Transcript
Speaker: Welcome, everybody.
Speaker: And today, the great high privilege of talking to my good friend, Andy Lubash, founder and CEO of Prestige PEO.
Speaker: It's too bad this is audio only because you can't see the big Prestige logo in the background, which I am witnessing on that thing.
Speaker: So, hello, Andy.
Speaker: How are you doing?
Speaker: Doing great, Pat.
Speaker: Great speaking to you.
Speaker: Thanks for being with us today.
Speaker: So on the podcast, we do equal parts, the story of Andy and the story of PEO.
Speaker: So let's start, you know, where you started, and then when we get to the PEO part, then we'll start talking about the founding of Prestige and how that all happened.
Speaker: But I actually don't know.
Speaker: What town were you born in?
Speaker: Where did you start?
Speaker: New Hyde Park, New York.
Speaker: New Hyde Park.
Speaker: Unbelievable.
Speaker: Okay.
Speaker: So I went to high school there.
Speaker: Hicksville High School.
Speaker: The same person that taught Billy Joel how to play piano taught me.
Speaker: And look at me in the P.E.O.
Speaker: business.
Speaker: So did you ever consider a touring career?
Speaker: No.
Speaker: No.
Speaker: Okay.
Speaker: But yeah, so you moved in the same circles as Billy Joel, right?
Speaker: A little younger.
Speaker: A little younger.
Speaker: Yeah, that's true.
Speaker: That's it.
Speaker: That's exactly right.
Speaker: So that's great.
Speaker: So after Hicksville, went on to school from there.
Speaker: Yes, spent two years at CW Post College on Rhode Island and then the final two years at State University of New York at Oneonta.
Speaker: And what was your major?
Speaker: What was your field of study?
Speaker: Were you liberal arts or accounting or what'd you do?
Speaker: Business economics with a concentration in finance.
Speaker: Wow, that turned out okay.
Speaker: It actually did.
Speaker: So, by the way, when did you start playing hockey?
Speaker: Were you playing hockey in high school or did you start playing hockey later?
Speaker: Junior high school.
Speaker: Junior, so did you play for the school team?
Speaker: Yeah, I played for the school, correct.
Speaker: Did you wear a helmet?
Speaker: Obviously.
Speaker: I have a hard head, though.
Speaker: That's great.
Speaker: But you didn't play in college, right?
Speaker: No, there was no college hockey team.
Speaker: We just played in men's leagues and intermurals.
Speaker: Yeah, and something you continued, really, until pretty recently, right?
Speaker: I still play.
Speaker: Still got it.
Speaker: Okay, so once you got out of college, what was your first job?
Speaker: I was a research analyst for a privately held small boutique investment firm.
Speaker: Where in New York, in Manhattan?
Speaker: In New York.
Speaker: Okay.
Speaker: And then from there, I ended up getting recruited by the Equitable Financial to help them set up their investment shops.
Speaker: I was their investment coordinator or the equities coordinator.
Speaker: where I travel around the country, working with different agencies, teaching insurance agents about investments, present investments as they were trying to expand the offering that life insurance career shops offered.
Speaker: And then from there, I got tired as a 20-year-old kid waking up in the middle of a town that fell asleep at 6 o'clock with no life.
Speaker: And then I ended up actually filing my own broker deal and my own securities firm with the NASDA.
Speaker: for personal asset management.
Speaker: I ran for quite a few years and was referring clients that were interested in employee benefits to a gentleman that specialized in it.
Speaker: Said, hey, listen, take care of my clients.
Speaker: I'm in the investment side of things.
Speaker: I really would expect nothing from you, but just good service.
Speaker: And then I found that he was writing my business, doing 401ks and retirement plans.
Speaker: And I was like, hey, I'm a research analyst by trade.
Speaker: It's my analytical skills.
Speaker: Analyzing benefit booklets and plan designs is just as easy as analyzing a financial statement of a publicly held company.
Speaker: And so I started doing that, and it just grew.
Speaker: And it came to the point that I actually closed the broker-dealer, personal asset management,
Speaker: And really at that point became an employee benefits consultant and grew a, I guess, a mid-sized agency that kind of eventually pushed me into the PEO space.
Speaker: So when do you remember?
Speaker: What was your first mention of PEO?
Speaker: When did you first hear or learn about what a PEO is?
Speaker: Like at what point in that journey did you finally, did you become aware that there's this thing out there called PEO?
Speaker: But 1987, what was happening was that our clients in the benefits space were asking us for things that were really outside the scope of service that a benefits consultant would provide.
Speaker: It started, hey, do you have a COBRA letter?
Speaker: Could you help us with a severance agreement?
Speaker: Yeah.
Speaker: And the questions were coming in and our clients did range from small to mid-sized businesses.
Speaker: You know, that was somewhere, you know, five to 10 employees up to our largest client had three or 4,000 employees.
Speaker: They were asking for the same questions.
Speaker: So we were deciding, all right, let's maybe, you know, bring in, you know, some counsel in-house in our agency and also an HR consultant or somebody that's an HR professional.
Speaker: And we would, you know, differentiate the services that our benefits agency offered.
Speaker: by providing these value ads.
Speaker: We knew someone in Florida that I'd known through college and my partner, Alan, knew through college at that point.
Speaker: And we said, hey, he's doing something along the lines with benefits and HR and legal and so forth.
Speaker: And we gave him a call and he was like, hey, guy, you didn't reinvent the wheel.
Speaker: It's called a PEO.
Speaker: The association is in Washington, D.C.
Speaker: Here's the name and phone number.
Speaker: Called up.
Speaker: Okay.
Speaker: Learned a bit about it on the phone from your predecessor.
Speaker: Okay.
Speaker: Basically say the same thing that everybody else says after they learn about a PEO.
Speaker: Why isn't everybody doing this?
Speaker: Didn't reinvent the wheel?
Speaker: And basically said, this is the future.
Speaker: This is the way of the future.
Speaker: And we started Prestige PEO.
Speaker: In 87?
Speaker: 87, 88, yeah.
Speaker: And then... I'm not that old.
Speaker: I'm not that old.
Speaker: That's right.
Speaker: I'm old, but not that old.
Speaker: 97, 98.
Speaker: I'm sorry.
Speaker: So it's interesting because some people start from a standing stop, but you were spitting off of benefits consulting.
Speaker: That helped a little bit?
Speaker: It absolutely did.
Speaker: Because again, most PEOs actually come from payroll or staffing.
Speaker: So coming from benefits, which is a real challenge for a PEO to, you know, get a master benefit program and install benefits in, you know, and have the carriers, you know, believe in you that you're not doing any harm to them definitely helped.
Speaker: It also helped that we were able to go to some of our small to midsize clients and, you know, explain the offering to them, say, this is what we're going to be doing.
Speaker: This is what we're going to be expanding into.
Speaker: What do you think of it?
Speaker: You know, one of the challenges we always had as an industry is, you know, branded PEO.
Speaker: What does that stand for?
Speaker: Okay.
Speaker: Professional employer organization.
Speaker: What is that?
Speaker: But when you, you know, go through the value prop of what we do, it's very hard to resist.
Speaker: Yeah.
Speaker: And so you, when you started, how many, well, how many internal employees did you have and how many worksite employees did you have?
Speaker: Well, it started with zero.
Speaker: Okay.
Speaker: At first we had about three or four internal employees.
Speaker: And then from there, you know, brought in a partner, you know, that had broker relationships, Larry, who's with me today.
Speaker: So that helped us develop our sales team as we are a PEO that does deal with employee benefit brokers.
Speaker: We don't come out directly to the public or go to market strategies through the benefits.
Speaker: which is where we came from.
Speaker: And then from there, as things were really growing, we bought another partner in Brian that was able to handle the internal portion, that we weren't coming back at the end of each day, handling all the back office work, he was able to handle that.
Speaker: And then we just started to grow.
Speaker: And in a market, primarily in New York, where again, PEO was not as popular as it was in certain states throughout the country,
Speaker: But again, just continuing to tell the story, you know, to provide the value proposition of what we what we do.
Speaker: And growth just became exponential.
Speaker: And here we are 20, almost 26 years ago today.
Speaker: And probably out of those first 15 clients we started with 26 years ago, we still have at least 10.
Speaker: So that's impressive.
Speaker: Yeah, that's impressive.
Speaker: Just a lot older now.
Speaker: Yeah, not me, but I'm sure they are.
Speaker: So you have been one of the companies that have been really bullish about using brokers.
Speaker: So talk about that.
Speaker: Why do that?
Speaker: Why wouldn't you have your own internal sales staff?
Speaker: Lots of PEOs grapple with that.
Speaker: what they're going to do.
Speaker: And you've had huge success with it.
Speaker: So why, and again, you know, people should know that we got invited to speak to a group of brokers, whatever that was, seven or eight years ago, and everybody ran like scalded dogs.
Speaker: You're like, I'll do it.
Speaker: And we're here in DC.
Speaker: And I never forget it.
Speaker: You walked in that room and you were like, hey, like you guys can make a lot of money with PEO.
Speaker: You made a lot of friends in that room.
Speaker: And there were people in that room already.
Speaker: You're like, no, I know what a PEO is.
Speaker: We're doing it.
Speaker: So
Speaker: You know, where people like, oh, how do you deal with brokers?
Speaker: Because, you know, you're you know, you're loggerheads with them like, no, no, no, no.
Speaker: We've got one of our larger PEOs out there that's doing it.
Speaker: So so why and how did you come to that when not everybody does and how do you make it work?
Speaker: First of all, again, being a broker, you understand the language.
Speaker: And that's very important as well.
Speaker: You want to make sure that the broker is, you know, first of all, giving you priority business, not business that they can't find a home for.
Speaker: Hey, I've got this dog with fleas.
Speaker: Let me see if I can jump it on a PEO.
Speaker: OK, no, you have to be very careful and very, very selective about that and know what you're looking for.
Speaker: Because again, being coming from the other side, you knew what that looked like when you were stuck with one of those cases.
Speaker: So you have to protect your book to protect your block.
Speaker: And again, the brokers that we deal with understand that now.
Speaker: So they realize that we're not someplace that they can try to send things that they can't find a home for.
Speaker: One of the main reasons we dealt with brokers also, again, being with one, there's relationships there.
Speaker: Okay.
Speaker: Again, very hard to direct sell.
Speaker: Okay.
Speaker: Knocking on doors.
Speaker: Hello, would you like to buy a PEO?
Speaker: You know, that's a very hard thing to do, especially where you don't necessarily know what that is.
Speaker: So again, by recruiting brokers and teaching them, you know, giving them a new product to sell or something new to talk about, you know, they can, again, talk to their current clients and offer a value add.
Speaker: Hey,
Speaker: Why don't you speak to these guys about a PEO and listen to what they have to say?
Speaker: On the other side, there may be brokers that have been trying to get into a business for the last eight, 10 years, and now there's something you can talk about.
Speaker: So they're not going to do it and say, hey, I'd like you to listen to this.
Speaker: And again, you're not competing with them as well.
Speaker: The first thing that direct sales force, and again, even being in this space, and there's a lot of great PEOs that sell directs,
Speaker: But when the direct sales force comes in, the broker gets on the defensive right away and is competing with you.
Speaker: If you remember that lunch we had in D.C., there was a broker sitting on the front row with a red circle with a line between it that said PEO.
Speaker: It was like a stop sign.
Speaker: Yeah.
Speaker: OK.
Speaker: And we had to turn him around because he just saw that as a threat.
Speaker: You know, these PEOs are coming to me and selling direct and taking away my clients.
Speaker: And they're a threat to me.
Speaker: Again, you know, when you're dealing with them, they'll actually bring you business.
Speaker: You know, you want to take away that threat.
Speaker: Hey, you know, we're not a threat to you.
Speaker: We're here to help you grow.
Speaker: We're here to be your, you know, we are a broker based PEO where, you know, you can trust that we're going to take care of you and provide you with the services to yourself and your client.
Speaker: Yeah.
Speaker: So they become an ally.
Speaker: Yeah, I know.
Speaker: Absolutely.
Speaker: And you've made it work.
Speaker: Do you have any internal sales staff or it's all brokers?
Speaker: The internal, we have a really internal wholesalers.
Speaker: The sales staff we have inside works with the broker.
Speaker: Okay.
Speaker: Okay.
Speaker: So again, they'll go on the appointment with the broker to explain or teach them what a PEO is.
Speaker: Again, if somebody goes on enough of them, they know how to do it themselves.
Speaker: They'll be involved in helping them get the data to put together the proposal.
Speaker: They're involved in helping them present the proposal.
Speaker: And then after the sale, they're also financially tied to the retention of the client.
Speaker: So that internal, I guess you could say sales associate, business development manager, continues to work with the client and the broker throughout the life cycle of the relationship.
Speaker: So they are sales, but they're not direct sales.
Speaker: Yeah, yeah, yeah.
Speaker: Interesting.
Speaker: And you still go on sales calls, don't you?
Speaker: Yes, I do.
Speaker: First of all, it's an educational message.
Speaker: I mean, I go on these calls because, again, I can find out what's happening.
Speaker: I can course correct my PEO by hearing what is coming directly from the public as opposed to filtered information that may come up through sales or through brokers.
Speaker: You know, somebody may turn around and say, hey, you know, we should be doing this.
Speaker: I've heard about, you know, client asked for this or prospect had for this one prospect, you know, but when you're out there on appointments and you're hearing it and you hear it more than once, you know, that, hey, this is something we have to offer or this is something we're doing really well.
Speaker: Let's continue doing what we're doing.
Speaker: Or this is something that a client or a prospect is asking that we do is even things now that continuously come up that if you hear it enough, you want to be able to course correct that we adapt with the client and we adapt with the market.
Speaker: The big thing, I guess my presentation is really education.
Speaker: As I educate the prospect as to what a PEO is and the services that a PEO provides start to finish.
Speaker: I even get after making presentations and I might have been the presenter, you know, third or fourth PEO that the prospect spoke to.
Speaker: They often come back and say, now I finally get what it is that this is.
Speaker: In the past, people were selling to them.
Speaker: Okay.
Speaker: Well, I wasn't selling, I'm educating.
Speaker: I've even been on presentations where I've said, I think the PEO is just a bad idea for you.
Speaker: It's not for everybody.
Speaker: And, you know, the prospect came back and said, that's kind of funny because the four people presenting it for you told us that, you know, we were getting a discount and we signed on by December, you know, and I was like, no.
Speaker: And I explained why it would be a really big mistake.
Speaker: And I referred her to a payroll software company and an HR consultant.
Speaker: It just wasn't, it was a home healthcare agency.
Speaker: It wasn't a great fit.
Speaker: what we did.
Speaker: But again, it's more of, it's important when you buy something or you, you know, you know, engage in a relationship with a vendor, you should know what they're doing, you know?
Speaker: And then again, you know, it's, and again, you know, it used to be, I'd say about, you know, 80% of it was pushed by benefits and about 20% was pushed by HR and compliance.
Speaker: Now it's about 50, 50.
Speaker: Really?
Speaker: Yeah.
Speaker: And even the clients that come on for benefits, when you send out customer satisfaction surveys to follow up with them as to, you know, what is it that, you know, you find the most valuable about the PEO relationship?
Speaker: It ends up being HR on compliance.
Speaker: So even if they came on for a different reason, a lot of what we do, they'll comment and say, hey, I'm never going back to doing this again.
Speaker: myself, you know, never bringing back this back in-house, they may move to another PEO.
Speaker: Yeah.
Speaker: Okay.
Speaker: But generally you'll find they're not going to bring it back in-house based upon the value of the services that we provide.
Speaker: Yeah.
Speaker: It's interesting on two points on compliance and on time, we find through our focus groups that those messages don't sell directly.
Speaker: going in when you say to people like hey we'll help you with compliance it will help you save time we don't care but when you go to existing clients and say what is the the best thing about a peo they say compliance and saving time but it's funny on the presentation if you present it the right way i do get a big hit on um compliance when you make the presentation you know you say you got to realize the average small to mid-sized business
Speaker: doesn't have the resources to hire a director of human resources or a compliance officer.
Speaker: But the liability is the same.
Speaker: You know, you have the same liability as a Fortune 500 company.
Speaker: You know, somebody comes in from an agency with a badge.
Speaker: They don't go, well, you only have 21 employees.
Speaker: Don't do it again.
Speaker: Okay.
Speaker: They fine you in the same manner they would fine a Fortune 500 company.
Speaker: And, you know, enforcement and compliance is at an all time high.
Speaker: And when we look across all the states, all the states are running deficits, they're broke.
Speaker: Raising taxes is political suicide.
Speaker: Okay, so let's just start finding the living daylights out of businesses for things that they just don't know to try to refill our state coffers.
Speaker: And
Speaker: You know, I know I know what auditor he's joking is I don't go after people that have people.
Speaker: You know, I go after your people, meaning my small to midsize businesses because the larger organizations have a staff.
Speaker: They know they can go into a small to midsize business and find a miss.
Speaker: So it's even more valuable.
Speaker: And if you present that to the prospect of that value in your presentation, they get it right away because most of them have had some sort of a scrape.
Speaker: Yeah.
Speaker: Yeah.
Speaker: No doubt.
Speaker: Absolutely.
Speaker: Absolutely.
Speaker: So you started with four internal employees and zero worksite employees.
Speaker: So what do you got now?
Speaker: Now we are about 219 internal employees, maybe 220 and pushing between 35 and 40,000 worksite employees.
Speaker: How'd you do it?
Speaker: I don't know.
Speaker: None of them ever called.
Speaker: None of them ever called to say,
Speaker: Call a PEO.
Speaker: Well, you know, Pat, come on.
Speaker: What do I do, Pat?
Speaker: Pat bought me a sign that sits in my office.
Speaker: Yes, I always get it backwards, but these selling the ungrateful.
Speaker: No, we do the impossible for the ungrateful.
Speaker: The impossible for the ungrateful.
Speaker: It sits right next to my desk, courtesy of Pat Cleary.
Speaker: The impossible for the ungrateful.
Speaker: That should be our logo.
Speaker: We should write that in Latin or something like that.
Speaker: But seriously, how did you grow?
Speaker: Organically, again, broker relationships, providing the differentiator.
Speaker: We definitely service our clients in a different manner than most PEOs.
Speaker: The team model that we provide, the hands-on, even though we're now a mid-sized PEO, we're still boutique-y, where again, it's a lot of hands-on service, maintaining our client retention rate.
Speaker: I mean, there are some years...
Speaker: in the past that we had 100% client retention.
Speaker: We've always been in the 90s.
Speaker: Again, you know, we're not just, I don't remember the relationship with brokers.
Speaker: You're not just accountable to the client.
Speaker: You're accountable to the broker too.
Speaker: If you lose the client, you've lost the broker and they're walking around telling everybody how bad and horrible you are.
Speaker: So there's a lot of checks and balances in the system as well.
Speaker: But it's been organically.
Speaker: It's just been continuously, you know, clients, you know, understanding the value of what we provide, providing the good service, being there for them, you know, especially through a number of different times, you know, troubles and times we've seen over the last three to five years.
Speaker: And they stay with you.
Speaker: Yeah, yeah, yeah.
Speaker: And so what is it?
Speaker: You touched on this.
Speaker: You know, obviously, you're in a competitive market in New York and you're in a lot of other states.
Speaker: But I mean, in New York market, it's competitive.
Speaker: What's I'd like to ask companies, what's your better mousetrap?
Speaker: What is it when you go in after three other PEOs to talk to them?
Speaker: What what's what do you have that they don't?
Speaker: Our principles, our value.
Speaker: You know, the principle here is that we expect our clients to be treated the same way we would expect to be treated if we're the client.
Speaker: Okay.
Speaker: That's our money.
Speaker: That's our principle.
Speaker: Education.
Speaker: Again, we don't sell.
Speaker: We educate.
Speaker: Okay.
Speaker: This is what this is.
Speaker: Okay.
Speaker: My pricing model, I'm not a bundle.
Speaker: I'm an unbundled pricing model, which sometimes, you know, can help you not help you.
Speaker: But again, it's, this is, this is what we do.
Speaker: And, you know, I can do 10 presentations and I'd say after at least three to four of them,
Speaker: You know, there will be a comment, like I said, why doesn't everyone do this?
Speaker: What's the catch?
Speaker: This is too good to be true.
Speaker: Yeah.
Speaker: OK, I can't believe I've never heard of this.
Speaker: You know, and again, and you look at, you know, prestige is an example in New York, an industry that no one knows.
Speaker: All right.
Speaker: Cranes, New York, publishes the largest 125 privately held companies in New York each year.
Speaker: And for an industry that no one knows what it is, we're number 17.
Speaker: So, you know, again, you know, it's it's just something for just the branding.
Speaker: But once people hear about it, if you educate it the right way and, you know, then there's, you know, there's prospects that say, no, this is not for me.
Speaker: You know, some know you run into a prospect that's doing payroll in-house.
Speaker: They're not even going to house less payroll yet.
Speaker: You think they're going to outsource the rest of this stuff to you?
Speaker: It's.
Speaker: what you say you're going to promise.
Speaker: Don't promise and they're not delivered.
Speaker: Okay.
Speaker: That, you know, that, that, that, you know, becomes a very short relationship.
Speaker: Yeah.
Speaker: Yeah.
Speaker: Yeah.
Speaker: It's interesting.
Speaker: And you touched on, we talked about, I've talked about on the podcast before somebody asked me, you know, months ago outside the industry, it was like, so,
Speaker: What do your people lead with?
Speaker: Do they lead with health care?
Speaker: Do they lead with workers comp?
Speaker: Do they lead with HR?
Speaker: And what do they start talking about first?
Speaker: And you just touched on it.
Speaker: I said, the best salespeople start by listening.
Speaker: And that's what you said.
Speaker: Like you want to be, you still do sales calls.
Speaker: One of the main things I admire about you, you're still out there.
Speaker: Because you get it unfiltered, you listen, you talked about it before, right?
Speaker: Sort of like you're educating people and you're listening to them, right?
Speaker: And it seems to me like that's a big part of the sales process that you don't just go in and say, do you want to buy a watch?
Speaker: Right now, right?
Speaker: And again, the sales associates, the business development managers that we have here that work at Brokers, all do the same thing.
Speaker: They come out to educate.
Speaker: Again, the sale will happen with the education.
Speaker: Client decides, this is something that's of interest to me.
Speaker: This is something that I need.
Speaker: This is a value to me.
Speaker: And then you come back and making a financial presentation.
Speaker: And that's also important to us.
Speaker: We like to spend that half hour, 45 minutes explaining what we do first, and then come back and make a financial presentation.
Speaker: Because if you make that financial presentation,
Speaker: okay at the same time that you're trying to make the value proposition presentation they're not listening to the value problem yeah let me see the numbers yeah let me see the numbers you know when you understand what we do the numbers necessarily don't make sense you know don't let me don't don't become a reason you know well you're only saving me a thousand dollars you know they never listen to the fact no i'm doing a lot more than that so you do really want to do this in a multi-step fashion where you really do educate and explain ahead of time so when you do make that financial presentation
Speaker: They understand what they're getting for, you know.
Speaker: Yeah.
Speaker: Yeah.
Speaker: We see it.
Speaker: We see in the focus groups where people are like, OK, so what's the plus number here?
Speaker: Like how much what am I going to have to pay for this?
Speaker: It's also the education process that you touch on is like, well, no, no, you're not.
Speaker: This isn't going from zero.
Speaker: You're already spending, right?
Speaker: It's going to cost you X for a PEO, but it's not additional money.
Speaker: You're already spending for all of these components, right?
Speaker: That you're not going to have to spend on anymore.
Speaker: And then you have our fee.
Speaker: But again, it's not a plus number, right?
Speaker: It nets out, right?
Speaker: And a lot of the time what happens is our aggregation, our purchasing power.
Speaker: I mean, that's the one thing we are.
Speaker: I mean, you know, we're purchasing master contracts across tens of thousands of employees.
Speaker: That offsets a lot of what, you know, our charges are.
Speaker: I mean, you're not looking, you're not paying a payroll service anymore.
Speaker: That's immediate and offset.
Speaker: So it's not exactly this number that you put out there.
Speaker: Like I said, our ability to negotiate definitely, you know, helps them financially.
Speaker: Yeah.
Speaker: Do you have you noticed any is a loaded question, but in the last 20 years, is there an increase in awareness or is it still like everybody?
Speaker: Nobody's ever heard of us.
Speaker: I do.
Speaker: That's increased.
Speaker: I mean, there's no question.
Speaker: I mean, you know, you went from, you know, asking someone if they've ever heard, you know, what a PEO is before, where most of the time you would say, no, I've never heard of it.
Speaker: Now you'd say, I'd say more than half towards three quarters of the time, someone has heard of what it is.
Speaker: Okay.
Speaker: But they don't, they still don't know what it is.
Speaker: And it's again, it's funny.
Speaker: Yeah, I've heard of that.
Speaker: It's this, this, it's so, it's HR outsourcing, it's whatever it is.
Speaker: And then, you know, when you do the education, that half hour, four, 25 minutes, they're like, wow, I never knew it was all that.
Speaker: So again, it goes a long time.
Speaker: Now that at least I've heard of it.
Speaker: You know, then I think, like I said, I had a law firm yesterday that I spoke with.
Speaker: They'd never heard of PEO before.
Speaker: And she was like, this is great.
Speaker: How do I get you the data to be able to see if this works financially?
Speaker: So again, the value prop up if it's there.
Speaker: Yeah, yeah, yeah.
Speaker: No, they get that, which is great.
Speaker: What's- You've come a long way.
Speaker: What's the biggest reason that people don't engage a PEO?
Speaker: What's the biggest reason that a sale doesn't happen?
Speaker: Like I said, first of all, earlier, if they're not outsourcing payroll, I mean, it's outsourcing.
Speaker: You've got to be able to let things go a little bit.
Speaker: So if you're still doing your own payroll in-house with a bookkeeper named Ida, okay, because that always seems to be the bookkeeper's name, okay, you're not going to go to a PO.
Speaker: You don't trust ADP or a payroll service to do payroll.
Speaker: You're not going to trust turning a lot of this stuff over.
Speaker: So that's definitely not a prospect.
Speaker: That's someone that's going to come away.
Speaker: You also like I said, there's businesses that
Speaker: Financially, not worth it.
Speaker: Just not.
Speaker: And then there's also businesses that don't fit.
Speaker: Okay.
Speaker: They just don't.
Speaker: Okay.
Speaker: Depends how you run your business.
Speaker: Depends on the different things that you want to do.
Speaker: There's clients also.
Speaker: I mean, you're retaining a PEO also to help you to keep you compliant.
Speaker: And then you get prospects.
Speaker: Well, I want to continue to do things this way.
Speaker: And we're like, well, you're not compliant.
Speaker: You can't continue to pay these people.
Speaker: You know, 1099, they're your employees, you know, and they don't want to listen.
Speaker: And that's not a prospect.
Speaker: You know, so you do want to cross businesses like that.
Speaker: And that's the decision that they make.
Speaker: But like I said, it's like I said, it's businesses that just want to let it go.
Speaker: Financial commitments or just, you know, they want to just do things their way and they'll continue to.
Speaker: Yep.
Speaker: Yep.
Speaker: So let me switch gears a little bit and talk about, obviously, there's a lot of M&A in this space.
Speaker: And I, you know, just because we're friends, I know you got like 10,000 phone calls over the last, you know, number of years looking to invest or buy prestige.
Speaker: What...
Speaker: What flipped the switch?
Speaker: What made it happen?
Speaker: That's a big decision, right?
Speaker: To decide to, I guess I should say, maybe not everybody knows that, that you guys sold or you got investors a year ago, maybe.
Speaker: Yeah.
Speaker: That's three years ago.
Speaker: Whoa.
Speaker: Boy, I'm old.
Speaker: Yeah, so talk about that process, that decision process.
Speaker: So what happened was there were four partners.
Speaker: Two of them were looking to retire.
Speaker: Okay, they were like, I've had enough.
Speaker: And we went through a process of, you know, what we were going to do.
Speaker: We looked at an ESOP.
Speaker: We looked at financing from inside so they could retire, which they did.
Speaker: Went through the process where, you know, went through a couple of different private equity firms that we were looking at and we went to do it.
Speaker: arrived at one trispan which we felt very very comfortable with um they at that point the two partners took an exit myself and larry remained i rolled over all my equity larry rolled over most days as well so we're still there okay and we control a large portion of the company
Speaker: uh from that point we were able to you know have some investment in in the company so what enabled us to uh you know grow in areas that we weren't able to grow or make investments within the company that we weren't able to make in the past and at that point also then we turned the other way around and we conducted three acquisitions in the last three years um strategically in different markets in different parts of the country that we already had a footprint but needed um to plant our flag and grow
Speaker: We're in the process right now of discussing three to four more.
Speaker: I'm going to have a conversation with somebody this week.
Speaker: And again, in strategic places or strategic locations, that will continue to increase our footprint across the country.
Speaker: Yeah, you are right, though.
Speaker: But, you know, the phone rings, my cell phone rings, you know, people calling you nonstop, you know.
Speaker: And that's really not the relation.
Speaker: You know, like I said, it's, you know, it does drive you crazy at times.
Speaker: Yeah.
Speaker: But, you know, again, we're looking for people on the other side where.
Speaker: they're looking to stay.
Speaker: I'm not looking for someone that's looking to exit their PEO and then just retire and go for the highest bidder.
Speaker: I'm looking for somebody that wants to become our partner and grow with us, roll some equity over, maybe take some off the table and continue to move forward.
Speaker: I'm not done with this industry yet.
Speaker: I still believe that we're just, we still haven't even
Speaker: You know, it's exciting.
Speaker: I was going to ask you, I totally agree.
Speaker: I was going to ask you, yeah, so what is it you look for in a company that you acquired?
Speaker: Again, first of all, they're a match.
Speaker: I mean, obviously, there's a lot of different things that go into it.
Speaker: What technological platform they're on, how do they run their business, what's the reputation of the owners, the principals, are they looking to stay?
Speaker: Like I said, you know, again, I'm not a believer.
Speaker: I mean, we're not looking for a company where, like I said, the principals are looking to exit and with them the relationships.
Speaker: Okay, we're looking for somebody that's going to invest or roll over alongside of us.
Speaker: and then continue to move forward, you know, continue to grow and continue to expand that footprint.
Speaker: And then, you know, eventually probably, yeah, well, I'm not going to die at my desk.
Speaker: No one on their deathbed is looking up at God saying, boy, I wish I spent more time at the office.
Speaker: It's got to be a time that we could enjoy life a little bit, but it's exciting, though.
Speaker: Yeah, yeah, yeah, absolutely.
Speaker: I mean, a lot of looking at that and the relationships and some of the camaraderie that we have through this industry that you know who these people are.
Speaker: You know you can work with them.
Speaker: You know you can trust them.
Speaker: They can trust you.
Speaker: You know, they're having a very comfortable environment.
Speaker: Yeah, yeah.
Speaker: Yeah, I agree.
Speaker: It's interesting to see that thread go through in terms of acquiring companies and what they look for.
Speaker: But I'll switch gears again.
Speaker: You've been incredibly involved.
Speaker: I mean, the day I got installed or voted on as the president of Navio at the Argonaut Hotel, I met you that night and wondered what the hell I got myself into.
Speaker: And so we've been friends ever since.
Speaker: But you've been so involved in Navio.
Speaker: You've got a full-time job.
Speaker: You're busy.
Speaker: Why?
Speaker: Why did you put all this time into the Industry Association?
Speaker: What made you do that?
Speaker: Move it forward again.
Speaker: You know, it was funny because at the beginning of, you know,
Speaker: my involvement with APO, I was almost, you know, there was a very close circle.
Speaker: Okay.
Speaker: It was people that had been involved, you know, on the board and on the different committees for a number of years.
Speaker: I had, you know, offered to, you know, even to join the healthcare committee at that point, having my benefits knowledge and was like, oh, committee's fault.
Speaker: We don't need anybody.
Speaker: I'm thinking, what kind of association is turning away volunteers?
Speaker: Okay.
Speaker: But it was very, it was a very close group.
Speaker: And what ended up happening was, was that I was at a, I came out to a board meeting.
Speaker: I remember it was in, I remember,
Speaker: It was in Park City, Utah.
Speaker: Yeah, yeah.
Speaker: I think it was Dale's.
Speaker: And, you know, they had just done a strategic plan.
Speaker: And I was like, there's nobody, nobody ever asks for anything.
Speaker: I mean, it's just the same group of ideas.
Speaker: And we were pretty much in the same place.
Speaker: Okay.
Speaker: And for the handful of years that I had already been around and involved, again, I was looking for
Speaker: maybe to crack the group and get in and, you know, be able to share some of the expertise that I had, especially because my expertise was coming from a complete different place that a lot of the P owners that were there had.
Speaker: And eventually I'm at that point that Dale, um,
Speaker: At that point, tapped me.
Speaker: There was a need to have somebody chair the state government affairs committee.
Speaker: Yeah.
Speaker: OK.
Speaker: And so I was like, here's the opportunity.
Speaker: Let me get into this thing.
Speaker: Not really is what I was getting into at that point.
Speaker: I was getting into a roof full of screaming cats.
Speaker: Every PEO in every state had their own agenda of what they wanted the money to be used for in their state to get their legislative certainty.
Speaker: And it was a very dysfunctional group.
Speaker: So it took it took about it took it took time to get everybody organized.
Speaker: And we did.
Speaker: It was it was very interesting how we did it.
Speaker: And I had turnover.
Speaker: Napio staff turned over on me.
Speaker: a couple of times to that process but i was chairman of state government affairs for five years okay um you know and from that point um you know from there uh you know eventually and it's funny because chairman of state government affairs at that point you know you did sit on the board of directors at napio so that was five years and i remember not missing i've never missed the board meeting yeah um and then from there i was on the board for four more years yeah
Speaker: Okay, because I was actually nominated and elected to the board of directors for four more years.
Speaker: And then from there, I was secretary, past, you know, chair, secretary, vice chair, chair.
Speaker: I've been on the board for a total of 13 years, which I think is the longest of anybody there.
Speaker: But the purpose of it was being able to, you know, share your voice and share insight.
Speaker: Always, you know, I've been on, I don't know, federal government affairs, healthcare committee, and I've probably been on eight to 10 different committees.
Speaker: Now I'm chairman of the
Speaker: CTO committee.
Speaker: But
