The exit planning marketplace is changing with this new economy. I wanted to provides some insights as to my views on these current changes and how they may assist you with incorporating exit planning into your practice.
Having been in the exit planning field for 9 years, I have a unique perspective on this emerging marketplace. My company, Pinnacle Equity Solutions, not only provides education and training to advisors looking to incorporate exit planning into their practices, we also provide exit planning services for a select few business owner clients as well. And as we are slowing moving out of this recession, I see an increased interest and demand for exit planning services. And not just from business owners, but from advisors as well who want to learn more about exit planning and how it will help them grow their business.
The Marketplace of Exit Planning
There is no better time than now to get into this emerging field of exit planning. Although the economy may be slow to recover, the exit planning business is poised for tremendous growth. Baby Boomers are now coming to retirement age and are beginning to focus on what they need to be doing in order to protect their businesses as well as their wealth. They are 'awakening' to the idea that they need to get their equity out of their businesses.
I have often said that one of the largest obstacles to the exit planning business is the lack of context that an owner has in relation to how they should go about exiting. This is, in part, because up until recently, few if any advisors or consultants had chosen to focus on this area. Therefore, most owners do not know what it means to 'properly' exit their business or even what an exit plan truly is and what it can accomplish for their business succession. Business owners have not been educated on the importance of an exit plan. It is now the role of the advisor to begin these exit planning conversations and help guide business owners by implementing and executing a successful exit plan.
The Marketplace of Exiting Owners
Business owners today are more discriminating. They have been navigating through this challenging economy and have adjusted their budgeting process. Therefore, advisors need to provide a ‘genuine’ service. The marketplace has moved to a point of 'show me' instead of simply 'telling me'. This means that you need to approach the owners with a clear idea of what an investment in an exit plan (or at least an exit planning conversation) will mean to them. Without this type of impactful approach, most owners will not respond positively as it is still difficult for them to see the value in an 'exit planning exercise' without the advisor having a strong belief in the process and a way to message it to that owner.
Despite this obstacle, there remains no question that the marketplace for this service is picking up. In 2009, business owners were focused on survival, not an exit. But as we pass the half way mark of 2010, there is much more interest and demand for exit planning services. Most owners are beginning to feel that the worst of this recession is now behind them and that it’s time to plan for the future. I 've heard many comment on how they made it 'through this one' - meaning this most recent recession, but these owners do now want to go through the next one. This makes sense because these baby boomer owners will be in their '70s by the time the next recession hits. They need a plan, a solution, so they are in a position to successfully exit their business when and how they wish to do so. An exit plan empowers owners to do exactly this.
The Growing Marketplace of 'Exit Planning' Advisors
The objective for anyone who calls themselves an 'exit planner' should be the ability to provide solutions to the privately-held business owners that include an assessment of the owner's goals and enough objective and comprehensive information to allow that owner to make a fully informed decision relating to the exit from their business as well as the protection of their total wealth. Most importantly, advisors need to provide a process by which an owner can be guided towards the right decisions to have a successful exit.
In today's changing marketplace, it is essential for advisors to have the ability to sell exit plans with a 'proven' results-driven system and process that the business owner is looking for today. They need to have a comprehensive understanding of this marketplace as well as the ability to engage the business owner with these exit planning conversations.
I believe that one of the key essentials for true success in the exit planning field is to invest in a course of study and training. Expand upon your knowledge with all the available tools and resources and to begin networking and meeting with other advisors and consultants who have exit planning experience. Making all of these opportunities available to advisors around the country is Pinnacle's objective for our expansion in the 2nd half of 2010 . . . stay tuned for more exciting updates on these plans for expansion and how they can benefit your business.
The exit planning marketplace is changing with this new economy. Embrace these changes and prepare yourself to engage in this emerging field. Although exit planning is not 'new' anymore, it's still early in the game. There are many opportunities ahead as the marketplace continues to grow and business owners 'awake' to the idea of exit planning.
As always, I hope that this newsletter is helpful towards keeping you focused on exit planning and assisting you with putting it into your advisory practice.
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
Monday, August 30, 2010
Wednesday, August 25, 2010
Pinnacle's Upcoming 2-Day Workshops
Make time this Fall to attend one of our upcoming Exit Planning Workshops and be prepared to meet the growing demand for exit planning services.
2-Day Exit Planning Workshop
Thursday & Friday September 23rd & 24th
Mohegan Sun Casino, Uncasville, CT
www.exitplanninghartford.com
2-Day Exit Planning Workshop
Thursday, October 21st & 22nd
Downtown, Boston, MA
www.exitstrategytraining.com
John Leonetti will be hosting a FREE preview call to discuss the 2-day workshop and how this curriculum is vital to the development of your exit planning practice. He will be joined by Pinnacle member Joe Bazzano, who is co-hosting the Mohegan Sun event. Click below to register for this FREE call on
Thursday, August 26th @ 1:00 EST
www.exitplanningboston.com
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
2-Day Exit Planning Workshop
Thursday & Friday September 23rd & 24th
Mohegan Sun Casino, Uncasville, CT
www.exitplanninghartford.com
2-Day Exit Planning Workshop
Thursday, October 21st & 22nd
Downtown, Boston, MA
www.exitstrategytraining.com
John Leonetti will be hosting a FREE preview call to discuss the 2-day workshop and how this curriculum is vital to the development of your exit planning practice. He will be joined by Pinnacle member Joe Bazzano, who is co-hosting the Mohegan Sun event. Click below to register for this FREE call on
Thursday, August 26th @ 1:00 EST
www.exitplanningboston.com
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, August 24, 2010
The Life Cycle of Exit Planning
A number of months ago I wrote that Exit Planning was a disruptive innovation. What this means is that an idea - a technology, for lack of a better word - comes along and changes the worldview of certain players. This change in view takes time to be adopted by most. However, when the message - or technology - is strong enough, it breaks through and becomes mainstream and is widely adopted. This adoption cycle can be observed as a life-cycle for a new technology. We can view and predict how these types of innovations are adopted by looking back to certain other disruptive innovations, such as the automobile, cellular phones, or the Internet.
The exit planning industry is going through a similar life cycle and is on the verge of wide-spread adoption by the marketplace.
Four-Stage Technology Life Cycle
The adoption of a new idea by the marketplace of consumers can be illustrated as an S-curve, where three (3) stages of development occur. There is strong evidence that the exit planning industry is moving from the "Innovation Stage" and into the "Growth Boom Stage" of such a cycle.
The first phase of an a new product's Life Cycle is the "Innovation Stage". During this "Innovation Stage", the product or technology is expensive and more difficult to use and therefore only penetrates the more upscale and sophisticated users. This was true for automobiles (which none of us can remember), as well as cell phones and computers - which all of us can remember. I personally remember the first computer and cell phone that I owned. In fact, it's now laughable to think that in 1993 I used to have to worry about whether or not I shut off the AOL Internet connection because they charged by the hour. Not to mention the weight of my first cell phone, as well as the cost of my first computer. Despite those short-comings, adopting those technologies early, was empowering because a new way of working, connecting and communicating was developing and it helped greatly to be involved early on in these changes.
Once the product or technology is proven in such niche markets, it starts to become more affordable and accelerates rapidly into the mainstream . The first phase of this acceleration is called the "Growth Boom Stage" where exponential growth continues. This phase attracts many new products and companies, and they eventually expand too quickly and create excess capacity.
It is amazing how far we can advance in such a short amount of time when more and more industry players are focused on product development and improvement. This is what happens when a new product or innovation is widely accepted. Prior to that time period, it is the early adopters who disproportionately benefit from the use - or production and sale - of the product.
Today's Exit Planning Industry
I have the unique benefit of seeing the exit planning business emerge. My book, Exiting Your Business, Protecting Your Wealth - A Strategic Guide for Owners and Advisors [John Wiley & Sons, 2008] has now been selling for two (2) years and, with thousands of copies in the marketplace, and hundreds of professional advisors in our network of Membership, Workshops, and Chapter meetings, I am in a special position to observe and report on the state of the exit planning industry.
I believe that the Exit Planning industry is heading quickly towards the Growth Boom Stage where exponential growth occurs. I see this shift occurring in the next year to two (2) years, as our economy recovers and the Baby Boomer business owners begin to focus, in mass, on the need for them to exit their business.
Remember, the generation ahead of the Baby Boomers had the Boomer children to take over their businesses. These Boomers are too large a group (meaning the generation X'ers are fewer in total number) and the mindset of Generation X is not generally towards business ownership. This leaves fewer 'buyers' than 'sellers'. And, given our protracted recession and the need for these Boomers to monetize their largest asset, the demographics and economic cycles are also driving this demand.
Our 10-year transfer cycles (which has been written about in past newsletters) predicts that our economy, and a stable environment for business transfers, is coming over the next one to two (2) years - coinciding with the S-Curve for new product Life Cycles, and completing the evidence of a growing demand for exit planning services.
How You Can Get Involved
Your business owner clients and prospects need to hear this message so that they can stay ahead of the curve and be prepared for their exit. You have the opportunity to bring this unique service to your exiting owners once you have a solid system to work with, tools for discussion and presentation, and, perhaps even a deliverable to accompany the conversation.
I encourage you to join the hundreds of advisors who have benefited from Pinnacle's 2-day workshops to educate themselves on the marketplace of exiting owners and to incorporate exit planning into their practices. We have an upcoming workshop preview call that describes all of this and I encourage you to attend to learn more about how you can more effectively make exit planning a part of your business.
www.exitplanningboston.com
As always, I hope that this newsletter is helpful towards keeping you focused on exit planning and assisting you with putting it into your advisory practice.
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
The exit planning industry is going through a similar life cycle and is on the verge of wide-spread adoption by the marketplace.
Four-Stage Technology Life Cycle
The adoption of a new idea by the marketplace of consumers can be illustrated as an S-curve, where three (3) stages of development occur. There is strong evidence that the exit planning industry is moving from the "Innovation Stage" and into the "Growth Boom Stage" of such a cycle.
The first phase of an a new product's Life Cycle is the "Innovation Stage". During this "Innovation Stage", the product or technology is expensive and more difficult to use and therefore only penetrates the more upscale and sophisticated users. This was true for automobiles (which none of us can remember), as well as cell phones and computers - which all of us can remember. I personally remember the first computer and cell phone that I owned. In fact, it's now laughable to think that in 1993 I used to have to worry about whether or not I shut off the AOL Internet connection because they charged by the hour. Not to mention the weight of my first cell phone, as well as the cost of my first computer. Despite those short-comings, adopting those technologies early, was empowering because a new way of working, connecting and communicating was developing and it helped greatly to be involved early on in these changes.
Once the product or technology is proven in such niche markets, it starts to become more affordable and accelerates rapidly into the mainstream . The first phase of this acceleration is called the "Growth Boom Stage" where exponential growth continues. This phase attracts many new products and companies, and they eventually expand too quickly and create excess capacity.
It is amazing how far we can advance in such a short amount of time when more and more industry players are focused on product development and improvement. This is what happens when a new product or innovation is widely accepted. Prior to that time period, it is the early adopters who disproportionately benefit from the use - or production and sale - of the product.
Today's Exit Planning Industry
I have the unique benefit of seeing the exit planning business emerge. My book, Exiting Your Business, Protecting Your Wealth - A Strategic Guide for Owners and Advisors [John Wiley & Sons, 2008] has now been selling for two (2) years and, with thousands of copies in the marketplace, and hundreds of professional advisors in our network of Membership, Workshops, and Chapter meetings, I am in a special position to observe and report on the state of the exit planning industry.
I believe that the Exit Planning industry is heading quickly towards the Growth Boom Stage where exponential growth occurs. I see this shift occurring in the next year to two (2) years, as our economy recovers and the Baby Boomer business owners begin to focus, in mass, on the need for them to exit their business.
Remember, the generation ahead of the Baby Boomers had the Boomer children to take over their businesses. These Boomers are too large a group (meaning the generation X'ers are fewer in total number) and the mindset of Generation X is not generally towards business ownership. This leaves fewer 'buyers' than 'sellers'. And, given our protracted recession and the need for these Boomers to monetize their largest asset, the demographics and economic cycles are also driving this demand.
Our 10-year transfer cycles (which has been written about in past newsletters) predicts that our economy, and a stable environment for business transfers, is coming over the next one to two (2) years - coinciding with the S-Curve for new product Life Cycles, and completing the evidence of a growing demand for exit planning services.
How You Can Get Involved
Your business owner clients and prospects need to hear this message so that they can stay ahead of the curve and be prepared for their exit. You have the opportunity to bring this unique service to your exiting owners once you have a solid system to work with, tools for discussion and presentation, and, perhaps even a deliverable to accompany the conversation.
I encourage you to join the hundreds of advisors who have benefited from Pinnacle's 2-day workshops to educate themselves on the marketplace of exiting owners and to incorporate exit planning into their practices. We have an upcoming workshop preview call that describes all of this and I encourage you to attend to learn more about how you can more effectively make exit planning a part of your business.
www.exitplanningboston.com
As always, I hope that this newsletter is helpful towards keeping you focused on exit planning and assisting you with putting it into your advisory practice.
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
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