Month: June 2023

In the fast-paced world of business advisory services, the importance of lifelong learning is invaluable. As an Exit Planning Advisor, your commitment to continuous education is crucial for staying one step ahead in a rapidly evolving industry. From new capabilities with Artificial Intelligence to financial and technological advancements, how can you stay on top of your game and set yourself apart from the competition? 

Throughout the course of your professional life, you’ve probably heard the term lifelong learning. Furthermore, it’s likely that the value and importance of education has been drilled into you from a young age and has ultimately led you to where you are today in your role advising business owners. In this blog, we’ll explore why Exit Planning Advisors must continue to grow their knowledge, and how obtaining a license from BEI Exit Planning can transform your advisory practice. 

Why are there continued education requirements for professional advisors? 

Continuing education requirements exist for a reason. If continuous learning wasn’t beneficial, there wouldn’t be industry standards mandating professional advisors to accumulate varying amounts of continuing education (CE) credits each year. For context, the BEI Certified Exit Planner (CExP) designation requires 30 accrued credit hours over a two-year period. 

A recent article by CE Records highlighted that “Advisors who continually engage in advanced education and continuing professional development activities will reap the rewards through increased client trust, more meaningful and personal discussions of financial matters, and compliance with industry regulations.” 

Many professional advisors would likely agree that part of their responsibility as an advisor is to maintain accurate and current information as it relates to industry trends, tax regulations, best planning practices and more. Advisory services is an industry with many moving parts, therefore, it makes sense that the landscape is growing and evolving. With such rapid growth and change, it’s not enough to just sign up for a few Exit Planning courses and call it good. 

Putting practical knowledge into perspective 

While foundational education is important, practical knowledge plays a crucial role in attracting and serving your business owning clients effectively. Consider the process of choosing a hair stylist. Your hair stylist had to complete levels of certification and pass board exams to be licensed to perform those services. However, we typically rely on other factors outside of their foundational education when determining if they will fit our needs. 

Do their service offerings align with the latest trends? Is their pricing structure comparable to other options in the market? Do they have a scheduling system in place that makes it easy and seamless for you to book appointments with them? Do they have positive reviews online or have you heard good things from a friend? 

All these considerations can be used to prove the point that practical application of a professional’s knowledge is typically deemed more important to a prospect than what their foundational knowledge is, and when and where it came from. 

The same can be said when looking at it through the lens of an Exit Planning Advisor. You’ve taken a course, perhaps even invested time and money into earning a certificate or designation. However, how has the creation and execution of your Exit Plans fared for your clients? Have you adapted your fees in a way that makes sense with your target client? Have you had to collaborate with other advisors to determine the direction of a plan or consult them with a specific client problem? With the right system in place; one that is designed to meet your clients where they are; your practical and foundational knowledge become more than just education.  

Why Exit Planning Advisors need more than education 

At BEI, we firmly believe that it’s not enough to go through a training program or sign up for a few courses on Exit Planning. Having a proven, repeatable process and access to the right tools helps you do more for your clients. 

With a BEI License, you get the framework that allows you to better understand your client’s goals and create a solution for them. Whether used for marketing, planning, or both, a BEI License allows for practical knowledge of Exit Planning to be applied and challenged every time you are working with a business owner client. 

Embracing education is one thing, but being able to use it in the context of Exit Planning engagements opens doors to higher earning potential, greater job satisfaction, and access to more resources and referrals for your services. 

How a BEI License ties it all together

BEI’s Exit Planning training is designed to give you the fundamental tools that you will be able to use and apply with one of BEI’s Licenses. Performing Exit Planning services is a learned trade that requires continued, lifelong learning. 

Ready to harness the power of education and tools to transform your planning practice? 

Contact us today so we can help you determine the best path for your training needs. With BEI product offerings, training is included at discounted rates when a license is purchased to affirm our belief that an Exit Planning License serves as a practical application tool for your training. 

An unexpected and untimely death is a business challenge that most business owners don’t want to talk about. Even fewer like to plan for this inevitable outcome, especially younger owners who don’t plan to die anytime soon. According to BEI’s 2022 Business Owner Survey, a significant percentage of owners say that the largest obstacle to Exit Planning is that they believe it’s too early and not necessary yet.  

While it’s also reported in the survey that a larger number of young owners are considering planning than ever before, it’s unlikely that many are concerned about death or disability. Though it may seem morbid, it is critical for owners to plan for their death well before they’re ready. Failing to do so could majorly disrupt the lives of the people they care about, their businesses, and their legacy. 

What Happens Without a Succession Plan?

As an Exit Planning Advisor knows, an essential  function of an Exit Plan is to dictate the next steps after the owner dies or becomes disabled. However, it’s often challenging to convince these owners, especially younger owners, that a succession plan must be a high-priority issue. 

It’s important to share with your clients the various ways a business can quickly spiral into chaos without a plan in place. Consider a few of the following pitfalls:

1. Loss of direction – If there are no succession plans in place or any form of business continuity instructions, there may be a power struggle or confusion over who needs to take over responsibilities. This problem of delegating tasks can cause a halt in business growth, ultimately leading to a hold on business goals and an increased potential for rushed decision-making.  Spoiler alert: Just go watch the last season of Succession! 
2. Loss of Employees – In the midst of chaos, owners run  the risk of losing valuable employees who jump ship due to a lack of clarity and direction. Additionally, a company facing succession struggles might have trouble attracting potential new hires and filling leadership positions. 
3. Loss of owner’s knowledge – When the owner is the only person in the company who has knowledge of the business, its operations, its customers, its partnerships, etc.,the business likely isn’t in a position to run without them. With such heavy reliance on the owner, it is hard to manage succession challenges that come with an unexpected death, especially if none of the knowledge and processes are documented. 
4. Loss of customers – With any change, the turmoil that comes with a sudden death or disability can increase the risk of losing customers and partners. If employees leave or management shifts, the level of service could suffer, leaving the business vulnerable to customers jumping ship. 

How to Reduce Risks 

While it can be a lofty and challenging task, your job as an Exit Planning Advisor is to make your clients aware of the risks of failing to plan, and encourage them to start a succession plan as early as possible. 

Death can come unexpectedly and destroy their life’s work. When the goal of an Exit Plan is to protect that important work, you must help your clients mitigate the risks that an unexpected death can bring by utilizing the following tactics: 

1. Find out what is important to the owners. Asking your client what matters to them most gets to the root of their values-based goals. The first step of planning for a successful future is determining the post-exit goals that will ultimately guide the Exit Plan.  
2. Start planning even if it seems it’s too early. Time is one of the most powerful weapons in planning. However, it’s also limited and difficult to gauge how much time an owner has left. Consider urging your clients to start with an estate plan and a business continuity plan in writing to get the ball rolling. 
3. Become inconsequential. A business that relies heavily on the owner often dies with them. Help your clients commit to training employees or hiring next-level management that can run the business in the owner’s absence.   
4. Build something of intrinsic value. As advised in a recent article by Business News Daily,mitigating the risks that come with an untimely death include taking steps to improve business value. “If a business is to survive a founder’s death, it must have intrinsic value beyond what they brought,” the article noted. “If a founder wants their business to outlast them, they must create something worthy that others are motivated to own and continue.”  
5. Document all processes and relevant provisions. It should go without saying that documentation is key in preparing for the worst case scenario. As an Exit Planning Advisor, getting your clients to start planning in small ways such as process documentation can be the motivation they need to continue down the Exit Planning path. 

The Bottom Line  

A business owner’s unexpected death will almost certainly have negative consequences for a company. The prospect of dying without a plan in place can be scary. However, if the business and the owner are able to establish a succession plan and take the necessary actions to prepare, it can cushion the impact. 

Burnout has been one of the biggest buzzwords in recent years. In fact, in 2019 the World Health Organization (WHO)  officially recognized burnout as an official syndrome due to  chronic workplace stress that has not been successfully managed. 

As a professional advisor to business owners, it’s important to be able to acknowledge the signs of burnout in your clients, and more importantly, how to work with them to overcome those stressors and stay the course when it comes to planning for one the most important financial events of their lives: the exit of their business.

In this blog, we will: 

• Define burnout as it relates to an Exit Planner’s business owner clients
• Point out some common signs of burnout in business owners
• Discuss tactics to overcoming burnout 
• Emphasize the consequences of not addressing burnout 

Defining Business Owner Burnout 

The WHO characterizes professional burnout by three factors:

• Feelings of energy depletion or exhaustion; 
• Increased mental distance from one’s job, or feelings of negativism or cynicism related to the job; 
• Reduced professional efficacy 

Looking at burnout through the lens of Exit Planning, burnout can be specifically problematic when working with owners who wear many hats. The mental and economic strain of running a business in a constantly changing and challenging marketplace continues to grow. 

A recent Forbes article cited statistics from a new national survey that reported 42% of small business owners have experienced burnout in the past month and 24% reported that they are currently experiencing burnout. The same article indicated that present-day burnout is likely building on top of the mental issues that were created for business owners amidst the Covid pandemic. 

As an Exit Planning Advisor, what can you do to ease the exhaustion felt by owners who have been bearing this impact for many years? Is it possible to keep them motivated enough to continue or begin an Exit Planning engagement? 

Signs of Burnout in a Business Owner

Among all the stress that comes with owning and running a business, burnout develops deeper from the perspective of maintaining a healthy work-life balance.  “While some symptoms of burnout can be apparent to those around you, many are internal, especially for driven entrepreneurs who pride themselves in their work.” (Friedman, 2022). 

In the conversations that you are having with business owners, you are in a unique position as the advisor to provide perspective to your clients. If you catch on that your clients are questioning their abilities, changing behaviors, or are totally resistant to planning or conversations about their exit, it may be time for them to take a step back and consider the signs and symptoms of burnout. 

A Hubspot article discussing recovery from professional burnout lists the following signs to look out for: 

• A sense of defeat
• Avoidance of work 
• Depersonalization 
• Detachment 
• Loss of motivation or satisfaction 
• Feeling flat or numb
• Feeling trapped or a loss of agency

When it comes to noticing these signs in an Exit Planning client, the consequences could be critical if it means that the owner would procrastinate or put off working on their Exit Plan. Since burnout is specifically caused by some or many job-related factors, there are a few encouraging ways to help your clients overcome these stressors. 

Overcoming Work-Related Stressors

1. Delegate & Focus on Next-Level Management 

As businesses grow, they usually become more complex. Many business owners one day realize that they simply cannot do everything all by themselves, nor should they try to. One of the top tips that Exit Planning Advisors should try in order to address burnout is shifting the focus to delegating tasks and developing next-level managers. 

Next-level managers are those who have the skills and experience to take the business to the next level, and ultimately take over when the owner is ready to exit. By helping your clients recruit and implement management systems, it takes away some of their job-related stressors while also setting the business up for a successful future. 

When next-level managers are brought in as part of the Exit Planning Process, the business begins to rely less on the business owner and without this reliance, there are more opportunities for your client to exit their business on their terms. Even if your client has no intention of leaving any time soon, installing next-level management improves business value and gives them the freedom to focus on the most impactful business needs.
 

2. Reassess Goals & Passions 

As a business evolves, your client’s goals, skills and passions will transform too. 

Regardless of the reasons or details, circumstances with the business can change. When the owner’s plans don’t change with reality, it can inevitably bring out burnout in your client, and lead to frustration for the advisor. It’s important to form habits of frequent evaluation and restructuring when it comes to matching goals with the strategies to get there. 

One of the biggest benefits to an owner working with an Exit Planning Advisor is that planning strategies are designed to shift as the owner’s goals change.  When an Exit Plan is designed to evolve with the owner, there is more potential to pivot and reignite the fire in your clients. 

3. Promote recovery in healthy ways 

When it comes to overcoming burnout, much of it has to be decided and acted upon by the business owner themselves. However, Exit Planning Advisors are often faced with pushback and resistance from owners hesitant to move forward in Exit Planning. These same roadblocks can and will appear when owners are faced with burnout. 

Therefore, encouraging your owner clients to take part in positive recovery methods, even while still working, could help them in the long run. A few ideas to suggest to your owner clients could include: 

• Spending time away or going on a vacation 
• Dedicating certain days and times to go unplugged
• Getting enough sleep 
• Spending more time with friends and family 
• Reconnecting with passions and spending time in nature 
• Starting a group or club with other entrepreneurs  
• Discussing and planning for the owner’s post-exit lifestyle 

Consequences of Burnout 

Burnout can be costly if not acknowledged or managed properly. For business owners, burnout can have consequences that resonate with a lack of planning for the business exit. 

That said, many of the consequences of burnout and poor management of the stressors referenced above can have an immense negative impact on the business in one or more of the following ways: 

• Burnout leads to reactive problem-solving instead of proactive planning. Just as we advise owners to begin planning their exit strategy years before they are ready to retire or transition, the same goes for burnout. It’s easier to make sound judgment and business decisions with a clear head free of stressors.  
• When the business relies too heavily on the owner, the impact is detrimental.  Too much reliance increases the chance of the owner suffering from burnout with too much on their plate. Additionally, when the business cannot run without the owner, the transition to a successor becomes more difficult. 
• Burnout may lead to impulsive Exit Planning decisions. As mentioned, the exit of one’s business is a significant financial event that requires much time and consideration. While Exit Plans are designed to evolve and shift when necessary, it is still important for the owner to be able to make careful choices such as selecting a business successor or evaluating business value. 

The Bottom Line 

One of the most difficult parts of addressing burnout is beginning the process before it hits. While it is possible to address burnout even in the midst of it – prevention and planning before getting too burnt out brings on a more favorable result. 

Fortunately, an inherent benefit of planning for a successful future is that these plans are designed to address many of the causes of burnout. From installing a next-level management team to ensuring the plans align with your client’s evolving goals, planning for a successful future with the help of an Advisor Team can help keep burnout at bay.