Thursday, November 19, 2009

Select Lessons from My Workshop

Because Pinnacle only hosts our 2-day Workshops a few times per year, I wanted to share a few 'high level', non-technical points of working with owners that were taught over the 2 days. It is my hope that this guidance assists you in your work with owner exits.

Owners are looking for comprehensive solutions

One of the key points to remember in any exit planning conversation or engagement with an owner is that the owner is looking for a comprehensive solution to the problem facing their exit. The largest challenge is that they do not exactly know what the solution is. It is your job to define what you can do for them, the process that you follow, and the result that they should expect. I told my audience that the success of each of my exit planning engagements with owners is dependent entirely upon one thing - how effectively I advance their thinking towards their exit. The planning process, tools and conversations are all designed to move the owner's thought process closer and closer towards a successful exit.

Owners are looking for objective advice

Although my primary mandate is to positively impact my owner's thinking towards their exit, there are always going to be ancillary products and services that are required to fulfill each owner's goals and objectives. It is important, however, to remember that you should not begin to discuss your primary offering - be it insurance, investments, tax, legal or business sales - until the time is appropriate. For Pinnacle students, this occurs during our 6th and final step in our process. At this point in time, the owner has be lead through an objective process to assist them in defining their goals, examining their readiness and exit options, and understanding whether or not they will reach their goals. When you follow the steps in Pinnacle's system, and do not jump ahead with your primary service or product offering, you remain objective and win the trust of the owner. And remember that trust is more difficult to get given the severity of the recent recession - it your job to win that trust, not the owner's job to give it to you. This begins with objective advice.

Owners do not sign on for a plan, they sign on for an exit

An interesting dynamic that occurs once you develop that trust is that the owner wants you to stay with them for the execution of the exit plan. Now, 'execution' can - and does - mean many differet things. Depending upon what is discovered during the planning process, you may put certain priorities ahead of others. For example, an owner with no (or faulty) estate planning may want to resolve this immediately, prior to engaging in the succession or business transfer process. Other owners will need to focus on different areas. What you should remember is that if the planning is done properly, owners will want to take action.

Business owners want to know that they will be able to take action and that you will be there to guide them. It is a valuable insight to know that when an owner signs on for an exit plan, they are not interested in a plan as much as they are interested in solving their exit needs. Remember this as you speak to and engage owners in this process.

The Owner's commitment to taking action is evidenced by the check that they write for the engagement agreement

Because exiting a business is such a difficult endeavor, you can be most effective in an owner's life when you get them to commit to this process with a payment for the engagement. This is important to remember as many who read this newsletter are in the habit of giving away a certain amount of information and service in order to win a valuable account or client. Of course there is a 'courting phase' in any relationship where you each invest time in getting to know one another. However, when it comes time for the exit planning engagement, you need to know that your owner is committed to the process that you want to walk them through. The greatest evidence of this commitment is the writing of a check for your time and service.

The Planning 'Crystallizes' the Owner's Thinking

By getting a commitment and presenting a comprehesive approach to the exit, owners can make a fully-informed decision about how and when they want to exit. When the process is followed, it empowers owners to move confidently in the direction of their exit. Pinnacle has a proven process that moves owners in this direction. Again, the definition of success for any of my engagements is how effectively I advance the owner's thinking towards their exit. Further defined, this means, how much the owner is coming to understand their goals, their current readiness, their exit options, and what they need to do to have a successful exit. A fully-informed discussion of an exit 'crystallizes' an owner's thinking and gets them moving in the right direction.

Like Snowflakes, Every Exit is Different, Stay Flexible

Although we use the same 6-step system for developing plans with all of our owners, each owner is different and each business is different, therefore we find that the execution phase of each engagement is unique. Exits are analagous to snowflakes - each one is different - no matter how many of them you exerperience. This is both a challenge and an opportunity for your advisory or consulting practice. The more flexibile you can remain in your engagements, the better you will be able to serve your owners. This type of flexibility requires patience, a key ingredient to all successful exits.

It Takes a Team

Although Pinnacle's exit planning process works to get owners moving toward their exits, it is always the case that other advisors need to get involved in the exit plan. Sometimes the other advisors are involved in the planning stage. Other times these advisors are involved in the execution phase. Either way, it remains true that no one can be an expert in all of the different practice areas. Therefore, you need to assist the owner in assembling these teams and you get to serve the role of quarterback if you so choose.


There is a great opportunity to grow your advisory or consulting practice by adding exit planning. These tips should assist you in being more effective with your engagements with owners.

To all of the attendees at the workshop, thank you once again for contributing to the success of these events. Together we are making a large difference to the owners that we serve.

NOTE: Our next workshops are scheduled for:

Tampa, Florida - Jan. 28th & 29th (
Boston, MA - March 18th & 19th. (location is pending confirmation)

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