AM&AA Winter Conference 2016 - Value Growth Session: Keeping & Winning Long-Term Clients

Welcome. This section on the value growth track is called Winning and Keeping Long-Term Clients. Our speakers today are Michelle Monohoum, far on my left, She's an organizational value growth consultant, a certified M&A advisor with Vision One High Performance Group. Also on my left is John Lawler, who's the principal at Practical Decisions. And to my right is Terry Shepherd, a CM&A CPA, MST, and the principal, a principal of ROCG. Welcome to our session. I'm Carrie Sauls, the managing director of This Way Out Group. What we're here for today, we just want to have— lay out some of our assumptions first so that we're all on the same page with you. So we think that lots of people are looking at the boomer demographic as a real opportunity to grow their business. Everyone in this room, we are assuming, wants to be that most trusted advisor. Is that a correct assumption? Would you just give me a raise of hands? Okay, we've got some people who are still on the fence. We think you're interested in learning about exactly how do you go about doing this, and we believe that it's a great opportunity for you to be able to reposition yourself and your services to clients. That's what we think we're trying to help you with today. Some of the facts that we know are that, and I'm not gonna read all of them, I just wanna highlight why we think this is a great opportunity for you. Of private business owners' wealth is tied up illiquid in their businesses. 80% of these owners are not currently increasing the value of their business. 42% of all small business owners have no plan or a path to the retirement that they think they want. We also know, this is from a recent study from U.S. Trust, their advisors, their wealth advisors doing this survey found out that advisors were hearing a consistent, passionate message that early planning and enhanced education, which we were just addressing in the last session, about exit options and the exit process were in great need. And this came out a number of years ago from the XPX Summit, Exit Planning Exchange Summit in Boston. 75% of businesses who seek out industry experts have no plan and they don't know what to do with the business when they do want to exit. They don't know what it's going to take, but they do want to exit fast. So there's a need and a want and no solution or path to get there. We recognize the market risks. We've been talking about the ones that are in the most recent study from Pepperdine, but— and another one that Terry just mentioned in the last session. There are 10 million less people coming up behind baby boomers to take over these businesses. What will people do? But the owners are consumed with their operational roles. They're killing their businesses by only building an income stream and not growing an asset. Their maximum success in terms of growth, value, and liquidity, it really will take 3 to 5 years, and most of them don't want to hear that message. They're not interested in working at it for 3 to 5 years because they think it's all on their shoulders. So it's our job as advisors to educate them on the benefits of this longer planning and execution. And that's where, by becoming that most trusted advisor, you're demonstrating to them that in that relationship with you, all of this is possible for them. 6 months of advanced planning and receiving only 50 to 70% of the value of their business is a— is a consequence of not taking the time or having the right advisors around you, and it's totally preventable if we can engage with them. What we're suggesting is that instead of being a product vendor or a value-added supplier where all you're looking for is client satisfaction, that you raise the bar in everything you do and how you do it to becoming that provider that gains customer loyalty so that you're providing beyond that solution, you're becoming the trusted advisor because you're going beyond just meeting their needs, you're gaining their commitment to that long-term solution. We know that clients are looking for something different. We keep hearing it. This whole board, when we were preparing for this conversation, it was one of the biggest points they were telling me is that clients want a sounding board. They want sheer honesty. Not just what they want to hear, but what they need to hear. They need you to be more of a solution provider, not just backward-looking but forward-looking, and they need someone they can trust. So we came up with 3 keys for how you can win and keep those long-term clients. First, do more for your clients, which can mean changing your stripes. Not necessarily wearing new hats, but rather what you do and how you do it. Number 2 is offer a more holistic solution, not just one piece of the pie, but the complete solution of what they need. And then advise those clients about the future, about what that future looks like. Along the lines of what Chad was alluding to in the previous, previous session, help them paint the picture of what that future could look like. So we're gonna go back to these and ask my panelists for their insights of what works for them. So for the first one, do more, change your stripes, I'll start with Michelle. Michelle, what's it going to require? What should advisors know? What's going to be involved for them to take a different approach to do this?

Well, with us, we, we work with our clients typically on retainer for about 3 to 5 years, and then ongoing we have residual work. and so we become an advisor by looking at their whole operations. And in order to do that well, we partner with other people in both the transaction side and in the value growth side to be able to help them. And so what we see from that is by partnering with them and by working with those customers long-term. We're able to— you had talked about, you know, owners want to have a sounding board, and so we're able to become that sounding board, and we're able to become an integrated sounding board because as a team we're going in and working with that client. Also, because of that lifetime focus on the client, there's, you know, there's larger revenues, so there's some benefit as, you know, as an advisor because you can You can continue to earn revenues. But I think also it's a benefit because we can all, as an advisory team, focus on our key strengths. So we can, we can serve the customer as a whole, meet their goals, their long-term goals. And then through that, it creates a robust network because we've gotten to know each other. We know how each other works. And so were able to continue referring each other business. So there's a lot of advantages to advisors becoming that trusted advisor.

John?

So I'm glad I sat through the first session today, because I realized I'm a bit of an anomaly here. Most people here are involved in one side of the transaction or the other. I don't sit in either side. I'm a business advisor. I started 12 years ago on my own, hung a shingle, and realized I was a business improvement specialist before value growth was the buzzword. Right. By the way, is my makeup okay? It's hot up here. These lights are— so I look at this a little bit differently, I think. And I look at winning winning and keeping clients is very different propositions. Alright, so my points on winning clients are the first thing you have to do is don't sell them. If you're selling, it's much harder. The second one is, in other words, rather than sell, let's have a conversation. Let's sit down and talk about what you're trying to do and let me figure out if I can understand what it is, the challenges you're facing, and whether or not I can help. And part of that is a very, you know, you just ask a lot of questions, and it's a different way to approach it. For me, the second thing is that you focus on the client. You know, we talk about this ecostructure. I think if we focus on the client, the deals will follow. If we go in talking about the deal, the customer thinks that you're focused on the deal. Focus on the client. Focus on them from the standpoint of who are they as a person? What's their family life? Where are they financially? Where are they emotionally? So if, if, if they decide to sell their business and they walk out the door on Friday, what are they doing Monday? Because they've been for 40 years, they have a routine, they have a life. It's called a business.

All right.

And the other thing that I strongly encourage everyone to do and Carrie has seen me do this before, 'cause I've done it through chambers, but I really encourage everybody to be comfortable with your pitch. You know, when someone says, what do you do? Well, I'm a transaction advisor, I'm a business consultant. No, no, what do you do? That's a label, right? What I do is I take the stress out of the idea of exiting your business, not knowing what your future looks like. I help you plan it, identify your goals, and help you get there. For me, based on my personality and what I've learned of myself for the last 12 years of really being on my own, is that's easy for me because I'm motivated through other people's success. Not all of us are, so be comfortable with yourself and figure out how you're going to play the role and what role fits you. But for me, that's really about seeing clients and picking the ones that are motivated to really make a difference in their own life. Right. You guys all have clients you don't want. Don't take any more on. Get the ones that are really motivated. That's where I find the most success. Right. If I were to look at a success factor, being a really a trusted advisor is I'm the first person they call in the middle of the night when they can't sleep. Because they're worried about how they're gonna make payroll, or the fact that they thought about something else in the future, or their wife calls and says, you know, your client, my client, was supposed to be home at 2 and he's not home yet, and I'm really worried. He was at this. To me, that means I've won that trusted advisor role. So those are some of the keys for me in winning. We'll talk about keeping. After.

And Terry.

I think I saw a lot of people put their hands up saying they want to be the, that kind of advisor that's at the very top of that pyramid, but I understand now why Javi got up because I can't see a bloody thing out down there. So from my perspective, I've been doing exit and transition planning for the last 12 or 13 years and The problem or the issue that I see facing all of us right now is because of the opportunity with the boomer generation, there are more and more people throwing their hat into the ring and becoming opportunistic advisors because they see an opportunity to make a little bit of money without really doing their homework. Quite a few times I have been the second or third consultant brought in because they have not provided the solution that the client has asked for or what those goals and objectives were. And they were more interested in selling whatever they were carrying in their back product— back pocket. So if you're seriously thinking about getting into the transition exit advisory space, then know there's a lot of different work that you need to do than what you're doing now to really have a difference or make a difference on these individual owners and their families' lives. And there's so much at stake for those families, as you saw by the statistics that, that Carrie went over, of having substantial amount of their personal net worth tied up in their business that just to try to make a little bit of money, or as I say, to wing it, to give it a whirl, and you're putting this business owner and their families at risk after all these years of hard work, it's just not the right thing to do. So if you're going to be going in and working in this advisory position, then you need to take a look at exactly what's involved. Because it's not just about creating value, and all I heard in the first session was creating value, creating value, 1 and 2 years. My plans historically are taking 3 to 5 years because that's what the business owner wants. He's not ready or she's not ready to go out now, so it's not just about the transaction, and that's where this long-term relationship and keeping these clients is where you can make a big difference in your own income stream. My clients are a minimum of 3 to 5 years. Substantial money is to be made in the planning process, and that's planning not only for the business to increase value, but their personal planning aspects to make sure that they have something to go to on that Monday, to make sure that they've thought about, am I gonna go a part-time job, am I gonna buy another business, am I gonna work as a consultant, is it gonna go nonprofit? To do some trials before we get there. Because that's truly when their transition is successful, when you reach all their goals and objectives, and it's not just about the money when they come out. Because I know a lot of miserable people that have a lot of money, as I'm sure all you do. It's really about having peace of mind and doing the right thing, and that requires a lot of tough emotional conversations with the owner and their significant other. And a lot of advisors that I have seen are so left-brain analytical that they are quick to divert from asking those questions when they see any kind of uncomfortableness. And that does a disservice because you're not really finding what their true values and objectives are that's going to bring them the greatest satisfaction. So, but my success, what I like to see as success, is not only increasing the business value and making it a sustainable enterprise going forward for either the family, the management, or for the next owner, but also to make sure that the owner and their significant other is getting exactly those most important goals reached. It's ascertainable. There's no disillusionment after the sale They know exactly if they have enough money or don't have enough money because they've done a personal action plan over those 3 or 5 year time period as well as that business action plan. So if you're going to come into this space, then you need to know that there's a lot more involved than just whatever you're doing now as a business consultant.

Perfect. Moving on, our second point is that you have the opportunity to offer a holistic solution. So I'd like each of our panelists to explain to us what does holistic look like in your practice. John, we'll start with you.

Oh, I get to go first this time. Okay. So holistic to me, and I think someone in the first group mentioned it, but I look at holistic as, um, the idea of sitting at a point high enough enough knowledge to be dangerous, to understand all the steps that are in a process related to achieving a business owner's goals, whether it's the exit or post-exit. And I'm going to stand up for a minute because I keep trying to look over there and I can't see you guys. So holistic to me is about— and this is where I often find that as a business advisor, other advisors don't want me in, or they're very uneasy uneasy about it once I do get in, because it's change, or they figure I'm going to bring my guys in, or those types of things, when in reality my role, and the role that I play with my clients, is to help them get the best out of their advisors. And quite often, after a little bit of time, those advisors say, I'm glad they brought you in, because we are finally getting some things done that we've been talking about for years and never made decisions on. All right? So, there's a benefit to to it. For me, holistic is really looking at that full picture, and it's a model that involves the emotional intelligence, the financial— personal financial planning, and their business planning, the valuation. Right? Terry mentioned a couple things about what they really want at the end. That's what drives everything. Right? That has to drive everything. And being holistic means if I'm looking at the business, well, you need a complete team. You know, you need a leadership team. You need a sales team. You need a marketing team. And if they don't have it, where do you get it? If you look at their life consultants, okay, they need a really good attorney. They need a really good insurance person. They need a good, you know, all those players that are involved. And my role is that I usually sit next to my client and I just make sure they're clear with their objectives, holding those advisors accountable, and and making decisions on those. So holistic to me is just that big picture and having enough knowledge to be dangerous, to know what the key points are and make sure that people are doing them all.

We'll go back to Terry on this one.

So I guess really just expand on where I had left off of for our practice and our processes that we had put together. It's doing the analyticals on the personal of where they are as far as a personal net worth and what agreements they might have, if they have estate planning, life insurance, disability, etc., besides the business analytics before we have our first meeting. So we have a good feel of what's realistic and not realistic when sitting down with the owner for the first time in the management group, if that's what is called for at the time. But I really start off with the personal planning, and I want to make sure that we've identified again those values and objectives because that's what should be driving business decisions going forward. The business should become a vehicle for that end in mind, and the business oftentimes just becomes the end in mind and they stop there. Business controls an individual life. At this time of people's lives, it's time to switch that around. And I start going into making sure I understand what those personal goals and objectives are and asking those "what's it all about, Alfie?" questions that I've developed over the years. And it pulls off a lot of things that they're unaware of, and it's a discovery process. We also do the analytics and have business meetings and do all the left-brain analytical aspects that I'm sure all of you are capable of doing and all advisors are doing because we're trained in that and we've We're very good at it. And that's to take a look at how do we build business value? What are the things that are going to increase business value the most? What length of time do we have before the owner wants to exit? What things are practical? What things are not? That way you can start putting a priority based on what those needs are and the objectives are besides how to build a business value faster. You want to make sure that it's a sustainable enterprise, and it's not only sustainable to get to build business value for the next owner coming in or for the family. Business owners take pride, as you know, in what they've built up. They spent their lifetime, a lot of them, most of them, spent a lifetime building this business, and they don't want to see somebody else screw it up, and that's one of the fears that they work through, that they don't go forward with the planning. They really have a fear that nobody else can do what I do. And then we want to make sure that it's more bankable. So as we're doing the personal planning and the business planning, we also take a look at the income tax planning on the sale. What are the things we can do now, 5 years ahead of time, 3 years ahead of time, to make it tax efficient, because it's not all about how much you get on the sale, it's what you're going to net. And so these can all be integrated into this holistic planning if you're following a step-by-step process and making sure you really know what's involved and don't miss any steps, because again, it'll be a disservice to whoever you're advising. And then lastly, we take a look at the estate planning aspects of it. They might have recently had their estate planning documents updated, but it needs to be checked and make sure it's in alignment with whatever you found their personal goals and objectives are. As they have gone through their own discovery process, I have found quite often things need to be changed in these documents. So it really does cover quite a few things. It's not just about the money.

Thank you. And for this question, Michelle, What's your holistic solution?

Well, I think everything that's been mentioned is— are all things that I would agree with. I think we look at holistic through several different lenses, 5 key lenses. The first lens that we look at is the business owner focus, and so like John and Terri mentioned, really focusing on what are the personal needs of the business owner, what are the business needs, and what are the legacy needs. You know, what does that business owner want to see happen beyond his or her lifetime? The second lens that we look through is the client or the business life cycle. And so what needs to happen from inception to maturity to exit? Because as an organization, we become a bridge for those critical transitions. And then we look at what, what What focus areas do we need to have? What critical value growth gaps? So we take a look at the organization from the perspective of their personal plan, business plan and strategy, their financial, their customer and marketplace operations, leadership information and their culture, and look at what are those key areas that can drive value within the organization. The other lens that we use is the approach, and I think this is what is different, is that we, we take a couple-pronged approach. We insert ourselves into the organization and really focus on teaching the next generation of leadership how to continue to drive value within the organization, and then also provide them with different assessments and tools to be able to continue that so that they can continue taking a holistic approach as they continue to grow the organization or get it ready for whatever critical transition. And then finally, the other lens that we look through is the integrated team. And that includes both internal and external partners. We consider the people internally and even existing advisors a part of that internal team. And so how can we leverage their strengths and work together through the process? Process, and then the external team, which is the team that we have that can help and come and fill those gaps. And so we, through that holistic approach, become a bridge so that business owner can continue doing what they do well, and yet they can still accomplish their goals. So I think that just summarizes what everybody said.

Nice summary. Thanks. When we move on to the third question, we said that the key is to advise clients about the future, not so much tied to the past or the present, but the future. So I'm asking you guys, what does that mean and what does that look like in practice, starting with Terry?

So in the planning process, and I'll start with the personal side, we have them envision a glass door. And they're on one side now. And then what does it look like on the other side of that glass door? I give them a magic wand so at least we can, I can get a lot of things on paper for our 3 or 5-hour session with the owner and the significant other, and then find out what, which of those, what are those goals or objectives that are the most important to them and which ones are just a wish list that it doesn't really matter if they do it or not. So we have some direction, but they can see what's out here. Afterwards, and what things are they potentially should be looking at as a pre or a pre-retirement, just to test the waters of where they might want to move to instead of just selling and moving and finding out that was a disaster, to go there for 2 months or 3 months or to try consulting or try one of these businesses that they think they might want to do, so they're ready for when they, when they leave the business and they've got something that they are going to versus walking away from. Most business owners don't want to just walk away after all these years of hard work. They have to make sure that it has to be exciting, the new chapter of lives, that's a positive thing. You have to help them determine and see that they are going to this, whatever that might be. And if you don't have that, then there's going to be a lot of reluctancy throughout the process, and sometimes the deals, as the transaction advisors know, and the deals can break before they get to the signing because they are having seller's remorse. They have second thoughts on what they're doing. And to get them to think about what they are going to No one wants to think about retirement. Retirement, they have the old image of you work for a company 25 years, you stop, you get a gold watch, you go down to Florida, and then you either drive an old Cadillac that you can't see over the wheel, or you die, as people say. They need to have something more exciting about that. We've changed the word from retirement to activement, because our boomers especially, we want to live active, fulfilled lives. That's what they have to sort out. That's what your role is, to be able to show them what that is and for them to work diligently to get there.

We'll continue on with John.

I think, I guess, two really important points here for me. When you think about advising clients of the future and talking about the future. One is, I'll go back to something I mentioned earlier, and that is every one of us have to think that the timeline is not the deal but a lifetime, right? Because what I'm finding with my clients when I'm successful is that, as Terry said, they have something they're going to, and they want you involved in that as well, all right? So don't think about it as a, timeline, but think about it as a lifetime. So that's number one. The other thing that I think is most important is that you have that and be comfortable with having the frank conversations with your clients. It's asking the hard questions, and as soon as you feel a little bit uncomfortable, realize that you're just barely scratching the surface. That's where you deliver the most value. Everybody else will avoid those questions. If you ask the right questions, you will move up that pyramid as a trusted advisor faster than anyone else ever would. Don't be afraid to ask the question that you know is sitting there on their mind and they're worried about. Don't assume anything. Right. So what if your business sells for nothing? What if we can't sell your business? What does that mean to you? How financially well off are you? What would it mean to your family? Terry mentioned a bunch of these things. Depends on how that structure is set up, ultimately that owner's vision of the future. And for me, you know, again, I work with Ken a lot on strategic planning. One of the most important things you can do for an owner is create a vision for them. Most of them might have a little bit in their head, Literally do a visioning exercise with them. Have them use words, do pictures, whatever it is, and say, what does life look like? What are you doing? Where do you spend your time? What motivates you? Where's your passion? And when you get into that, the future starts to shape and you can guide. So my points.

You guys are being so concise today. Michelle.

So I'm not going to add any more to, to what's different about a trusted advisor, because I think John and Terri have really done a good job of describing those key aspects. What I'm going to do is I'm going to address the question about what does it look like in practice. We have a client that we've been working with for the last year, and When that owner came to us, he had been losing between $500,000 to $1 million a year for 8 years consecutively. He was ready to dump the company. It was an international company, very widely known, and he thought he was gonna be leaving a legacy and was very disappointed that he just didn't know how to get it to the next level. And so we, went in and looked at all of those aspects of the company, looked, asked about his personal goals, asked about his business goals. And then I think the key is, is that we formulated that team of integrated advisors, both internally and externally. That team consisted of a marketing and branding professional. Our team went in as an operations. We took the COO role, which freed up the owner to be able to focus on his creative energies. Started working with a coach to be able to help him dream again, and we worked with his existing attorney. We've, we brought in some sales professionals, we brought in some help with legal and contracts, and the difference with that though is that we were an integrated team. We We assessed the organization together. We came up with a plan together, and we're executing together. Within 6 months, that company achieved profitability. And so I think the key there is that the pie is big enough for everybody. I think a lot of times advisors feel as if they— I've been there myself before, where, you know, if I bring somebody else in, there's not enough to go around. And the reality is, with the mindset that there is enough, we can really pool our expertise together and really make impact. And so that owner who a year ago was looking at dumping his company that he had worked for so long to build now is doing what he loves. There's a— We've worked with the next generation of leadership where they're learning how to take this company to the next level, and they've achieved profitability. And so I think, you know, in a nutshell, that's a simple example of what it would look like in practice to be able to work with existing advisors and to partner with new ones.

Great example. Success stories we love. The last question we had for all of our panelists was to share with you their secret sauce. So I want to take time for each of them to be able to explain to you what it is that they do to win and keep long-term clients, what's different about each of them, and what does that look like? How do you do that? I'll start with John this time.

So I'll go back to A couple of points on winning. All right. I think the first one to remember is don't sell.

Advise.

Talk to them. Have a conversation. Focus on the client, number one. Every time. Always has to be about them. Be comfortable with your pitch and be able to differentiate yourself in the marketplace so that you're not a commodity. When you look at that triangle, which, by the way, I use with a lot of my clients, that pyramid is to get them to get their sales team to move up. That is the same concept, right? What you want to do is start— I don't know if everybody's read or heard about The Accidental Salesperson. Have you ever read that book? It's all about framework and state of mind and how you go into the situation. The lowest level, you're trying to sell something. The highest level is the same thing. You're a trusted advisor. You're trying to figure out what the problem is and whether or not you can solve it, not sell them something. Okay, so as far as keeping clients, I've got a longer list, but the number one thing to me— and again, this is easy for me because I'm a sole practitioner to a great extent, right? I don't have a big firm and I don't have a lot of people and I don't have to convince everybody to do this. But for me, the number one thing is that I keep the client's interest number one over mine, far and above. No conflicts whatsoever. As soon as there's a conflict, I have to either disclose it. I have to disclose it personally. That's just the way I do it. I won't do it any other way to maintain their trust. To listen really closely. And what I mean by listening is not necessarily the words, but you guys all know this, right? You sit in the room and you can feel the energy or the body language or see it in their expressions that they're saying one thing and feeling another. Go after that. Don't back away from it. Go after it and find out what's really going on. All right? Don't overpromise or try to do something that you're not really a specialist at because you want to keep somebody else out. Be comfortable in that role and say, you know what, we really need a specialist that's really good at this and this is what they do. Let's get them involved. The next two, I think, are— next three really are higher-level ones. And again, it ties to that looking at a potential client or a client over a lifetime. And that is anticipate what's coming for them. Help them get ready for it. Let them know what's coming. Tell them it's coming and how we have to prepare for what's coming. Evolve your role. In your case, the one you just described, maybe I'm a COO for a little while, but eventually I'm gonna move back out of that because that's not where the need is anymore. So be comfortable evolving your role and recognizing, you know what, I tend to play it out often that I tell my clients, look, I wanna make myself obsolete in this area. We have an issue here, let's fix that, but I wanna move on so that someone else is dealing with that and we're moving on. So my role evolves. And I'm the one that is constantly looking at it and saying, I think we need to change my role. I anticipate that. And the other thing I think is so hard is you can't judge the owner. It's their company. It's their decision. It's their wish. It's their life. Whatever they want, even if it's making the wrong decision on people or transitioning to company, that's their decision. And all you can do is your best to help them do what they want to do. You can advise them, you can throw up the red flags, you can do all that, but at the end of the day, that's their decision. I think the other thing that's most motivating for me and the most— the thing that's really, really important, and again, it's personal, is— has anybody ever— you guys watch TED Talks at all, right? Benjamin Zander. Anybody seen that one? He's a conductor, classical music conductor. And he looks at the world and says, you know, classical music, they say, is appreciated by 2 to 3% of the population. And the classical musical people say, imagine if we could make it 4%. And he looks at it and says, why can't we do it with everybody? And he goes through this thing. And what he does is he uses music And he talks about his role as a conductor and says, as a conductor, I have no power. All I do is invigorate and engage with others so that they can do their best. Well, for me, that's what I do. As long as I can do that with a business owner, we'll have a long-term relationship. If I find we can't have that, there's no twinkle in their eye, they're not excited about it, I can't get excited about it. We won't be successful. So there has to be a mutual agreement in that, for me anyways.

Michelle?

For us, it's definitely about the holistic approach and, you know, really making sure that we're understanding their critical value gaps and what they need to fill those value gaps, but I think there's 4 key things that we feel differentiates or becomes our secret sauce. The first is we really go inside and become a part of the team. We end up spending more time with the rest of the employees beyond the leadership team or the owner. And it's critical because we teach them how to fish. We provide them with tools and systems and processes. To be able to learn how to think about those critical transitions and how to grow the organization. I think the other thing that we do is really making sure that we bring that team, that we, you know, our team always involves operational, transactional, and exit planning advisors. And I think that's critical because that gives the owner peace of mind. It also helps the owner not have to feel like they're playing intermediary, because they know that they've got an integrated team that's working together from start to finish. And then finally, I mentioned it briefly, was that we do provide the systems and the processes and tools. And so we leave things behind with the client that allows them to continue success, but at the But at the same time, it allows— it keeps them connected to us because they're— it's a way of kind of creating a residual relationship with that client long-term.

Perfect. And Terry?

The first is to really listen and hear. Well, and I don't know how many people have heard that expression before of listen and really hear. 'Cause most of us are lousy communicators, which boils down to being lousy listeners. And when we're first meeting a prospect, as they are speaking and talking about what their goals and objectives are, we might be half listening as we're trying to find a way that we can sell them the service, whatever we're offering, and we miss key points. And again, that's why quite often I'm the second or third person in, because the others have failed, because they haven't really gathered what their real objectives are, and then to be able to provide a custom solution that's tailored just specifically for them. If it includes some of the things that I am good at or not, and I bring in other advisors because one person doesn't have all the knowledge. I'm providing a solution that is specific to them because I've taken the time to listen, and I have quite a few clients throughout the engagement of the planning and then the execution phase that I help them out with make specific comment of what a good listener I am because I'm getting everything that they have asked for, and I follow up exactly how they want things to be followed up with and try to find a solution for them. So I've gotten myself into that most trusted advisor in my business transition role, not as my CPA role. Step 2 is to make sure that what we do is follow through on a proven step-by-step process. It's something that ROCG put together over a 2-year time period with many best minds involved to do that. It's constantly fine-tuned. I've done close to 100 engagements and I constantly fine-tune it. And I've had, and we have had quite a bit of success with it. And it has to be done in the process that works. Some people will take something that's down the bottom and try to put at the top because that's what they're selling, that's what they're good at, or that's what they're most comfortable at, and that included some of my partners in the early stages, and it just didn't work. We had to go back to start from the very beginning and go through the process. So you need to find something that's out there, and there are other systems out there besides what ROCG has that has been proven. Just make sure you have something that you're following. The third is starting off with those personal values and objectives. In my many seminars I have, I make sure that I say over and over again, it's not all about the money. It's not all about the maximizing value. It's about maximizing value for what your needs are. It is so rewarding when I am able to tell a business owner and their significant other that they have everything they will possibly need based on their needs analysis and their lifestyle that they've told me that they want afterwards, and given going past their projected date of death for another 5 years or 10 years, and tongue-tied there, I said, at least you appreciate it. And working out and coming back and saying, you don't need to stay here. You don't need to worry about this every day. You don't need to worry about the kids screwing it up and crashing it down. You don't want that, but you don't need to worry about it. You have enough. And you can see the weight of the world being taken off their shoulders. So it's important to find out those things individually and know that it's not just about the financial aspects, it's about the non-financial also of what we have to get involved with. And then just making sure, as John has talked about, and I think it's crucial, and I've alluded to a couple of times, that you're bringing in the other advisors based on what they need. We don't have all— one person doesn't have all the answers. We don't have all the skill sets. We don't have all the specialties. We might know a little about certain things and a little bit about this and a little about that, but we're dealing with someone's once-in-a-lifetime transaction. We have to make sure we're bringing qualified people in and making sure it isn't a collaborative approach, something that the first panel talked about and mentioned quite often. We need a collaborative approach. Don't be afraid to work with others. There's a lot of business out there. You're not going to go starving because you've carved a piece of the pie out for somebody else. And the very last one, and I think is the most important, is a right-brain, left-brain skill set. There are many, many emotional facets in both putting a plan together and in the execution that you're going to be running into, and if you haven't planned for them properly and you don't have the ability to be able to switch from right brain to left brain and back again. Oftentimes anybody's plans will be derailed or stopped right in their tracks. So you need to know that there are emotional aspects that are going to control this transition and going to control that transaction process. You have to plan for it. You have to be willing to work in there. You have to get the skill set to be able to switch back and forth. So that's what's been my success ROCG's success. And if I can just conclude one thing, Carrie, and it's offside of this one, and if for those who want to be an advisor but don't want to go fully in with all of that, then just make sure you align yourself with someone who specializes in the exit and transition space and become part of their team or somebody else's team for whatever your expertise is, because then you're working together for that client and that's true collaboration. I think that's what we need to have.

Great coda to what we're talking about, because really, to win and keep long-term clients, it really comes down to how you do business, how you fulfill your goals, the kinds of conversations that you want to have or are willing to have with the clients, and then what role do you play, what role do you want to play with each of those clients to build that long-term relationship. I'd like to open it up to questions while we have time still. Other questions for our panelists?

Could you repeat that so everybody else can hear, please? You talked about 3 to 5 year engagement life cycles. What are some of the challenges in keeping momentum, managing fatigue, distractions, interruptions that come up in the business? Yeah, there are challenges. And depending on what we're— you know, our planning process takes 90 to 120 days depending on their schedules, our schedules, because there's a series of meetings and homework to do and analytics to do. It's the execution timeframe, so when I say it could take 3 to 5, I think the profession says that a minimum needs to do 2 to 5, and some of them doing 7 or 10-year planning, but the 2 to 5 is the execution stage, so my role afterwards is to make sure that they learn how to run the company strategically and strengthen the management team and all the things you identify of building value up there is monthly meetings. To make sure that they're following these action steps in a Gantt chart that's put together with specific action steps that somebody on the team's going to do, an outside advisor's going to do, I'm going to go through and do. And so for me, my position is facilitation, is to making sure that they're moving forward, holding them accountable if they're not going through it, if they're not following through, or they tell me all the reasons why they can't. If the management team's saying all the reasons why they can't do something, then I suggest that I should pull myself out of this position. I don't need the money. It will save the owner money and all of us time. I'll come back in a year's time, and they'll be in the same position that they're in now, and they seem to get that. They've gotten that message, and some— most of them get back on track, and some have fallen down, and then I can switch those monthlies to quarterly and to keep the momentum going and special needs if we need to. And for those who have fallen down, they ended up, have ended up calling me to just resurrect it and start all over again because they haven't been able to get that full implementation. They weren't willing at the time to change people that were in key roles, but then they learned that they needed to change those people to get the value for what they wanted to get it. So it is a lot of process, but if you stay on top of it, you can do it.

For us, that 3- to 5-year window obviously looks different depending on what the company's goals are and what gaps we find, but I think the key to keeping momentum and engagement and excitement is focusing on getting everybody in the organization involved. And so we always— after we do an assessment process, we always do a strategic planning process, but then we train everybody in in the organization to get involved with carrying those key initiatives. And then depending on their maturity level around that, maybe do some education on how to keep those initiatives alive. So it becomes a really fun atmosphere for the whole organization. It's not something that stays with the leadership level.

So I've had success maintaining momentum and things like that by using some type of platform, whatever they're comfortable with. But you've heard of Good to Great, the Balanced Scorecard, those types of things. So once you create that vision, a key part of it is rolling it into the organization, you know, and helping the stakeholders, all the people in the company, as to what's in it for them, right? But I also agree with Terry. I mean, I consider myself a planning specialist. Not that I know how to do every type of plan, but there's a process to planning, right? And you want to make sure that competency is built in that company and in those people so that they take— that's an obsolescence, right? For me, if I teach them, great, now they can go do that. That's a value component, you know, that they are constantly looking forward and thinking ahead and saying, okay, so I hit a bump. What are we going to do about it? You know, we had a setback. Yeah, okay, so what do you want to do about it? It's a choice. But, you know, it's almost being that mentor coach to the, the owner and saying, stepping back and saying, okay, so you hit a bump, what are you gonna do about it? All right, what are your options? What are your choices? What do you— don't tell them what to do, help them think it through.

Other questions?

So I was going to ask the question, during that 3 to 5 year period, how do you make a living at moving from a transaction advisor to a value growth advisor? I think somebody mentioned retainers, but are there other types of fee structures, or what is— give some examples of some fee structures that seem to work. My planning, depending on the size of the client, I'm on the lower end of the lower middle market, so $5 million to $25 million, could go $30 million, could because that's the space that I have the most impact. I can make the biggest difference in a client's life, and I want to enjoy the work I'm doing, and I feel good about it. By the planning stage, the planning is a fixed fee. Right now I'm up to $17,000, and the highest one I have right now is $30,000. The engagement afterwards is based on what they need, but it's typically for a 2 to 3 year run, another $65,000 for the different aspects of it. During the planning stage, they're already implementing a lot of the things that we're talking about, and so there's immediate bottom line. If anything you're looking at, you know, you're looking at the low-hanging fruit anyway, and so you're correcting some of those things, so the profitability is already increasing. So the fees, they don't have, they haven't had a problem with because they're making the money with the things that we're doing. My aspect for advisors, I guarantee my services that I'm going to do XYZ, and if I don't do XYZ, then don't pay me. Pay me what you think it's worth because I've either really bad at what I do or have oversold it. That's never happened. It's a differentiator, which I should have thrown the last section in here. But you have to think of those things, and they're more willing to take the risk because if someone hears it's going to cost you $75,000 over 3 years, 2-3 years time period, a lot of, a lot of smaller businesses, they're just going to walk away. But if they know it's going to be bite-sized size based on what they're able to do, what their cash flow is, and there's a guarantee that I'm not just going to oversell them and just keep on charging them to make money. They don't have to pay me at certain points, my deliverable points.

For us, we have a couple different fee structures. We always start out with an assessment process, and we— that's typically on a project basis, because it's our opportunity to get to know the owner and their opportunity opportunity to get to know us and to see if we could work together. That, that assessment process is usually right around $10,000 to $20,000 depending on the size of the company. We work with companies that are between $5 million and $50 million in revenues. Once we've gone through that assessment process, it typically moves into a retainer engagement, and like I said before, we go inside the organization, and so a lot of times they don't have— as a part of the assessment process, we look to see do they have the internal bandwidth to be able to carry out what it is that we're finding, and in a lot of cases they don't. And so we will go in and, you know, become the COO, become the president, become the integrator, but because we have systems and tools and processes, we can go in one day a week, maybe two days a a week to do that instead of them needing to hire a full-time person. And so as a bridge, our consultants are able to work, you know, they're able to have 3 to 5 retainers at any given time, depending on what workload they have. And then the third part of our fee structure is the residual. Because we use regular assessments and tools, those, you they become integrated into the organization, and so clients that kind of graduate to that level of being able to continue their growth on their own, they still continue to use those assessments and tools, and so that becomes residual income.

John?

So quickly, one is, let's go back to the beginning, don't focus on the price of it, right? I mean, if you think about the service you offer, most of what a trusted advisor The value of an advisor office is intangible, right? So it's value perceived by the client, and don't underprice it, right? So you can do, I mean, Ken and I have been through this exercise a few times where we've continued to do strategic planning, and what we're finding is that the marketplace will tolerate a lot higher price than we thought they would. We have our own perception of what it's worth, and it's too low. All right, so do the same thing with those clients, but you advise them and you do things that are different than what other people do, and therefore you charge for them. Okay? And if they don't want to pay it, then something else is wrong. I mean, the last thing I want to deal with is money. I want to go in and help them. Anybody read the book Getting Naked, Patrick Lencioni? Right? As a business advisor, I read it because it tells a story about one advisory firm versus another and their philosophical differences. The huge firm was all about, we're going to go in and tell them, we do these presentations every time, we tell them exactly what to do and here's what we— having not even spoken to the client. Where the other firm, a boutique firm, just goes in and sits down. So what do you want to talk about? Why are we here? Okay, now that we know that, then let's have— and they just pop in and they say hello and they do things that we don't normally would do when we think about ourselves as a CPA or an accountant or a business advisor or a transaction person. They stop in and say, hey, what's going on? How we doing? You know, I mean, it's just a different mindset. It really is. And there's plenty of money to be made. Plenty of money.

Well, thank you to our panelists: Michelle Bonohom, John Lawler, Terry Shepherd. And thank you for your attendance. You for your attendance. You for your attendance. You for your attendance. You for your attendance. You for your attendance. You for your attendance. You for your attendance. You for your attendance. You for your attendance. You for your attendance. You for your attendance.