Wednesday, September 30, 2009

Talking the Language of 'Exits'

In my last newsletter I introduced the No Owner Left Behind initiative that is inspiring Pinnacle's upcoming Certification Program. Those who are gathering behind this cause know that today's business owner is largely without a solid plan for the exit from their business, despite the fact that it is the most important financial (and lifestyle) transaction of their lives. As advisors, the delivery of this message begins with an 'exit conversation' with your business owner prospects and clients. This is where the 'rubber meets the road' - whether you are willing and able to begin this conversation and to follow through on delivering this solution to owners. Today's topic, therefore, is 'talking the language of 'exits''.

The Exit Conversation

From the outset, it would appear to be a simple enough question for you to ask an owner - simply 'have you thought about how you are going to exit your business?' In fact, my experience shows me that most advisors are reluctant to ask this question because they do not have a solid foundation to hold the conversation.

Well, that is what our training program and materials are built to do for you, but I wanted to give you some tips on how to make these exit conversations more effective for both you and your owners.

Convincing versus Compelling

When you begin to ask the exit questions, you need to ask yourself whether you are being "convincing" or "compelling" with the series of questions that follow the initial one. People ask me all of the time how I get certain results with owners. A large part of being effective is avoiding being 'convincing' - which means simply stating the facts and reasons why an owner should have an exit plan. Rather, you need to have a "compelling" way of presenting this material.

Like most decisions that are made, the decision to plan an exit is largely an emotional - not a logical - one. You need to understand this concept and prepare for these conversations in the right way. You need to be able to have enough information and deliver it in the right way to motivate your business owner to take action. For better or for worse, this is not usually accomplished through the simple delivery of facts and statistics. Your experience and stories of owners who did not plan for their exit are very helpful. Remember that your owner has worked their whole life to get to where they are. For a small fee and a bit of their time, you are in a position to move their thinking towards and exit - away from the simple running of their business alone. Delivered properly, the conversation should conclude with the business owner now having a compelling reason (or reasons) to take action.

Serious consideration and preparation should be given to this level of conversation to determine how to deliver it. With today's recession looming in each owner's mind, you need to be innovative and reconstruct your approach appropriately. Your primary objective is to assure your owners that you want to help them with their exit as well as protect their illiquid business wealth. Creating trust and assurance that you have the tools and knowledge to guide the business owner through their personal and business exit planning builds your clients' confidence in you and motivates them to take action through your compelling delivery.

Building Value Into Your Conversations

In order to be compelling you need to learn to build value into your conversations. The key is to ask the right questions at the right time. As an advisor/planner you need to look beyond any single issue that may be most important to you and ask what it is that the owner cares the most about. This basic idea of being 'client centric' is essential for this initial conversation.

Because of the lack of awareness and the owner's psychology in dealing with this issue, I often say that business owners 'do not know what they do not know'. Hence, the need for you to open the conversation and help them understand that with proper planning options are available to them to help with their exit. Communicating with your business owners about the problem that they are about to face and the benefits of agreeing to exit planning adds value. If you exude confidence and reveal that you are a well trained individual, your relationship with the business owners will grow quickly as they immediately sense that you are bringing value to their lives.

Owner Coming to Their Own Conclusions

One of the most intricate and challenging areas for delivering this exit conversation is your ability to be patient as your owner comes to their own conclusion about the steps that they need to take. If you have delivered merely a 'convincing' reason for them to move ahead, they will likely delay coming to a conclusion about moving ahead. However, if you have presented a "compelling" reason for your owner to advance, you have aided them in an important way in seeing more clearly the reasons for planning their business exit.

Business owners care about results, not rhetoric. It is the emotional connection that you create with them and the language you utilize that helps them to see the error in not planning for their exit. Owners have made their own decisions throughout their careers. They will decide to plan for their exit once you have presented the material in a way that allows them to conclude that an exit plan is both necessary as well as beneficial for them. You cannot force-feed this material to owners.

Making a Commitment to the Process

You will know that things are really happening with your exit conversations when owners begin to move ahead with you. In my work with owners, I require a retainer check in order to begin our work together. Interestingly, the retainer check represents much more than payment for a service - it represents the owner's commitment to take this process seriously. This, more than other part of the conversation, is critical to a successful exit. The owner needs to be invested in the process and ready to accept your guidance as they navigate this complex journey.

You will know that you are really "talking the language of exits" when you begin to generate results in the form of owner commitments to the process. You build on each conversation with every owner in order to strengthen you abilities to have these conversations. Your exit planning practice grows exponentially once you discover the right mix of facts and stories to help motivate your owners to take action.

In closing, the battle for exit planning is taking place at the initial conversation stage. "Talking the language of exits" is most important today in order to deliver this important message to owners. I look forward to sharing more on this topic with those attending our Nov. 5th & 6th Workshop in Boston.

Wishing you the best of success with your exit conversations.

Specializing in Business Exit Strategies, John M. Leonetti, Esq., M.S. Finance, CM&AA founded Pinnacle Equity Solutions to provide advisors with the tools they need to incorporate Business Exit Planning into their advisory practices. To learn more about John's Exit Strategy Services and to receive a FREE copy of his special report, "How To Incorporate Exit Strategies Into Your Advisory Practice", visit Pinnacle Equity Solutions

Tuesday, September 29, 2009

Workshop Preview Call - Thursday Oct 1st at 4pm EST

I want to thank the dozens of advisors who registered for, and listened to, my first Preview Call that I hosted for our upcoming Workshop in Boston on Nov. 5th & 6th. The early registrations for this event are making it our best attended workshop yet. We have brought the pricing and the hotel accomodations to the lowest price point possible in order to encourage you to take advantage of this offer so that you can begin incorporating exit planning into your business!

If you would like to learn more about Pinnacle's exit strategies services as well as our upcoming 2-day Workshop in November, I encourage you to register for the second preview call I will be hosting Thursday Oct 1st at 4pm EST.

This FREE preview call will focus on Pinnacle's 6-Step Process for designing a successful business exit. Pinnacle's 6-Step Process also serves as the foundation for the successful growth of Pinnacle's educational, certification, and coaching programs for advisors. I will also provide you with a sneak preview of all the great educational and business building content we will be teaching at our wildly popular Two-Day Exit Strategies Training Workshop, being held this November 5th & 6th in Boston, MA!

Exit planning continues to be one of the hottest topics amongst professional advisors today - and the needs of the Baby Boomer generation of business owners is only growing !!! This emerging 'exit planning' space in growing faster every day . . . become a part of it by getting up to speed on the latest developments. Start with this week's Workshop Preview call!

So, join us for this FREE Preview Call this Thursday, October 1st, at 4:00 EST

Click here to register for the call

Specializing in Business Exit Strategies, John M. Leonetti, Esq., M.S. Finance, CM&AA founded Pinnacle Equity Solutions to provide advisors with the tools they need to incorporate Business Exit Planning into their advisory practices. To learn more about John's Exit Strategy Services and to receive a FREE copy of his special report, "How To Incorporate Exit Strategies Into Your Advisory Practice", visit Pinnacle Equity Solutions

Tuesday, September 15, 2009

No Owner Left Behind

With the global recession showing signs of bottoming, I believe that it is time to take strong action in rescuing the private business owners from the 'mousetrap' in which they have caged their illiquid wealth. Last week, in a moment of inspiration, I created the No Owner Left Behind initiative. This is a theme around which Pinnacle will focus its upcoming Certification and training efforts - let me explain a bit more.

In 2001 President George W. Bush passed the No Child Left Behind Act. The NCLB enacted the theory of standards-based education reform, which is based on the belief that setting high standards and establishing measurable goals can improve individual outcomes in education.

If you have been a part of the exit planning community for any length of time, you have invariably been challenged with consistently marketing, selling and delivering this service to owners. I know this because so many advisors come to Pinnacle for our coaching and support, having previously struggled with implementing exit planning into their business.

I shared with my Certification Committee last week that that we are going to code-name Pinnacle's Certification initiative the No Owner Left Behind program. Behind this notion and program is the idea of setting high standards for the education and business of exit planning along with establishing measurable goals and benchmarks that exit planners - and advisors who want to include this in their offerings - can rely upon to grow their practices. This will help to assure improvements to the deliverables and advice that owners receive regarding this critical planning area.

The exit planning profession is in strong need of such efforts. As many readers of this Newsletter know, the exit from a business is a very challenging task. Pinnacle has 16 critical points that our Certificate holders will need to master - these are 'must haves' for any advisor who wants to achieve this designation.

Let's take a look at a few of these initial points - areas where most owner exits go wrong - as a starting point for this reformation effort and where standards and benchmarks can be implemented:

The Need in the Marketplace Matched by Unrealistic Expectations/Lack of Awareness by Owners

Owners do not have the information that they need to set realistic expectations for their exit. This is first issue that needs to be addressed by advisors to exiting owners. Within this first category, some of the sub-issues that need standardization and benchmarks are:

  • The time and complexity involved with an exit

  • The realistic range of values of the owner's business

  • What is required for managers to step into leadership roles

  • What is required of the owner to empower these managers

  • The owner's personal savings habits and their ability to maintain their lifestyle without the business.

  • The owner's ability to maintain a meaningful and productive life beyond the business exit.

Standards and tools need to be further developed for advisors to communicate these issues to owners, impressing the importance of each one to the owner's future exit. Without sharing these critical points with our exiting owners, many owners will continue to be left behind - stuck in their businesses, suffering with their unrealistic expectations.

The Expansive Nature of Exit Planning

The next area of standardization has to do with what goes into an exit plan. The fact of the matter is that, done properly, exit planning is a complex and comprehensive process. There are so many areas of an owner's life that are impacted by the exit that it is necessary to have a 'planner's eye', to be able to understand all of these areas and provide a complete solution to the owner.

The problem is that every area of examination - be it savings, investing, retirement planning, estate planning, tax planning, business planning, transactional work, etc . . . all are disciplines unto themselves. So, how can any one advisor provide an exiting owner with this type of overview of their needs for an exit?

Again, the answer comes down to standards and benchmarking for an overview / understanding of all of these areas. The key is knowing which items are essential to any exit and how you can identify these issues. From there, it is important to assess which advisor(s) on the owner's team can complete the necessary work. How you, the exit consultant, make these assessments, communicate with those other advisors, and deliver solutions to your owners will, for the most part, determine the success of your owner's exit.

Do you have procedures and tools in place to address these issues?

Are you prepared with the right questions and deliverables to make your exiting owners comfortable with your process?

Getting Beyond the Struggle

These are two (2) of the sixteen points that Pinnacle's new No Owner Left Behind and Certification Program will address. A well versed exit consultant will ask the right questions to get to the most important issues that address both the owner's personal and business goals.

I continue to be amazed by the high quality of advisors who are drawn to exit planning, which is reflected in the great number of conversations that I have with advisors and consultants who are doing this work today.

Almost every conversation includes some level of doubt in the advisor or consultant's mind as to whether they are completing a full examination of their owner's situation. In almost every case, it is my opinion that the advisor or consultant has so much more than they need to be effective in the conversation with their owners. What is missing are standards and benchmarks by which this competency can be measured.

Now that the summer is winding down and we are all getting back to work, I encourage you to set these standards and goals in your own practice. Think ahead to what your owner's needs will be. If you are looking for additional support in this area pay close attention to our upcoming announcements as I and my Certification Committee are inspired to deliver to the marketplace a formalized set of standards, training, support, curriculum, and coaching to further empower any advisor or consultant who wants to help an exiting owner with this specialized need.

So together we are on a mission to Leave No Owner Behind. Let's not allow the aging Baby Boomer generation of owners to sail into the sunset without direction or navigation. Let's continue to build value into our conversations with owners, earning the right to guide them through this difficult exit process. When the work is complete, we will bring order to this emerging field of exit planning and move our owners towards the exits that they deserve.

Specializing in Business Exit Strategies, John M. Leonetti, Esq., M.S. Finance, CM&AA founded Pinnacle Equity Solutions to provide advisors with the tools they need to incorporate Business Exit Planning into their advisory practices. To learn more about John's Exit Strategy Services and to receive a FREE copy of his special report, "How To Incorporate Exit Strategies Into Your Advisory Practice", visit Pinnacle Equity Solutions