Secrets of Exit Planning: John Dini's Advice for Business Leaders and Moderators

Hello and welcome to Mastermind Mastery, the podcast for professionals who want to create and run successful peer advisory councils, or as we call them, PACs for short, or they're also known as peer groups or business mastermind groups. I'm your host, Tina Corner Stolz, founder of Elixir Council, where I've been in the industry running groups since 2005 and now help those like you with education, certification, and support wanting to do the same. At one time, I ran 10 groups, nearly 100 members, and sold my groups For a Good Multiple and recently released my second book, Your Seat at the Table: How to Create and Run Your Own Peer Advisory Councils, published by Forbes and grateful to you that it's an Amazon bestseller. I invite you to join each week where we share strategies and techniques to successfully launch and become a master of running your PACs. You'll hear insights, perspectives, dos and don'ts, learn from my and my guests' mistakes, successes, and get the inside track to key takeaways. Each time we have a guest, we'll be having a bit of fun. So are you ready? Let's get going and dive into today's episode.

So hello everyone to another episode of Mastermind Mastery. I'm your host, Tina Corner Stolz. We have an outstanding guest today and a really, really, I believe, important topic that you'll learn about in regards to exit planning. But I want to welcome Mr. John Dini to today's episode. Welcome, John.

Thank you, Tina. Thank you.

So John is— well, of course, long time overdue, that's for sure. And John's in San Antonio. John and I met because we were fellow Alternative Board franchisees at the time, and we have many, many, many stories that we could tell about that. And, you know, we better not. As I said, we'd be doing a lot of editing again on this episode. So, John, I'm going to start out because I'm going to list for you all listeners out there a little bit of John's background. I think it's extremely relevant to today's topic, but also so that you know all of his accomplishments and especially not only running groups, because we're going to share a little bit about that and roll into those learnings into how he ended up doing what he's doing today, a lot around exit planning. So aside from being probably one of, you know, definitely one of the most, if not the most successful TAB franchisee, um, he also, all right, then parlayed that into his passion around exit planning, where he's an author of many, many, many, many, many books. So, you know, everything from, right, the Exit Planning Coach Handbook to Your Exit Map: Navigating the Boomer's Bust, to 11 Things You Need to Know About Selling Your Business, and Hunting in a Farmer's World. That's the Celebrating the Mind of an Entrepreneur. Did I miss one? Did I get them all?

That's all of them.

Yes.

And a columnist— columnist, easy for me to say— around the whole concept of it's 2 o'clock in the morning, right? What keeps you awake? So Awake at 2 o'clock in the morning. You know, for all of us out there that are running businesses, um, also multiple certifications. So here we go. CBEC, CBEC. So that's Certified Business Exit, right? Consultant. And there's CEPA. So Certified Exit Planning Advisor and CEXP. So Certified Exit Planner. Did you get anything new since the last time I saw, you know, saw all that by your name?

No, the CBEC is the newest. Okay. And I, you know, there's a couple others in behavioral profiling and stuff You know, one from TTI, as you know TTI well. Yes, absolutely. And a couple of others that, you know, I really don't need. I have a very short name, so I've gotta beef it up with some more letters after it. Yeah. You know, it's 4 letters, first name, 4 letters, second name. Everybody wants more. They're like, is that it?

It is.

But after a while it gets ridiculous.

Yeah, well, you, you have them, so you look very official and professional. And of course, last but not least, you're the founder of your current business, which is The Exit Map, right?

Right.

And that's where we're going to get into all these tools and things you have up your sleeve to help those who want to help owners with exit planning. So let's start out first. Funny story, as I understand. How did you even get in? So we need some humor on this, on this podcast. So here we go. So how did you get into the peer group business?

Let's start there. I was sitting in an airplane in LaGuardia at the time. I was commuting back and forth from San Antonio to Manhattan, where I had an office and a full-time staff, and we were building physician networks around the New York metro area. And I would fly in almost every Monday morning and then fly out Friday night to go back to San Antonio. And it was winter and it was LaGuardia, which means it was like the third time the plane got de-iced before we could take off. And everybody had been stuck in the airport for so long that there was absolutely nothing left except the Wall Street Journal. So I'm reading the Wall Street Journal and we were sitting on the tarmac a couple of hours. So I read the whole editor, the whole journal, the editorials, everything else. I was down to the classifieds. And so I'm reading the classifieds and I see this little teeny 1-inch ad that says executive dream franchise. And with an 800 number. And I was really, really sick and tired of what I was doing, for obvious reasons. So I tore it out and I said, this would be a good thing, maybe I should check this out. And I stuck it in the pocket of my suit. And that's when we wore suits every day, um, and the suit was on the weekly rotation, so went home and went on the hanger and was promptly forgotten for the next 3 or 4 weeks till I got those 2 suits down to wear for the weekend. And I put it on and there was a crinkling in the pocket and I pulled it out and I saw it and I said, what the heck, it can't hurt. I'll call. And so I called and it was the alternative board. And I went up, I actually flew to St. Louis to watch the founder, Alan Fishman, run one of his peer groups. And I said, I think I could do this. This would be a lot of fun. And so I wound up becoming a franchisee. The funny part of the story is it was multiple years later and I was talking with David Halpern, who at the time was the president of the Alternative Board, and he was talking about how many times, how many different ways they marketed to get people interested in a peer group franchise. And he said, we've done this and we've done that. We've done emails and we've done postings and social media. I said, don't forget the ad in the Wall Street Wall Street Journal. He said, oh yeah, we did that for a year. He said, that was the biggest waste of money we ever had. Didn't get a single decent prospect out of it. And I said, well, you got one who just happens to be the most successful franchisee you've ever had. So as John Wanamaker said, 50% of all advertising is wasted, but you never know which half.

Which you never know. Exactly. So tell the audience about, um, so you can set up so they can understand. Tell about how many groups did you have, what types were they, and I know you had others running them besides you.

Yes, obviously I had 15 groups, so I couldn't run them all myself.

Yes.

Um, and as a matter of fact, that success has two sides to it. Um, Certainly, you know, we had a system down. We were building groups. You know, I had 8 contract facilitators running the bulk of them, almost all of them. At one point I was down to one group and that I was running personally and it was no fun anymore. I mean, I was— all I was doing was marketing memberships. You know, I was doing presentations, marketing memberships, interviewing people, signing them up, and then shuttling them off into a group with somebody else to coach and, and help. Um, and that's not why I got in. So in '17, my franchise expired and I declined to renew it. Uh, I contracted as an independent contractor to continue to run 3 groups myself, which I still do today. Um, and, uh, I let the rest of it go just because I wanted to move on and do other things. It had been 20 years. I I had a strange franchise agreement. They were, it was very early in the process and I got a 20-year franchise agreement and I had run it out to the end and I said, I don't wanna be doing this anymore. And they sent me a new contract that says, I promise that I will market faithfully and interview new members. And I sent it back. I said, no, if this is one of the conditions, I'm not doing it. So since, so what is this, '24 now? So for the last 7 years, I've been running 3 groups. Very happy doing it. You asked about starting out. Um, I, I don't think our, our advice and our training is as minimal as it was back then, uh, was right because, uh, we were instructed to go for the low-hanging fruit companies under a million dollars in revenue that were easy to sign up. They also take a lot of work and they're easy to lose too, you know. Exactly right.

They don't have any money.

Right. And yeah, if you're— whatever you're charging them, it's probably their entire consulting budget and it's more than they ever planned on spending in consulting. So I learned along the way to move to mid-market groups and then larger groups. I have right now, I have 3 groups still, and one probably averages out at around $15 million in revenue. The second one is probably more in the $30 million to $40 million revenue range. And then one— collectively, there's 10 of them, they were over a billion dollars. They're— I think they're over $100 million average. But well, that would be a billion dollars among 10 people.

Yeah.

Uh, they were over $100 million average. Um, and you know, they're the easiest ones to run because, you know, when they have an issue and we discuss it, you know, they go, that's a those are great suggestions. I'll go tell somebody to do that.

And they get it done. Yeah, exactly. They have the ability to execute. Yes.

Yes. Yeah.

And so now here you are. You have, through, through all of this though, have seen some things, and I know you saw some trends. And so can you talk a little bit about, yeah, not only those trends and kind of how that led you into exit planning?

Well, it's— well, one of my contract facilitators was a business broker. He made the mistake of buying one of his listings. It was one of those cases where he said to a buyer, I'm not gonna offer, I'm not gonna present that offer. It's insulting, it's so low. But, you know, I have fiduciary responsibility to present all offers. He presented the insultingly low offer. The seller said, okay, I'll take it. And, and then, and then the buyer couldn't get financing. And so my facilitator said, well, if I'd known you'd take that offer, you know. So he bought the company, he gave up his brokerage, I took it over. Uh, by the way, he became a TAB member, he became a peer group member, and, uh, he grew the company from $8 to $60 million over the next 15 years. So he didn't do badly with No, he did not. Good decision. And so I tried business brokerage for a couple of years, again, working with very small companies. Didn't care for it that much. But along the way, I stumbled across an organization that was doing exit planning. And certainly when you're— especially when you're dealing with smaller companies, you know, they call you up as a broker and they say, I want to sell my business. I'm ready to get out. And you go to see them and they're so not ready to get out. You know, their, their, their financials aren't in good shape. They haven't been tracking the things they need to track. They don't have a management team built. You know, all the things that make your company have any value whatsoever. You know, they've got no differentiation. They don't know how they go to market. You know, I, I, I used to kid all the time interviewing members and I would say, well, You know, how do you, how do you get business? You know, why did— no, what was the question? You remember from, from the form we used to use for interviewing. Why do people do business with you?

With you?

And the answer is the same every time, right? Well, we know what we're doing. We're really good at doing it. And, you know, we're not cheap. I mean, we're not the most expensive in the market, but we're not, we're not the cheapest. And if we do something wrong, We stand behind our work and we make it right. And I would, I would respond, that's really impressive. And it completely differentiates you from all the people that advertise. They're clueless. They rip off the client and they leave them high and dry. How many of your competitors advertise? Yeah. So, um, it's the same thing with exiting. I'm ready to exit. Can you sell my business in 30 days? No. As a matter of fact, I don't know if I can sell your business at all. You know, it's a mess. It's a job. You know, you're working 60 hours a week. You've never trained anybody properly. So all those things become part of what you're really trying to emphasize in the peer group environment. And so when I came across exit planning and a way to formalize that, I gave up the business brokerage immediately and just started focusing on that. And being the person I am, I developed a bunch of tools so that I could do the process the same way every time. You know, when I started this 11 or 12 years ago, 60 or 65% of all the businesses in the US with 5 or more employees— real live businesses, not, you know, REITs or partnerships or something, um, were owned by people, uh, 48 or 47 years old or older. Today, 51% are owned by people 59 or older. You know, it's still a boomer-dominated market.

Yes, it will be for a little bit.

And if you look at the studies, it's abysmal how many of them have a written plan. It's in the high teens, uh, and these people that are 60 or 65 or 70, you know. So it really is a, a place that needs a lot of help, and the sale part of it is difficult. I'm not going to make any bones about it. You know, it's like selling life insurance, you know, or, or, you know, selling funeral preplanning, you know. Yep, you're right. I need to do that. I should do that. I'm going to do that. I'll get around to doing that later. Later.

Yes. And then they call you and it's— they want it 30 days.

Yeah.

Yeah. So, you know, two things. I'm hearing you talk about. And one of the things I do know that you're passionate about, which is also a lot of times you find— so you've got your members in the group too, and they're part of where this intersection lies, is not letting your members not have a plan.

Right.

Right. Right. And because you've also noticed something else. Which is there's the part about getting ready, the business ready, but what about the person being ready?

Yeah, it's, it's a two-pronged attack. I mean, for instance, a lot of my business is management buyouts. Uh, you know, a lot of, a lot of businesses are transitioning internally now. I mean, the whole intermediary community, the business brokers and investment bankers and private equity collectively account for about 15,000, 14 or 15,000 transactions a year. There are almost 150,000 baby boomers hitting 65 every year that are business owners. So, you know, business owners are, are, Like 80% have to figure out their own way out. You know, the idea of I'll just put it up for sale and somebody will buy it just doesn't happen. So if we're doing a management succession, for instance, and this is true for a third party, this is true for any kind of sale, there's two courses of action. The first is the owner, you know, and I'll come back to their life after in a bit. But as you're figuring out the finances of transferring the company, you also, if you want to be able to qualify with any lending institution, you also have to figure out how the management is going to transition and who's going to be doing these jobs, because that is a very specific part of the SBA underwriting process, is they want to see who's handling the banking relationships, who's talking to the accountants, who's handling the key customers, who's handling the legal and planning stuff? And if the answer is me, me, me, me, they're not gonna finance the buy. So, and then the other half of that is studies show, and there's two studies done, one done in 2013, the other one was done in 2022, that 75% of owners are miserable a year after they sell. And that's because they don't have purpose. They've spent their life building something, training people, coming up with systems, creating new products or ideas, going out, helping customers, selling. And not that I have anything against golf, I don't play it myself, but I'm too ADD to go and do something for 4 or 5 hours. That just doesn't work for me. But I'm telling you, a year after you've exited, taking a stroke off your handicap isn't going to do it for you.

No, no. It's extremely rare that somebody is really happy that that's all they're doing. Yeah, it just is. And it's for probably a special reason. So you're absolutely right.

It's who we are. It's who we are. We create things, we build things, we being business owners.

So how have you in your groups helped the members get their head around this and make some steps towards it, both in the business and then also personally figuring that out so that they don't wake up one day and go— Side note, suddenly a lot of times they think, oh, tell me if this is accurate. I've got 5 more years or whatever. But then one day they wake up and go, oh, no, now I'm done. And that was only like a year.

Yeah, no, and, you know, talking to them about it on a regular basis, uh, kind of puts them on that slippery slope. They're thinking about the end game, and sometimes, you know, it, it doesn't have to be now. I mean, I just presented to a group of employees last week a 10-year plan, uh, and the owner wants to keep these people on and He wants to retire in 10 years and he wants them all to still be there and he wants them all to be totally dedicated to building the company. So that's one I did. I did a family. I started a family transition with another member 5 years ago and we set an income goal for the owner. And over that, his son and his daughter, who both work in the business, would receive— excuse me— profit sharing of any amount over that. Well, turned out he made a COVID-related product, which he didn't even know was a COVID-related product when we did this plan, right? Both his kids are now living in beautiful homes that are 100% paid for. Their kids' college education is totally paid for, you know, and they're running the company and COVID's over, it's dropped back off. But in the meantime, having that plan, he didn't have to decide what to gift the kids, what to give them, should they have anything. They had an automatic. As the company started making a lot more money, it flowed out to them. And thankfully they were both very responsible about it and worked their tails off for it. So, A lot of, a lot of this planning is just stuff you should do with your company anyway. It's just we're putting a date and a deadline on it. When do you want to have this done?

I think that's key. I think you just said something that's really key. You have to have a deadline on it.

Yeah.

You know, and a date for some accountability, right? Well, as we start to kind of, you know, wrap up, is there anything else that comes to mind that you would want to share with the audience in regards to you know, if they're out there running groups and they have, you know, these CEOs in them, and, you know, what would you, you know, maybe advice to give them in regards to helping their members with the whole exit planning kind of conversation and in a group setting, right, where they all help each other?

It's certainly, it's a topic for a peer group, uh, just to go around and see who has planned, who's thinking of what, how, you know, you can start with a a very simple question. How much longer do you plan on working? And most of them will say, well, I don't know, you know, I'll think about that in 5 years. No, no, no, stop. You know, and that's our job as coaches, right? Not to let them slough it off. You know, say, no, no, wait a minute, stop. How much longer do you want? Is it 15 years? Is it 20? Oh no, I'm not gonna work another 20 years, not at this. You know, okay, let's back up then. Is it 15? Is it 10? You know, and just starting that conversation leads to, you know, when the next conversation is, well, what happens then if you're not going to be here in 10 years? What's going to happen? Are you going to have made enough money just to step back and lock the door on your last day and turn out the lights? Or are you going to need money from the value of this business, you know, and they're very general questions. But what I tell people all the time, and I don't want to run over with you, but, you know, if you go out to Sand Hill Road in Silicon Valley to Andreessen Horowitz or any of the other big VC guys and you give them a plan, one of their questions is, what is your exit strategy? And they don't ask that because they want to get rid of the owner. Usually they want to put handcuffs on the owner and keep them forever. But they want to see that you've thought through, is this scalable? How are we going to monetize it? What is its liquidation value supposed to look like? Because that's the business they're in and they want to know that you've figured this out. Why shouldn't you be figuring it out for your own business?

Yeah. Well, and you owe it to your employees and you owe it to your family to figure it out.

Right.

And the stakeholders and your clients. All the above. Yeah.

You're getting your customers and, you know, your vendors and, you know, there's a whole lot of people. And every business owner I know is conscious of the multiplication effect of the employees to the families, too, and especially in our business, you know, us to our members, to their employees, to their families. You know, we're, you know, if you're running a couple of peer groups, you're probably helping guide the future of hundreds, if not thousands of people.

Yes.

It's a lot of responsibility.

It is. It is. And that can't be underscored. So as we have our kind of last minute here, what one piece of advice would you share with the audience? It could be about anything, but in your wisdom of running groups forever and ever, and you've got those out there, moderators, chairs, facilitators, what would you share with them?

I got this. I've got to give attribution. I got this from Kerry Bolton, who is one of our subscribers for the ExitMap stuff down in Melbourne, of all places. So I'm not going to try and imitate her accent when I say this. Get your stories lined up. Business owners respond to stories, good stories, bad stories. This could happen to you stories, look what not thinking about it did to this guy stories. But business owners respond, stories are the oldest way of communicating ideas on the planet. We are genetically disposed to put pictures to stories, and that's how you can communicate whatever you want to communicate to business owners. I used to do it when I was signing up people for the peer group. I'd tell them stories about the members in the group. They go, oh, I want to know that guy. I want to know the guy that said that.

And it makes it real.

Yeah.

Well, John, thank you obviously for all this time and great sharing of insights, particularly around such an important topic as exit planning for everybody that's usually in a group. And so if anyone would like to get a hold of you, How can they do that?

Ah, the company is MPN Incorporated. That's Mike Papa November if you're into NATO signatory signals, and it's MPNInc.com. The tools are at ExitMap.com. And if you're interested in working with owners in that area, you can go to ExitMap.com and take a test drive and you'll see the tools that we start the relationships with.

Excellent. John, thank you again. And to everyone out there, I'm sure you're walking away with wonderful insights. And all these links will be in the episode show notes that you can get them there. And get— particularly encourage you to check out John's resources and his tools because they're, they're really, really good. So until next time, thanks for everyone, and another episode next Tuesday. And until then, go make it happen.

Hey, moderators of groups, thank you so much for listening to today's podcast. To get access to today's show notes and exclusive content and resources, visit TinaCornerStolz.com/podcast or LXcounsel.com, where you can also become part of an exclusive online community, attend our academy, or get free resources, templates, checklists, and more. And you can even contact me there as well. So if this episode resonated with you and you know someone who can also benefit from listening, please share with them by taking a screenshot and even posting on your social media. I also love reviews and appreciate hearing from each of you, those actually doing this wonderful work. Please tune in next week for another episode of Mastermind Mastery. And I'll close by sharing something my mentor did after every learning moment. He shared a shiny pebble from his pocket with anyone he passed knowledge to and asked them to forward that pebble knowledge on. So now I encourage you to go pass on a pebble, the takeaways you learned today, to either your existing groups or fellow peers. Now, Go make it a great one.