Transition Planning and Transaction Execution

Welcome everyone to this, the second session in our new Value Growth Series as part of the M&A Summer Conference 2010. 2015. This session is entitled Transition Planning and Transaction Execution. We have 3 panelists with a lot to share with you, and I don't want to take too much of their time away from them, so let me first introduce who we have. Peter Chrisman is the founder of the Master Plan Institute. Jack Beauregard is the founder of the Successful Transition Planning Institute, and Tony Madonia is the— is JD, CPA, and owner of Anthony J. Madonia and Associates, Ltd. I'm the moderator here. I'm Carrie Sauls, Managing Director of This Way Out Group. I wanted to give you some context of what we're doing here, and first, There's an environment here that we're talking about, and that you'll better understand the context of the valuable information that our presenters are providing you if I give you some of the background. We'll take questions at the end for all of our panelists after they've given you all of their insights. In combination, transition planning and transaction execution provide a huge opportunity for every advisor to add value, to engage, and to assist every business owner in the seller's market. It's a huge opportunity because the transaction process itself, as we all know, and the owners come to find out, is overwhelming and all-consuming. And as a result, their transition planning Efforts or thoughts go out the window. They get sidelined. They get postponed. Whatever word you want to use, it doesn't happen. So therefore, that means that owners are not prepared or focusing on what comes next. And that's the key to why, and this is not always readily acknowledged, that owners are sabotaging 70% of the deals that they actually complete. Now we as the group with the panelists, we believe that, that's because they have no transition plan for their reinvention in place before they start the transaction process. A successful transaction and transition process has 4 elements. First and foremost is that you need an integrated team of advisors, bringing everyone to the table together, breaking down the traditional silos. Number 2 is that by bridging both processes together and early, parallel planning is an essential that we cannot— we can't say is optional for the owners. We all have to be making the parallel planning mandatory to ensure that the deals get done instead of only 1 in 10 actually getting to the transaction. Number 3 is that we need collaboration, as you heard in the first session, It is essential that we have collaboration among all of the advisors to streamline the work, to minimize the errors, and to reduce the rework that happens during the transaction in the crunch. But the fourth part is that for a successful transaction, the owners need a longer timeline to address both the value gap and the value enhancement opportunities before they enter that transaction process. And the reason they need to do it is because there is a direct relationship between the value that they can command in the transaction and the length of time they have leading up to that transaction. And if we allow them to have more time, we will all realize a better transaction, a more successful transaction at a higher value. Now, in addition, there really are a lot of costs and risks to everyone—advisors, sellers, and to the buyer—of neglecting what is in it for the seller by completing the transaction and having a transition to what they want next. Some of these include—and I'm just going to rattle them off rather than discuss them because I want most of our time to be for our panelists—incomplete client preparation. Fewer deals getting completed the first time through. The seller's leverage in the transaction gets diluted. The impact of the seller's reinvention on actually getting to closure can actually risk the transaction itself. The potential maximum valuation that a seller can realize does get compromised along the way, and because of a lack of early planning. There's a risk of a higher tax impact, so that impacts the return that the seller can get. And in fact, they can walk away from a deal when they realize what they're signing up for, or after the transaction, they don't abide by the warrants and reps that they've already signed. But the biggest elephant in the room that nobody talks about is that 3 Only 3 out of every 10 deals that get done survives the next 3 years. That means 7 out of every 10 deals that you complete have dissolved in some way within 3 years, and mostly because that seller who didn't have a clear and effective transition plan in place in some way disturbs or sabotages the deal that they made. Because they're still looking back instead of looking forward. In this environment, our panelists have identified an abundance of opportunities for all advisors to better serve the client to get better deals. I know this is just a preamble and it's a lot of what you already read in our description of the program, but that's our setup so that you understand how adamant our guests are in the points that they're making with action items that you can take to heart and execute immediately. We will start with Peter Crisman of now the Master Plan Institute.

Thank you, Carrie. It's great to be with you folks. You hear me all right in the back? I can hear you too, so— sorry, I guess it must be the time of day. I'd like to share an experience that I had in the year 2000. I, after 18 years in corporate life with Ford Motor Company and Xerox, I got into the business of selling companies. And for 22 years up until that year of 2000, I was selling companies that would sell between $5 and $150 million. Year 2000 came along, and as you all know, we had a little bubble break. In fact, a big bubble, right? And I sat back and I looked at the business, and I said, I've got to create an even better process. Because I knew we were selling our clients' companies for the greatest gross value, but there were some things happening. I would go out and call on a business owner, and we'd have a great visit. Talked for about 2 hours, 3 hours, show me the plant, what have you. But I didn't have a link, a link to sew them up at that time because I qualified that they weren't ready to sell and I didn't want to screw around with them during that time. So my first objective, I had 5 objectives in the analysis I did. First objective was to have a link where I could start a relationship with that owner on the first visit. Second objective, I wanted something, even though we were doing well, but I know you're going to find this hard to believe, but I wanted something to provide monthly income, like monthly retainers between deals. That was the second objective. The third objective was a process to build a farm system deals so that I'd go to the next year and the next year and I would have a farm system there ready to go. The fourth objective was a process to improve, even though we were doing well, improve our hit rate of closings. And my fifth objective was to eliminate any beauty contest with other firms because I knew we were the best, but I hated to have other firms come in and lie about themselves. I wanted to do all the lying. So I sat back and I said, you know, are we— even though we're selling our clients' companies for the greatest gross value, are we really hitting all of our clients' objectives? And the answer came back to me, no, we weren't. Because you know what? I figured out they're paying too much in taxes because there's no tax planning. I wasn't sure the money was going where it should be going because there's no estate planning going on and no financial planning going on. So duh, it dawned on me, my process is not up to date. So that's when I developed the world of exit planning. The process I developed, we beta tested on 3 companies that went real well. It went so well we wrote a book on it called The $10 Trillion Opportunity. The following year we started a firm called the Exit Planning Institute, and the purpose of that firm was to train and certify advisors in exit planning here at the Gleacher Center in Chicago. I'm proud to say in the 6 years that I owned the firm, we trained and certified advisors from 8 countries, including the United States. Then in 2012, I sold the firm. I was approached by another firm that wanted to buy us, and as you know, one buyer is no buyer, so I had to get another buyer in the mix. I'm so glad that I got Chris Snyder and his group involved from Cleveland. Chris bought the company in the fourth quarter of 2012 and is just doing a fantastic job with the Exit Planning Institute. Since that time I've been working with Chris and the advisors, teaching, going around the country speaking about exit planning and talking about the 5 objectives that I hit by going from an investment banker to an exit planner. After I got into exit planning, I didn't sell companies anymore. So that's my story and I'm sticking to it. But more recently, more recently I wrote a book and this book was written especially for business owners. Now you can tell it's written for business owners because it's only got about 88 pages. Business owners do not They want toilet material. They don't want 200-page books. And the second thing I did is I made the font a little larger for some of you old-timers in the room. So I'm really proud to say that this book has really gotten praise from critical people like Carrie and others of you in this room. I would recommend the book not because I wrote it. But as Barry Goodman will tell you back there, he talks about it at every EPI chapter meeting, this book is a great book for your prospects and also for your clients on the process. And it focuses on just 3 things. There's 3 legs of the stool. You only have to do 3 things as a business owner to have a master plan. First leg, do everything you can to maximize the value of the business beforehand. Second of all, get planned personally from an estate, tax, and financial point of view. And the third leg of the stool, develop some kind of life plan so you know what you're going to do afterward. Because I'll tell you what I found out in the year 2000. All the planning was taking place after a liquidity event instead of before the liquidity event when it would have the greatest benefit for your clients and your prospects. And I'll tell you what, you gotta get with it because if you want to achieve the 5 objectives I want to achieve, this kind of exit planning, master planning will do the job. Thank you, Kerry.

Oh, you made that so quick.

Well, as my wife says, I'm a quick guy. Oh, I didn't mean that.

I just, you know. Thanks for sharing, Pete. Jack, go ahead. I feel like the robot after the Queen Mary after Peter here. Let me open up by asking you 3 questions. Do you love your children? Yeah. Do you love your grandchildren? Yes. And for those who don't have either, Do you love your country? Yeah. Oh, I do. Then basically you're going to be interested in Personal Transition Planning. Because what it's doing, it's going to effectively deal with the two major transformational changes that are happening in this country today. The first one is that we are experiencing the largest transfer of wealth in the history of mankind. And what happens is— If the business owner is only able to envision dying at their desk for the future, no one helps that business owner create value to make that company ready to be transitioned to new ownership. That means the company's going to die, all the employees are going to be let go, the community that it's located is going to get hurt. And the financial future of our children and grandchildren and the economic health of this country is going to be devastated by the loss of $10 trillion of wealth. And that's what's involved in this transfer. Basically, what you can do, how you can help this situation, is to expand your awareness in the way you think from either/or to to a both/and way of thinking. And what happens is when you expand your awareness and your thinking, you focus in on what you need to do today, but you also include what need you need to do in the future 3 to 5 years from now. And what happens when you got two alternatives, the present and the future, is that now you can create a spectrum that fills in that void of the unknown with a whole spectrum of businesses that are in various degrees of saleability. And what this does, it creates a continuous flow of deals for you over the years. The next one is, is that also is that when you expand your awareness, you also and the way you think, you also expand into a whole new integrated business succession model. And what it comes to is, is everybody in this room is basically in the category of make it happen. You're transaction specialists. You know how to make deals go. But also you have to work with people, the accountants, the estate planning attorneys, the law managers, to make that liquidity event last. And then also the other one is to make it better, which is the professional advisors who do business improvement. And the last leg of this stool is basically make it matter. These are people, professionals who have been trained in transition advisory or transition planning consultants. And what they do is work with the owner to deal with the soft issues. Because believe me, I've seen this, the soft issues are the hard issues. And if they're not addressed, it's gonna sabotage the deal. There's no— and that is going to the conclusion that the owner can even wrap their mind around the whole process at the beginning. So what a personal transition planning does is basically helps that owner answer a key, key existential question. And unless they answer this question, they're not going to move. I am a business owner. Who am I when I no longer own a business? If they don't know that, they're not going to fall into a psychological hole. The other component is the company's their baby. They worked 10, 20, 30 years in this business. They're emotionally attached to it. They might have the business longer than they've been married. And so what it comes down to, they have to make a detachment and start thinking as both a COO and a CEO. What am I going to do with this company 3 to 5 years from now? And what do I need to make it transferable to new ownership? And all of a sudden they can start, by creating that emotional detachment, they can start to keep working in the company, but also they can start working on the company. And the other component is I used to be in the M&A field myself doing people and cultural integrations. And I saw so often seller's remorse. 3/4 into the transaction, the owners say everything correct on top of the table, they're meeting their financial objectives. It's the unresolved fears that have not been addressed underneath the table They sabotage the deal for absolutely no business reason. And they are absolutely afraid, they say, oh my word, this thing is really going to happen. And I have no idea what I'm going to do when I leave. So they kill the deal. In fact, the last time I was on a panel in Philadelphia, there was an investment banker inside me. He said, Jack, you're absolutely right. We have got burned so often by seller's remorse that now we have a major, major financial penalty clause in our contract. Even if they get the retainer, they've burned through it. The other one is the personal transition planning deals with another transformative event. We are the first generation, the first generation in the history of mankind who have been given the gift of longevity. Because most people retired at 65 and they were dead by 68. And so you only had 3 to 4 years of life. All of a sudden now, because of the breakthrough in public health and medical technology, now all of a sudden we have is another 10, 20, 30 years of life. We got a new chapter of life. It's what we call the platinum years. Forget the golden years. Nobody— most baby boomers are not looking for it. They're not going to leave their companies. If they're going to sit on a porch in a rocking chair or if they're going to use them to play golf every day. They're not interested. So basically what personal transition planning does is help them create a whole new dynamic, meaningful, purposeful new life where they have the opportunity, they got the help, they got the smarts, they got the vitality, and they got the financing to be able to make a difference in this world. Kerry, if you could go to the— oh, you got it. The next slide, please. And what we're talking about is creating a purposeful life. Because none of them— no owner is going to leave and fall into a void of inactivity. Who wants to sit and do nothing? So I don't know who I am, and now I'm going to go, well, I'm looking at I don't know what I'm going to do for the next 10, 20, 30 years. Boy, that's really encouraging. So what we are doing is basically is helping them create a strategic business-like approach to all 10 aspects of their lives. And all of a sudden now, they have a life they can't wait to go to. So the vision of the life draws them out of the company. And that's why I was the first— the institute, we transformed the new field of exit planning because I said no. What happens, I was sitting in a plane at the time at Cleveland, and I realized what the first thing that happens is, people, the flight attendants, they point out the exit doors. And it's like, I'm not going to use that in a bad situation. And then in that weekend with my wife, we went to a play, see the Jersey Boys. And we left through the exit door. And I didn't know where the heck we were going to end up, with street or the alley or where. Words matter. It's not exit, it's transition plan. Because often in transition you go into something. And when these owners be able to deal with all these 5 aspects, state, it's important, activities with spouse and partners. If the— you got a merger going on, you got the CEO of the company and you got the CEO of the house. If they don't create a common sheet of music, what's going to happen? They're going to go split off. In fact, the greatest rate of divorce demographically is baby boomers. Divorce used to be people over 50 was in 1990 was 10%, now it's over 25%. In fact, in the divorce lawyer area, it's called gray divorce. Got to create a strategic plan for all aspects of their lives. You know, socially. They're basically— their social network so often is their customers, their vendors, et cetera. Where are they going to fill that in? So I would like to end with basically how you can help your children, your grandchildren in this country is to expand your awareness, expand the way you think from an either/or silo mentality to a both/and way of thinking where you integrate both the the quantitative aspects and the qualitative, the soft issues and the hard issues. You put them together, then you get a motivated and a successful transaction. Thank you.

Thanks, Jim.

Tony?

Good afternoon, everyone. Thanks for joining us, and we were running a little bit late, but I'll talk a little bit faster and get through the material so we don't miss the keynote speaker. I'm Tony Madonia. I'm a recovering CPA and now practicing attorney. I was with Peat Marwick Mitchell in the '80s, give or take, and I went through law school at night. So my background is steeped in financial statements, lots of tax planning, lots of tax planning, and then business planning and estate planning as they relate to the legal world. Touching on a couple of the comments of some of the people who've spoken earlier, particularly Carl Scheeler, who spoke in the 2:30 to 3:30 session, he said companies that are looking to acquire other companies, they look at balance sheets, they look at financial statements. He says what's really important is the quality of that management group, and there's nothing about management group on any of those documents. So why do they focus on that when what they really ought to focus on is sitting down and talking to people and saying, what's important to you? What are you trying to accomplish? What are you willing to compromise in order to accomplish those things? And what are your priorities? So I've got a law firm in Chicago, not too far from here. We'll be 20 years old in October. And one of the things that we do differently is we sit down and talk with everybody about what their long-term goals are, no matter what they'd like us to do for them. I recently got engaged to do some employment contracts for a management group. And I said to the client, I said, I want to fly out and see you just to see what makes you tick. And he said, Tony, that's not important. I need something very specific, and this is what I'd like you to do. And I said, well, I really can't do that unless I understand what's important to you and what you're trying to do with this, because if I don't understand that, we're not going to have a good outcome. And for people who embrace that, we've been able to do some great work with. For people who are thinking more short-term, it just hasn't gone well. So the takeaway from what I've got to say is begin with the end in mind, because at the very beginning, whether that's when you're forming the company or when you're purchasing the company, that's when you have the most options available to you that can do you some good long term. Real estate investors would tell you, you make money the day you buy the property, not the day you sell the property, because the day you buy the property, you're locked into a certain paradigm and you're hoping that things go as projected, but you really don't know. The day you sell the property is when we think they make money, but it really isn't. That point is well taken. Begin with the end in mind. So what does that mean? That means, first of all, who's going to own whatever we're starting or whatever we're buying? And most business owners don't suffer from a lack of ego, and they say, well, that's an easy decision. I'm going to own it. I'm the guy who thought up the widget or who designed the next iPhone app or whatever it is. It's got to be owned by me. Almost always a mistake. Almost always a mistake. You want to diversify that in terms of who's going to own it and in terms of what are they going to own. Who's going to own intellectual property? Who's going to own plant equipment if it's that sort of business? Who's going to own jurisdictions outside of that state or outside of that country? There's lots of opportunities, but it has to be done early because just like the real estate investor, once you've made those decisions, to a great extent you're locked in, and changing those is very expensive. So begin with who's going to own it in the first place, whether you're starting it from scratch or whether you're acquiring it or a piece of it from an existing company. Along with objectives, you know, no one has the objective of creating the next Angry Birds app or the next line of clothing. Usually it's, it's much bigger than that. So, so understand what's important to the family, if there's a succession plan along the lines of children, or what they ultimately want to do with it. As my colleague Jack said here, you know, look to where the exit signs are because you're going to need to use them sooner or later. I was with a client last week who owns an insurance agency, and we're talking about succession. He says, He says, "Yeah, my son Jack, I think he's really got what it takes to be in this business and I'm gonna groom him and I think I'm gonna pass it down to Jack." And I shook my head and said, "Jeff, Jeff, Jeff is 10 years old. Are you sure he's your guy? Maybe we ought to consider some other alternatives." "No, no, I think he's my guy." And I had to shake my head a little bit. Trends that I'm seeing, and we've got some clients that are second and third generation family businesses, trends that I'm seeing are fewer of those companies are being sold to children. I don't know why. Looking at my house, people, you know, my kids look at what I do and say, geez, I'd never want to do that. And I think that, you know, whatever it is that those other business owners do, their kids have that same sentiment. So I'm not seeing nearly as many businesses going down to family members as I am to buyout groups. Several of you are shaking your heads, it looks like, like that's pretty common. Other things to consider are what options do you have available to you from a tax standpoint, from an asset protection standpoint, from a jurisdictional standpoint. Whatever you're doing, you could probably do cheaper some other way, and I'm not talking about moving all your manufacturing to China. I'm talking about where within your world you can do things more cost-effectively. One of our clients, a transportation company, moved their whole credit collection operation to a small town in Montana where there was a huge labor pool to draw from. The wages were much cheaper. They rented the facility for almost nothing, and their healthcare costs there are cheaper. Literally everything they do there is cheaper than it is in Illinois. Surprise, surprise. And they were able to get a lot of mileage out of that. One of our clients is buying an aircraft, and looking at that person's situation and where we can domicile this aircraft, his state of domicile, the sales tax is about 7%. The state where we're going to domicile the contract, I think we're going to pay $1,500 in sales tax on the purchase, and it's a fairly large purchase. So again, you've got to consider all of these things when making any kind of business decision. Decision because there's usually a way to save a few dollars. On the asset protection standpoint, some of our clients have domestic asset protection trusts. I don't recommend them. Some of our clients have offshore asset protection trusts. It's not that we're trying to hide anything. It's not that we're trying to conceal anything from Uncle Sam. In fact, there's several more layers of disclosure involved. What we are trying to do is conserve that person's capital, and let's face it, Being in business, you're going to get sued. You're going to get sued for things you do or don't do. You're going to get sued for things that your managers do or don't do. You're going to get sued, careful as you may be. If and when that day comes, you want to be able to comfortably say, my assets are in a protected environment. Let's talk about what is really happening here and come to a solution that's cost-effective for everyone. So Again, you're well served to start planning for those things early because the longer you own the company, the more wealth you build, the more difficult those things are to accomplish. Looking at taxes, there's a million of them. Illinois has no shortage of taxing authorities here. By way of number of taxing authorities, we lead the nation, so we're number one in something. There's about 6,200 taxing authorities in Illinois. From the Water Reclamation District to the Library District to I don't know what, but there's 6,200 of them. Number 2 is Louisiana with 4,200. So Illinois is comfortably in the lead and we've got that to hang our hat on. But there's use taxes, there's surtaxes, there's all manner of taxes. There is estate taxes and we keep hearing that the estate tax doesn't make any sense, so we're going to get rid of it. But they haven't gotten rid of it. In Illinois, we heard for a long time these tollbooths are silly, we're going to get rid of them. Now there's more of them and they take your money electronically. On the estate tax side, and techniques that are tried and true for generations of planners, that being put assets into a family limited partnership with restrictions on transfer and other restrictions, and we can get a valuation discount on it, have worked wonderfully for lots and lots of years. Come September, the IRS has promised us new legislation that's going to curtail that. And right now they're talking about curtailing it for entities that own publicly traded securities—stocks, bonds, hedge funds, things like that—and they're saying that being that the assets are so liquid, you shouldn't be able to avail yourself of those discounts. But like a lot of things with the IRS, when they get the doors a little bit open, next thing you know, the door is wide open. Some commentators are saying they're gonna start with publicly traded securities, but they're gonna wind up with even privately held companies. In fact, they want to channel these new rules around the rules that are— if you're familiar with the rules where the owner of a privately held business can defer the estate tax and pay it over several years. So there's a very small exemption that allows you to do that. At last count, it's like 200 estate tax returns a year are able to qualify for that because the requirements are very thin. So look for that as a form of coming attraction. And again, once they're able to open that door, they're able to open it much more. Once upon a time, Medicare taxes were only on wages, now they're on a bunch of other things too. Once upon a time there was a ceiling on FICA and Medicare wages, now there's only a ceiling on FICA wages, and we all sure hope that that stays in place for some time. So my point is, on the transactional side— and I hate calling it the transactional side because it sounds like, you know, just punch up LegalZoom and you'll have your answer, and for $49.95 you'll have the transaction closed. But on the legal side is to really look at all the objectives of that family or that group of business owners— they may be not family— and decide what's really important for them. What are they looking to prioritize? What are they looking to trade off? And how do you get there? Questions, thoughts, or observations? Yes, in the back.

First comment, then a question for Peter. Peter, those shoes are awesome, and kudos to you for wearing them out in public.

Yeah, I got to tell you a funny story today. I get dressed— Show them. Oh, I'm sorry. Want me to do a tap-in? I do. Go ahead. So everyone can see them now. And when I was walking out this morning in our condo, we have a mirror right by the door, you know, and I give it one look and I started singing the Candyman. And that song's been going in my mind all day.

Awesome.

So on a serious note then, Peter, you mentioned the third leg of the stool, so preparing our clients for what's What's next? And so how do we as CPAs or other advisors help our clients plan for that third act, or what advisors or professionals should we look to bring in?

Well, I'm sure Jack will want to jump in on that question also, but you know, it starts out, it starts out in the beginning by asking them questions and then shutting up. And ask another question and then shut— well, oh really? Well, why do you feel that way? How long have you been unhappy at home? You ask what you— if you think you can't get personal with people, you'll never be successful. Because when's the last time anybody ever sat down with you and had a personal conversation? And ask you where you want to be in 5 years. Ask you where you want to be in 10 years. Are you happy? Do you have the same thoughts about your business that you did when you started it? Different questions, and what those questions and the answers will do, they'll take you and them down a road, okay? And what we recommend, they'll take you down a road that you may come to conclusions together, but if you don't, it'll be the clue to bring in a business psychologist or what have you, because you're going to run into a dysfunctional situation and you're going to need more help. But I can tell you this: if you don't have that— any of the legs fully developed in the stool, but particularly the third leg— and Jack will tell you that third leg is the most neglected leg of the stool. You won't have a stable situation in, as Jack said earlier, you're going to have the seller with serious seller's remorse because his identity's tied up in the company, the company's his mistress, all of that stuff. So that leg, third leg of the stool, is going to be fully, fully developed. I hope I've answered the question.

Following up on that is that, is that I've seen so often, I've heard so often, the advisors, let's say left-brained advisors, want some type of tools to be able to deal with the soft issue, right-brained issues, but not go deep. And what we do, we have two different programs. We take advisors, professional advisors, and train them to become transition planning consultants. In other words, they've got over 2,000 pages of material, weeks training, they do the deep dive. But a lot of the transactional people don't want to do the deep dive. So what we just came up with, just launched, is a What's Next coaching program for advisors. So basically, rather than having you jump off the diving board into the deep end of the pool, you can get on the shallow end. And just do 2 coaching sessions with that owner. So your foot and their foot are the first level of the pool, the steps of the pool. And then you're getting them ready. Then if you need additional— they come up with the conclusion they need additional work, then you can refer them to a transition planning consultant. And so in fact, there's material in the back. I brought that. But I did this. Because I went to XPX, which is an exit planning group in the Boston area, and I heard all the advisors talking in the Q&A saying, we need something to help us with the soft issues but not become experts.

Jack should have gone to the Exit Planning Institute.

He wouldn't have had that issue.

My follow-up would be a client of ours sold a business 3 years ago for a good price. This year he is on track to play 100 rounds of golf, mostly at really nice golf courses. And every time I talk to him, all he talks about is his business. I was with him last week. I said, "Hey, how was Pebble Beach?" "Pebble Beach was great. I shot an 82. But you know what they're doing with the business? They got rid of this one and they got rid of that one and they're bringing on this business unit." "Oh, okay, okay." How's your son doing? He's doing great, he's doing great. And now they're going to expand into here and they're going to this. I mean, all he can talk about is his business. I'm encouraging him to buy another business. It's still in his blood. He still has a passion for it. Retirement doesn't mean sitting at the beach or going to the golf course every day. And for this particular guy, he needs to own a business and his wife would agree. So that's— his wife would say he needs two businesses, but we'll start with one.

I have a question before there are any others. We've said that this was about transition planning and transaction execution. Where do you guys think the transition planning falls down? Why aren't we getting more of this preparation being done before owners seek out the transaction?

Simple reason, to be honest with you, because most advisors are not comfortable with with it. You're not comfortable with the emotions yourselves. You're not comfortable dealing with these issues, soft issues, so you avoid it. So you're not bringing it up to the owner, so the owner's going blind because he doesn't know it's an issue. So what— that's why I was telling you, you need to expand your awareness and your way of thinking to do the numbers but also do the soft issues.

I agree with Jack, and I think there's another factor here. I think that besides what he mentioned, we gotta go from being transaction-orientated in getting that success fee to, you know the old story about the old bull and the young bull walking down the top of the valley? Well, that's the way we gotta be. We gotta be like the old bull. And what it takes is we got, as advisors, we've got to be educated. And as business owners, they have to be educated. Because I'll tell you what, I found out and I've seen some real tragedies out there in my, what, 36 years or going on 37, real tragedies out there. And they shouldn't, it shouldn't happen to people. And it's because they rushed into things and they didn't plan for it. And it's not a pretty picture.

And I have good news, folks. I am not going to ask Peter to tell us about the young bull and the old bull. That's the good news. My experience has been that business owners and entrepreneurs, they're very good at one very particular thing. We represent a bunch of chemists. And they know chemicals and they know process and they know how to source raw materials the cheapest and they love all that stuff, which I don't understand at all. When I bring up these kinds of issues, they get very uncomfortable. They just don't have anything to relate to. So I try to bring it up in the context of this is how you can do your family some real good by doing these things and not talking particulars about it because they're not going to understand that and don't care to anyway. But getting them to leave that comfort zone of, "I do chemicals," is the first hurdle, and then after that it becomes easier.

Well, to keep us on time for the keynote upstairs, I want to thank you for joining us for this short program. Obviously, you realize we've only scratched the surface of what can be involved to actually increase the value that we bring to the deal while increasing the success of the deal for everyone—advisors, sellers, and buyers—by addressing the owner's transition planning early and concurrently with the transaction process. Please reach out to our panelists. Their bios and contact information are in the slide deck, they're in your brochure, and they're on the website. They have materials that are up on the MMA table in the expo. Please Seek them out, seek me out if you're at all interested in the MidMarket Alliance and what we're doing, what we're positioned to be able to do to prepare companies to be better users of your services for a better outcome for everyone. I need to first reiterate my thanks to all of our panelists. We'll go in reverse order this time. Tony Madonia, CPA, JD, Anthony J. Madonia and Associates, Ltd. Jack Beauregard of the Successful Transition Planning Institute, and Pete Crisman, the founder of the Master Plan Institute. You guys tongue-tied me with all those names. But our panelists, these are the experts. They're not talking from theory, they're talking from decades of experience. Please listen to this wisdom. It's been given to you at a very high level. There is so much deeper that you can bring out of these guys. Seek them out to help you and your clients. Thank you for joining us here this afternoon.