lot of cases of people above 65.
I think that the ability to haveyour brain working, it's a privilege.
Yes.
So if you're, if yourbrain still works, use it.
If you can use it to help your kidgrow your company and help you.
(34:02):
With your legacy, do it.
Dave (34:04):
Good call, man.
I'm taking a ton in really great insight.
What do you think's next for you?
Do you see yourselfcontinuing down this road?
You see this, this businessthat you've developed evolving.
What, what do you see foryourself and for your partner?
Nicolas Rivera (34:22):
Well, we have great expectations with, with our company.
We have been getting a lot of interestbecause this problem It's growing.
I mean, the amount of businesseswhose owners are about to retire
is growing and it's growing fast.
So we are, we're in a very good placein history, I think, and we have been
(34:48):
able to help a lot of companies and westill want to help a lot more companies.
That's why we have.
From two years ago, started expandingfrom Latin America to helping Hispanic
business owners in the States.
So we're currently also helpingHispanic business owners in
Texas, in New York, in Florida.
(35:11):
We, we, we, we think that there's agreat opportunity to help Hispanic
business owners to make thistransition because one of the things
that I have found, and that's in theStates, not, it's not in Columbia.
Right.
What we have found is that kidsdon't want to have anything to
do with their parents company.
But that's because they've onlyseen their parents struggling
(35:33):
through all their lives.
Dave (35:34):
Correct.
Spot on.
Nicolas Rivera (35:36):
So the parent has a very prosperous company.
It, I mean, it was a company that, Idon't know, has 15 million a year in
revenue, but the kid doesn't want to haveto do anything with the parent company.
And the sad thing is that that company isnot yet ready to be sold to a third party.
Why?
(35:56):
Because it still needs thebusiness owner to make it work.
And that's very common in the States.
We've seen that that's verycommon in the States for what
we have seen in the States.
So if you can convince.
The children that running acompany is not struggle, but
it's an, it's a fun thing to do.
All our CEOs have fun running theircompanies and if they don't have fun,
(36:20):
we help them have fun running theircompanies because that's our philosophy.
You need to be having fun.
If you're struggling, you're sufferingas a CEO, you're doing it the wrong way.
So what we.
These new generations to understandis that they can also enjoy the legacy
that their parents are, are leavingbehind, and they can take advantage
(36:43):
of that because sometimes they don'tsee that as, as a, as a privilege.
And I think it's a privilege to beable to run your family company.
You'll be able to take acompany that's working.
It might be not as profitable as youwant, it might not give you the salary
that you are getting at the moment at afirm, or at a bank, or at a multinational
(37:07):
company, but if you are smart, and ifyou work hard, Intelligently in your
family company, you're going to makemuch more money than what you can
make as an employee somewhere else.
Dave (37:19):
Absolutely.
And that's
Nicolas Rivera (37:20):
something we are working right now with U.
S.
companies, but companies thatare from Hispanic families.
Dave (37:29):
Can you, can you share with us how many families, I mean, how many companies
you're working with just generally,how many do you work with at one time?
I mean, is it somethingyou just do one at a time?
Do you do multiple?
How does that work for you?
Nicolas Rivera (37:40):
Well, we have a team of consultants that help us with
different issues here in Bristol.
At the moment, we areworking with 15 companies.
Wow.
And we are growing the team ofconsultants so we can get even more
companies in the future becausewhat we created was a methodology.
(38:01):
And that methodology it followed,allows a company to grow, thrive.
And the ultimate goal of the,of the, of the method is that.
You have a sellable company, whetherit's that company is going to be sold
to your children or to an outsider,it's of no consequence for us.
(38:22):
It's very, you can sell it to yourchildren because you're going to preserve
your legacy, but the method is focused.
Um, the fact that you take a company toa point where it's sellable and for us,
a sellable company is really easy to, todefine that it's a company where you can
hire someone good to do your job as a CEO,and you still make money as an investor.
(38:44):
If you can achieve that,you can sell the company.
If you can't do that, if you stillhave to be in the company nagging
everybody, you are not in position,in possession of a sellable company.
Dave (38:56):
You are so correct.
You know, I keep telling the peopleW2 or ordinary income United States is
not worth it if you can have cap gainstreatment because you're an owner.
It's just, you're, you're spot on.
So, you've got 15 people working foryou, excuse me, you have 15 engagements.
And you have quite a fewpeople working for you.
(39:16):
Are they in Colombia andthe United States, Mexico?
How do you, how have you handled that?
Nicolas Rivera (39:23):
No, all our consultants right now are in Colombia.
Excellent.
We're using talent from Colombia.
Dave (39:30):
That's excellent.
So you do most of it kind of by zoomand telephone, that sort of thing.
Nicolas Rivera (39:36):
Everything is virtual.
Everything is virtual.
That's
Dave (39:38):
fantastic.
The government needs to hire you,and I do mean the United States.
Well, I mean, in fairness, it's cultural.
It really is.
And I'm sure you have a better jobof bonding with these companies than
if I were to walk in off the street.
And you can't make generalities, but itjust makes a ton of sense to me, Nicholas,
(40:00):
that you could go in and really helpHispanic owners in the United States.
That's fascinating.
And obviously, you know.
The Hispanic members of, of the societyhere in the United States are going
to continue to grow and grow and grow.
So I think you've caught a whirlwind here.
(40:22):
I want to thank Nicholasfor appearing today.
I've, I've learned a lot.
I, Nicholas, I don't rememberthe last time on any of my
podcasts I've learned so much.
So I
Nicolas Rivera (40:35):
Thank you.
Thank you very much for those words.
Dave (40:38):
How do folks reach you
Nicolas Rivera (40:40):
if they need your help?
All right.
You can reach us at www.
bristolconsultores.
com.
You can also find us onLinkedIn as Bristol Consultores.
Or YouTube.
You can also search Bristol consult forthis, or you can find our community.
(41:01):
We have a very, very thrivingcommunity of business owners from all
over Latin America and Hispanic us.
You can also reach us at Instagramby community that Bristol, and we
are very, very happy to, to helpanyone who's a business owner, a
(41:21):
Hispanic business owner, whether it'sin the States or in Latin America.
To thrive and to be able to,to preserve that legacy of, of
Hispanic business ownership.
Dave (41:33):
Well, I know when I get off this call, I'm going to dial you up on
LinkedIn and I'll look you up on YouTube.
Thank you again.
I mean, really, reallyinsightful, just, just fantastic.
Ladies and gentlemen, if you're in searchof assistance, please go to davidsider.
com and schedule a consultation.
Boy, I'd really appreciate it.
(41:55):
If you would subscribe to this show,rate it, and leave me a comment
on your favorite podcast platform,such as Spotify or Apple Podcasts.
Again, I thank you, Nicholas.
And to my listeners out there, stay safe.
(42:16):
This podcast is provided for educationalpurposes that does not constitute legal
advice and is not intended to establishan attorney-client relationship.
The recommendations contained in thispodcast are not necessarily appropriate
for every individual or business indetermining the best course of action.
Business owner should consult with anattorney on their distinct circumstances.
Show me the way episode 50, the international insider.
And this episode kids, wetalk with Nicholas Rivera of
Bristol consul Torres Columbia.
Hey, ladies and gentlemen, you're goingto really be excited by this podcast.
Nicholas Rivera about hisexperiences in helping families.
Here's really somethingthat I found fantastic.
(00:24):
I, I learned so much from, from himthat even though he's got all the
pedigree, all the background, all thefinancial information, the psychology,
the emotional handling that he bringsto the table to deal with families,
specifically Hispanic families.
Is something you just don'tget from a lot of consultants.
(00:47):
This guy obviously has been workingwith a lot of people a long time.
He's got to be a very known commodityway beyond Columbia, but through
all of Latin America, he workswith folks in the United States.
It is refreshing.
It is invigorating.
It is, it has given me energy as youcan tell in my voice, please stay
(01:08):
tuned, listen to the whole thingand listen to the punchline, the top
three, Items that he's going to leavefor you at the end of the podcast.
This is going to be great.
Welcome
(01:30):
to show me the way a podcastpresented by Spencer Fain,
LLP about business succession,planning the merger and acquisition
experience and successful exits.
I am your host, Dave Sider.
Okay, kids, joining me ontoday's show is Nicholas Rivera
of Bristol Casatores, Colombia.
We are going international forthe first time on this podcast.
(01:54):
Thank you so much, Nicholas.
Nicholas deals with what we callin the trade, international trade.
Insider transfers.
That's where you're transferringit from, more likely than not, one
family member to another, vis a vis.
It could be a son, a daughter, couldbe employees, but primarily families.
And he has an interesting twist,because for me, I am completely
(02:18):
ignorant on how it's done.
In any country outsideof the United States.
So this is going to be personallyexciting and fulfilling.
Nicholas counsels many,many family businesses.
Nicholas, welcome to the show.
Nicolas Rivera (02:33):
Well, they thank you very much for inviting me.
Very proud to be here.
Very proud to be your first international.
And I'm also very interested incontributing to your community
about our experience in dealing withbusiness transfers outside of the U.
S.
Dave (02:51):
Ladies and gentlemen, did I steer you down the right row with this guy?
He is the real deal, butlet's start at the beginning.
Nicholas, I really wantto have all my guests.
Kind of give a background so thatpeople can identify with you in
your early business experience.
Were you born and raised in Bogota?
Nicolas Rivera (03:09):
Yes.
Yes.
I've been born and raised in Bogota.
I've lived here all my life.
I studied finance in the Sergio ArboledaUniversity here in Bogota, Colombia.
That's my area of expertise.
When I started back in 2001, I startedas an investment banker associate, and
(03:34):
then I had the possibility of advisingsome M& A transactions here in Colombia.
From there, I jumped tomanagement consulting.
That's something I did fromaround 2003 all the way to 2007.
From there, I not only deal with m and as,I dealt with mostly strategy and growth
(04:01):
and financing issues in the companies,but I also had to deal with some.
Aspects of from there, I just took acompletely different road and I started
my inroads in investing and that was 2007.
(04:22):
I started working mainly with US markets.
Um, that was all the way up to 2015when I decided that what I've learned
investing, and I'm going to make pausehere, what I learned investing is the
most difficult part of investing isthe emotional part, not the technical
(04:46):
part, it's not the fundamentals.
It's, it's getting it together when you'redoing it and when you're losing money.
And I had to study a lot about how peoplefeel when they're investing and what
people mess up when they're investing.
Yes.
And that gave me quite a uniqueperspective on how people who are
(05:07):
responsible for taking decisionsand huge amounts of money feel.
Because that's something that peopledon't think about it that much.
I mean, everybody thinks about the,the, the, the hard stuff, but nobody
thinks about how people are feeling.
And when you go back and you see wheremistakes are made is mostly because
(05:28):
some feelings betrayed someone, whetherit was rage, whether it was envy,
whether it was extreme happiness.
Something happens and people messup when they invest or when they
take huge decisions with theircompanies, or when they are thinking
about selling their business.
(05:49):
And that's something that Ibrought from the investment world.
And that allowed me then in 2020, whenwith my current partner, who is also an
attorney, we decided to start a businessthat was Bristol Consultores Colombia.
Yeah.
Which was focused in the beginningin helping struggling business
(06:11):
here in Colombia due to pandemic.
The thing is that when we startedthat, what we found was that a lot
of business that were struggling werealso businesses where the founders
were about 60 to 75 years old.
And they were facing a very complicatedissue or was that they could die
(06:34):
due to COVID and some of them didn'thave a plan, didn't have a plan to
do something with their business.
Some of them had kidswho didn't have any idea.
What to do with their parents companiesand some other kids that didn't want it
to do anything with the parent companies.
So we decided to design a methodologyto help this struggle in business.
(06:59):
And one part that was helpingthese business owners.
To be able to transfer theirbusinesses to their offspring
with the least amount of problems.
And that's where the feelings issuecame in hand because most of the
problems that we found were not.
(07:19):
Again, in the hard stuff.
We're not in the numbers.
We're not in the fact that thebusiness was or was not profitable.
What's in the fact that how they felttheir son, their daughter failed regarding
the business, how the founder failed,how he was going to be displaced.
He was going to be forgotten.
(07:40):
Nobody was going to listen to himanymore or listen to her anymore.
That was the big issues whenit came to business transfers,
uh, between family members.
So that's where we got during the lastfour years, a lot, a lot of experience
dealing with these kinds of issues,dealing with the fact that sometimes.
(08:00):
Family relations are struggling beforethey try to make the transaction
and how that affects everything.
And that's something that I think it'svery important, not only in Colombia,
because I read an article the otherday and I saw this struggle of boomers
who are business owners in the States.
(08:21):
And Whose kids are not willingto take their businesses.
So that's, I think that'sa global issue now.
Dave (08:29):
I think we are brothers from another mother here, Nicholas,
because you're reading from my script.
And I'm going to say for three reasons,which is, it's interesting that this goes
to prove that in the world, we're allabout, we're all about the same people.
You know, I don't know howwell that works, but we're
(08:49):
all really one in the same.
I am really big about dealing withthe emotional side of all of this.
I, it's easy at some level, Ishouldn't say easy, but you can
sit down and figure out the, theeconomics, the financial side.
Of a transaction, you can analyze todeath, but at the end of the day, all
(09:10):
decisions are emotional, all decisions,and I just, that's something that's
very, very difficult for people.
One of the chapters in the The book,I write about this extensively,
and it sounds like you're likeme, I really don't want people to
struggle with the emotional side.
Because it is, it is notsomething that's taught.
(09:31):
You go to school to learn numbers or lawor something, but they don't teach this
part of it, and it's very, very difficult.
And you're right.
I, uh, please check my numbers,but I think sometime around 2050,
35 trillion is changing hands.
And most of it, I think, isprobably going to go from one family
(09:52):
member to another, or the ownerof a company to its employees.
And in fact, I usually start,if I'm asked to do strategy,
I usually start with saying,shouldn't we talk to the employees?
They may be your best source.
Now, granted, individually, they maynot have The money, but through ESOPs,
(10:12):
stock option plans, through promissorynotes, through any number of things.
There could be a way to make things work.
So, let's, let's go to this now.
You're dealing with, it sounds likeprimarily families or closely held
companies, dealing with the transfer.
What does your first meeting look like?
Kind of walk us through that.
Nicolas Rivera (10:34):
Well, you show Luna.
When a founder wants to sell ortransfer his business and they call
us, usually the expectations that theyhave for the first meeting are wide,
far away from what they really need.
That's what we have found.
Dave (10:53):
Yes, but drill down on that Nicholas, drill down.
I agree, I know what that means, but yeah.
I'm going to, I'm going to drill down.
So for
Nicolas Rivera (10:59):
example, sometimes they, this is, this is a case that I love.
It was the father trying tosell the company to his son.
They were trying to define a value.
So the son called a consulting firmto make the valuation of the company.
The consultant firm comes withsomething around minus 3 million.
(11:25):
That was about it.
Dave (11:28):
Thank you so much.
You can imagine what the,
Nicolas Rivera (11:32):
what, what, what the father felt when, when it's, when
the son came up with this number,it's actually a very good, good
company nowadays, but what, what wehave found is that the expectations
that the founder regarding value.
Are always very, very far awayfrom what market value actually is.
(11:54):
And having this conversation with astranger is hard enough, but having
it with your kids, I'm, I'm, I'm notvery familiar with the employee case,
so I won't go in there, but I guessthat if you're having this conversation
with one of your employees who is asubordinate, it's going to be even harder.
(12:16):
But when you're having it with yourkids, the thing is that you have to set
expectations in a realistic way, and youhave to make them both understand that
it's in both their own best interest.
To be able to come up with somethingthat's reasonable, reasonable for
(12:36):
everybody in that case, for example,when we go in that first meeting
with a customer, we try to understandwhy is that happening in that?
Just let's give you an example.
If you're talking with somebodywho is 60 and he wants to go
out, he wants to enjoy life.
(12:56):
He wants to buy a boat, he wants toplay golf, whatever, it's not the
same thing as when you're talkingwith someone who's 75, who cannot work
anymore, who maybe has early onsetAlzheimer's or something like that.
Because whether it's your son, a stranger,or your employees, they're going to notice
(13:17):
that you are in a state of weakness.
If you're 75, you're trying to exceedyour So what we're trying is to go
in the meeting and try to set theexpectations of everybody so that
everybody walks with a happy face.
This is Tom.
So even after the transaction, evenif it goes sour, they still got to
go to Christmas with one another.
(13:40):
Exactly.
So you're not only tryingto make the deal work.
You need to keep the family togetherand everything has to be functional,
even after the deal goes again, becausecompanies at the end end up going
where the new owner wants them to go.
So sometimes the, and it's veryusual and here in Columbia, and we've
(14:05):
seen that also in the States, when acompany is run by somebody who's 70
years old, And it's a small company,let's say five to 10 million revenue.
Usually they have a very limited setof customers, very loyal customers,
but a very limited set of customers
Dave (14:24):
who are
Nicolas Rivera (14:25):
usually providing most of the income.
So when the son shows up and takes thebusiness, he can double, triple, quadruple
the size of the business very easily.
So evaluation over the cash flow of thosecustomers is not really an indicative
of what the business is going to beable to make with a new owner in charge.
(14:48):
So when you try to make somethingthat, allows current owner to fulfill
a good transaction to make a good deal.
Sometimes they, they want to sell most ofthe company, but not all of the company.
And for example, they say, I stillwant to be able to say something.
(15:11):
This is, this is the company I found it.
So I want to be able to saysomething every now and then.
Dave (15:17):
And you let, and they'll listen at the same time.
I want to say somethingand you will listen to me.
It's a two step analysis.
Yeah, yeah, yeah, yeah, yeah, yeah, that's
Nicolas Rivera (15:26):
right.
So what we usually do is the childrentake most of the stock in the company.
Dave (15:34):
Right.
Nicolas Rivera (15:34):
Sometimes they have to pay it up front, sometimes they
pay it over time, five years mostly.
And what we have found is that weallow the previous owner, the founder,
to remain as chairman of the board.
And we create, not all these companieshave a board of directors because
(15:54):
they're privately held companies,mostly LLCs and stuff like that.
So they don't have a board, butwe establish a board and in that
board, the founder can go and givehis opinions every now and then.
And that helps a lot withthe transition because.
One of the issues, I guess that'sin some of your questions, but I'm
going to move forward with this.
(16:15):
No, go ahead.
Please.
One of the main issues regarding foundersis that some of them think that their
companies are their personal checkbooks.
Dave (16:27):
You're just, you're hitting on, You're hitting on all, all the
things, Nicholas, you know, allthe things that I talk about, only
you're, yeah, this is wonderful.
It really is.
Please continue, I apologize.
Nicolas Rivera (16:41):
Don't worry, it's so, what happens then, it's that
you, you put your, your son as a CEO.
And you tell him he's the CEO,and he believes he's the CEO.
But then one day you decide youwant to buy a condo in Boca Raton.
So you take a million dollars fromthe company and buy your condo.
And now your son is strugglingbecause he doesn't have money
(17:05):
to make rent or to make payroll.
So that generates a lotof tension between them.
And I've seen kids just quitting ontheir, on their parents because they do
stuff like, so when you remove the, thefounder from the executive position, but
you leave it in a position where he can'ttouch the money, but he can still give
(17:29):
contributions and he can still help thecompany from a very wise perspective.
The companies work much betterthan when you just leave the
chip with the, with the company.
And we found that that's a very, verygood way to make the whole thing work and
allow the company and the family to staytogether because they both can have what
(17:54):
they need, not what they think they want.
Sometimes they think they want to sell.
Yeah, they want to sell, but you don'treally need to sell because if you sell
and you go away in your retirement plan,I'll bet you'll be bored in three months.
Yeah.
This is very active peoplewho've been working 12, 15 hours
(18:15):
a day for 15, 20, 30 years.
You can't just go andretire and play golf.
That's not going to work.
So when you allow them to be present andcontribute to the company, that, that,
that gives them a lot of fulfillment.
And that also helps the children becauseall that wisdom, it's going to take time.
(18:35):
Decades for them to achieve and that's,that's a very, a very good way in which
we have been able to make this work in,in the companies we've been advising.
Dave (18:46):
You're just, you're hitting on every single point that I
think about and talk about.
Without exception, I just,this is fantastic to have
this kind of a conversation.
I'm, I'm sure we lived in the samehousehold somewhere or taught, or
was taught the same sort of, samesort of rules or lessons of the road.
(19:09):
You know, it, it, In dealing withfamilies, and I, you know, I think
you're right, that you can't let someonewho's retiring just walk out the door.
It won't work emotionally or mentally.
It just, it's going to be dysfunctional.
But you also want to havetime to transition all of the
clients and customers over.
(19:31):
There is, what I also find is, andit's very difficult, is, because it
happened with a couple of clients,To say to them the nice way, never
refer to the people in the C suite asyour sons and daughters don't do it
because it devalues or undermines theirsignificance and you know, whether or
not you're right or wrong is irrelevant.
(19:52):
You want to make sure thateverything is at a place where people
feel respected and appreciated.
Now that we're getting older, we'reprobably talking like old fogies, so
to speak, but it's an important part.
And it is important to keep them in theC Suite or on the board and have them
involved in decisions, which is not thesame thing as giving them check writing
(20:14):
authority on anything going forward.
It's all got to be negotiated.
You are, you are so much rightdown the middle of the thought
process that I have as well.
Can you, with obviously not using anynames, can you share some specific,
um, Memories that you've had orexperiences that were very positive,
(20:34):
some of the things that you've doneand results that you've created.
I know the audience wouldlike to know about it.
Nicolas Rivera (20:39):
Well, yeah.
So what comes to my mind is this company.
This was a company that startedlosing money after the 2008 crisis.
They, they started to lose moneyin 2009 and that went for 11 years.
When they came to us, itwas 11 years losing money.
(21:01):
They have the, the, the father, thefounder had a very, very generous fund.
Family fund that family fund have beengiving money to the company for all those
years, but by the time we arrived, thephone had depleted 90 percent of its
value and that generated a lot, a lotof discussions in the family, because
(21:24):
it is your fault, it is your fault.
The father told to the kid, the kidtold for the father, it is your fault.
If you didn't take that decision backin 2014, if you didn't do that back
in 2017, if you have paid attentionin back in 2013, it was a mess.
And we were in a meeting with, withboth the father and the son, and the
(21:45):
son was desperate and he yells in frontof everybody, we're sitting in the,
in the, and the, and the son yells tothe father, Luke, the best deal that
we can make here on this table today.
Is that you die.
Oh, wow.
So that was, that was hard.
Yeah.
Dave (22:03):
Yep.
Nicolas Rivera (22:03):
That was hard.
Then it was, it was rough, but weunderstood that it was emotional.
Everything was coming from emotion.
So what we did with that company wasrestructure the whole thing commercially.
Operationally and then politically,because we understood that if the
(22:26):
father and the son were strugglingfor money, they were never going
to be able to be in a family.
Cordial relationship.
So we managed to get the, the,the company out of the red.
That was by 2021.
Wow.
They started making money out there.
(22:48):
Yeah.
Yeah.
It was, it was what needed to be fixedwas really something that unfortunately
they haven't been able to see, but whenwe applied our method, It changed right
away and it was visible for everybodywhat the, what the main issue was.
I'm not going to discuss the details,but when we managed to make the company
(23:08):
make some money, it was not big money.
It was like a 5 percent operatingprofit by the, by the time, but
they, they were making money.
Right.
So we, we, we restarted the conversation.
Not from the place of fear andfrom the place of rage that we
had last time, but from calmness.
(23:28):
Everybody was calm.
Everybody understoodwhat needed to be done.
And even though that company wasn'tthat valuable at the moment, I mean,
if you value that, I guess you'regoing to get another paycheck.
5 million in the red, something like that.
So what we did was we set up a way inwhich the founder could still make some
(23:49):
money out of the profits of the company.
Going forward, we secured a pension forhim and his wife was the mother of the,
of the new CEO and the new CEO boughtthe company in three years and secure
his His father and his mother's retired.
(24:11):
That's great.
And that, I think it wasa great victory for them.
Good for you.
Because, because they, itallowed the company to grow.
It allowed the company to thrive.
And nowadays it's, it's a very, verysuccessful company in this area.
Wow.
Dave (24:28):
You got to write a, you got to write a book on that one.
I'm serious.
You got to write a
Nicolas Rivera (24:31):
book
Dave (24:32):
on that.
Nicolas Rivera (24:33):
I will.
I have another one.
In this case, please, please, please.
In this case, the company was notas badly met as badly financially,
but these are two brothers.
They, they got thecompany from their father.
They also are in charge of alltheir, their, their parents expenses.
(24:53):
And they also have to contribute to thefamily fund, but these two brothers.
are the greatest example we haveof teamwork within families,
because that's another issue.
When you have brothers running a familytogether, you always have conflict.
Because it's difficult for some brothersto accept that another brother is
(25:17):
going to lead mostly if the leaderis not the older brother, right?
Because family hierarchiesstart mixing up with company.
So if you do not get that straightfrom the beginning, you're
going to have conflict, right?
(25:38):
So in this company, the CEO was theyounger brother and the CFO was the.
Older sister.
And they were having a lot of issuesbecause all throughout their life, the
older sister has been the leader inthe family, but now the company has a
leader and it's the younger brother.
And that led us to create a rulebook for that family so that they
(26:04):
could separate somehow the wayin which family relationships.
are managed from the way companyrelationships are managed.
And that's something that hasto do with what you just said.
When you're inside the company,you cannot be broader CFO.
Or brother CTO or sister CMO, you have tobe the CEO, you have to be the CMO, you
(26:30):
have to be, you have to be professional.
If you can manage to be professionaland let go of anything that comes
outside of that, and that's familyrelationships and everything, you're
going to have a prosperous company.
And if your company prospers.
Your family process.
Yes, yes.
And if everybody, everybody'shappy with that happens.
Yes.
(26:50):
And usually if everybody in the familyis, is in a state of prosperity,
family struggles start to decrease.
, Dave: it's, it's amazing when there's plenty of
money.
Yes.
Yeah, yeah, yeah.
It's, it, it usually happens like that.
So abides by the rules.
It works just fine.
The problem is when people don't wantfollow the rule book, we have another
(27:15):
company where, where the solutionwas hard for the CEO, but he had to
fire his brother because he, he justdidn't want it to follow, but if you
can manage to do that, you're okay.
Dave (27:31):
All right.
Do you have like a psychologydegree as well, Nicholas?
Cause you're talking, when Isay that it's a compliment,
Nicolas Rivera (27:37):
I know, I know, I know.
Well, as I was telling you atthe beginning, when I studied
investment, the trick in the trickin getting it right in the investing
world is understanding psychology.
So I read a lot of books about investment.
Investment psychology, I guess that'swhere I got some of my knowledge.
Dave (27:55):
Very impressive.
Maybe I think a lot like you.
So maybe I'm reallyColombian and not American.
So I don't know.
That's I'm reallyimpressed by your insight.
What are your two or three top pieces ofadvice for a, let's just say a father, a
father or a mother seeking to transitiontheir business to their children?
(28:19):
If you could boil it down to three points,
Nicolas Rivera (28:22):
all right.
So three pieces of advice for theparents who want you to want to sell
their companies to their children.
Okay.
Right.
Right.
The first one, be realistic, right?
Right.
Just because they are yourchildren doesn't mean that you
can get away with everything andthat's something we see a lot.
(28:45):
Like, okay, if this was an investor,I wouldn't be asking this much
of, of an external investor.
Right.
So think of your children as investors.
Yeah.
The second one would be let go.
Once you say you are out, get out.
(29:06):
Don't say you are out andtry to stay in somehow.
Don't say you are out and go visitingthe plan, talking with employees
just to know how things are going.
Don't say you are out and askeverybody to CC you on every email
that's supposed to go to the CEO.
Once you say you are out,let the kids do their job.
(29:27):
If, if you want to be part of thecompany, stay in the company as part
of the board, be the chairman of theboard, but don't get in the business
of the CEO, let the CEO do his job.
That's the second one I would think.
And the third one is enjoy life.
(29:48):
This is a chance for you to do everythingyou wanted to do and couldn't do before.
So go ahead and do it.
Go on travel, go play that sport.
You've never been able toplay as good as you want it.
Go do that hobby you wanted to dowhen you were 20, but you couldn't.
Live your life.
You are in a very privileged position.
(30:12):
So take advantage of that.
That would be the three things I wouldsay to the, to the parents who want
to sell their companies to repeat.
Dave (30:20):
I'm going to frame those.
Those are spot on.
How do you deal with.
The person who is leaving the companyand moving towards retirement.
And I need to help here a little bit.
So I spoke to a bunch of business ownerslate last year in San Diego, and I
told them not to retire, but rewire.
(30:42):
And what I mean by that is I thinkwe're all going to live to be about
a hundred, assuming no calamity,no, you know, some unforeseen event.
But I think because of.
At least in the United States, wheremedicine is at, if you can afford it, that
is the health care industry, nutrition,again, at least in the United States.
(31:03):
You can live to about a hundred,so what are you going to do?
My sense is, as individuals, unlikeprior generations of the United States,
where our ancestors, they would getto 65 and they were dragging and
they were kind of worn out, that'snot happening in the United States
for a certain class of individuals.
(31:24):
And so I told them it's time forthem to figure out how to rewire,
find what's next, what does that looklike, how do they go about doing it.
And I, Nicholas, I haven't found very manypeople who have been successful at that.
The vast majority, Ithink, struggle with it.
In part, maybe it's because Butjust jumping from a business
(31:44):
you've been in 30, 40, 50 years,you know, it's not easy to jump.
What advice do you give topeople because to help them
rewire or create a new mindset?
Does that question, whichis rambling makes sense?
Nicolas Rivera (31:58):
Yeah, sure.
It makes a lot of sense becausewhat I've seen with people who
just retire and do nothing is thatone, they get bored pretty easily.
Two, they start losing theirabilities, like, very, very fast.
If you don't use your brain for fiveyears, you're going to waste a lot
(32:20):
of brain power that you still have.
So I am not very much of a fan of a65 year old starting a new business.
Dave (32:31):
I
Nicolas Rivera (32:32):
don't think that that requires a lot of physical
energy that maybe is not there.
Right.
So what I think is.
Maybe it's because of the way thatwe have been able to do it with our
companies that the owner is able toremain in some position in the company.
So they still have to work, dointellectual work as chairman of
(32:56):
the board, because they still,their kids are going to still
go to them for hard questions.
And that's what we want to happen.
Sometimes when something really,really hard happens in the company,
we tell the, we tell the son, go askyour father, what, what, what, what
would your father do in this case?
(33:16):
What would have happened ifyour father was in charge
and this, this problem arise?
Because it gives them a lot of perspectiveand it helps the father to feel useful.
Still, to be able to contribute,to be able to, to use your
brain for solving hard problems.
As long as your brain works.
Use it.
Don't waste, don't waste your brainpower because that's from a lot of
(33:40):
cases and not only business owners,but a lot of cases of people above 65.
I think that the ability to haveyour brain working, it's a privilege.
Yes.
So if you're, if yourbrain still works, use it.
If you can use it to help your kidgrow your company and help you.
(34:02):
With your legacy, do it.
Dave (34:04):
Good call, man.
I'm taking a ton in really great insight.
What do you think's next for you?
Do you see yourselfcontinuing down this road?
You see this, this businessthat you've developed evolving.
What, what do you see foryourself and for your partner?
Nicolas Rivera (34:22):
Well, we have great expectations with, with our company.
We have been getting a lot of interestbecause this problem It's growing.
I mean, the amount of businesseswhose owners are about to retire
is growing and it's growing fast.
So we are, we're in a very good placein history, I think, and we have been
(34:48):
able to help a lot of companies and westill want to help a lot more companies.
That's why we have.
From two years ago, started expandingfrom Latin America to helping Hispanic
business owners in the States.
So we're currently also helpingHispanic business owners in
Texas, in New York, in Florida.
(35:11):
We, we, we, we think that there's agreat opportunity to help Hispanic
business owners to make thistransition because one of the things
that I have found, and that's in theStates, not, it's not in Columbia.
Right.
What we have found is that kidsdon't want to have anything to
do with their parents company.
But that's because they've onlyseen their parents struggling
(35:33):
through all their lives.
Dave (35:34):
Correct.
Spot on.
Nicolas Rivera (35:36):
So the parent has a very prosperous company.
It, I mean, it was a company that, Idon't know, has 15 million a year in
revenue, but the kid doesn't want to haveto do anything with the parent company.
And the sad thing is that that company isnot yet ready to be sold to a third party.
Why?
(35:56):
Because it still needs thebusiness owner to make it work.
And that's very common in the States.
We've seen that that's verycommon in the States for what
we have seen in the States.
So if you can convince.
The children that running acompany is not struggle, but
it's an, it's a fun thing to do.
All our CEOs have fun running theircompanies and if they don't have fun,
(36:20):
we help them have fun running theircompanies because that's our philosophy.
You need to be having fun.
If you're struggling, you're sufferingas a CEO, you're doing it the wrong way.
So what we.
These new generations to understandis that they can also enjoy the legacy
that their parents are, are leavingbehind, and they can take advantage
(36:43):
of that because sometimes they don'tsee that as, as a, as a privilege.
And I think it's a privilege to beable to run your family company.
You'll be able to take acompany that's working.
It might be not as profitable as youwant, it might not give you the salary
that you are getting at the moment at afirm, or at a bank, or at a multinational
(37:07):
company, but if you are smart, and ifyou work hard, Intelligently in your
family company, you're going to makemuch more money than what you can
make as an employee somewhere else.
Dave (37:19):
Absolutely.
And that's
Nicolas Rivera (37:20):
something we are working right now with U.
S.
companies, but companies thatare from Hispanic families.
Dave (37:29):
Can you, can you share with us how many families, I mean, how many companies
you're working with just generally,how many do you work with at one time?
I mean, is it somethingyou just do one at a time?
Do you do multiple?
How does that work for you?
Nicolas Rivera (37:40):
Well, we have a team of consultants that help us with
different issues here in Bristol.
At the moment, we areworking with 15 companies.
Wow.
And we are growing the team ofconsultants so we can get even more
companies in the future becausewhat we created was a methodology.
(38:01):
And that methodology it followed,allows a company to grow, thrive.
And the ultimate goal of the,of the, of the method is that.
You have a sellable company, whetherit's that company is going to be sold
to your children or to an outsider,it's of no consequence for us.
(38:22):
It's very, you can sell it to yourchildren because you're going to preserve
your legacy, but the method is focused.
Um, the fact that you take a company toa point where it's sellable and for us,
a sellable company is really easy to, todefine that it's a company where you can
hire someone good to do your job as a CEO,and you still make money as an investor.
(38:44):
If you can achieve that,you can sell the company.
If you can't do that, if you stillhave to be in the company nagging
everybody, you are not in position,in possession of a sellable company.
Dave (38:56):
You are so correct.
You know, I keep telling the peopleW2 or ordinary income United States is
not worth it if you can have cap gainstreatment because you're an owner.
It's just, you're, you're spot on.
So, you've got 15 people working foryou, excuse me, you have 15 engagements.
And you have quite a fewpeople working for you.
(39:16):
Are they in Colombia andthe United States, Mexico?
How do you, how have you handled that?
Nicolas Rivera (39:23):
No, all our consultants right now are in Colombia.
Excellent.
We're using talent from Colombia.
Dave (39:30):
That's excellent.
So you do most of it kind of by zoomand telephone, that sort of thing.
Nicolas Rivera (39:36):
Everything is virtual.
Everything is virtual.
That's
Dave (39:38):
fantastic.
The government needs to hire you,and I do mean the United States.
Well, I mean, in fairness, it's cultural.
It really is.
And I'm sure you have a better jobof bonding with these companies than
if I were to walk in off the street.
And you can't make generalities, but itjust makes a ton of sense to me, Nicholas,
(40:00):
that you could go in and really helpHispanic owners in the United States.
That's fascinating.
And obviously, you know.
The Hispanic members of, of the societyhere in the United States are going
to continue to grow and grow and grow.
So I think you've caught a whirlwind here.
(40:22):
I want to thank Nicholasfor appearing today.
I've, I've learned a lot.
I, Nicholas, I don't rememberthe last time on any of my
podcasts I've learned so much.
So I
Nicolas Rivera (40:35):
Thank you.
Thank you very much for those words.
Dave (40:38):
How do folks reach you
Nicolas Rivera (40:40):
if they need your help?
All right.
You can reach us at www.
bristolconsultores.
com.
You can also find us onLinkedIn as Bristol Consultores.
Or YouTube.
You can also search Bristol consult forthis, or you can find our community.
(41:01):
We have a very, very thrivingcommunity of business owners from all
over Latin America and Hispanic us.
You can also reach us at Instagramby community that Bristol, and we
are very, very happy to, to helpanyone who's a business owner, a
(41:21):
Hispanic business owner, whether it'sin the States or in Latin America.
To thrive and to be able to,to preserve that legacy of, of
Hispanic business ownership.
Dave (41:33):
Well, I know when I get off this call, I'm going to dial you up on
LinkedIn and I'll look you up on YouTube.
Thank you again.
I mean, really, reallyinsightful, just, just fantastic.
Ladies and gentlemen, if you're in searchof assistance, please go to davidsider.
com and schedule a consultation.
Boy, I'd really appreciate it.
(41:55):
If you would subscribe to this show,rate it, and leave me a comment
on your favorite podcast platform,such as Spotify or Apple Podcasts.
Again, I thank you, Nicholas.
And to my listeners out there, stay safe.
(42:16):
This podcast is provided for educationalpurposes that does not constitute legal
advice and is not intended to establishan attorney-client relationship.
The recommendations contained in thispodcast are not necessarily appropriate
for every individual or business indetermining the best course of action.
Business owner should consult with anattorney on their distinct circumstances.
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