Shownotes
BEI or Business Enterprise Institute helps many entrepreneurs exit their businesses, choose their successor, and carry on with their dreams by supporting advisors. Jared Johnson and Elizabeth Mower, CEO and President of BEI respectively, share how they focus on working with advisors who help business owners in exit planning. They discuss how vital it is to create tools and online resources that can help advisory firms, CPAs, attorneys, business consultants, and coaches accomplish, deliver, and implement action plans for their clients. Moreover, they share why much emphasis is given to systematized education and training in helping advisors and their clients.
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How BEI Exit Planning Solutions Works with Jared Johnson and Elizabeth Mower
At BEI, we believe that these small and medium-sized business owners and the companies they run are the lifeblood of our economy. Our mission is to help as many of those business owners as possible exit their business when they want, with the money they need, choosing the successor that they’d like to see carry on their dream. We do that by supporting advisors to the business owner community: financial planners, attorneys, CPAs, wealth advisors, insurance advisors, and any advisor who works with the closely held business owner is somebody that we support. We want to provide the tools and resources to allow them to be the quarterback of an exit planning team.
We have Jared Johnson, the CEO of BEI. We have Elizabeth Mower, the President of BEI. We’re at the world headquarters of BEI in Denver, Colorado. Thank you so much for taking the time.
Bob, thanks for having us. We’re excited to share what BEI does and how we support the business owner community through their advisors and support and help other entrepreneurs understand how we operate. Maybe they can learn a little bit from our successes and certainly some of our failures in running up small and medium-sized businesses.
Tell me about your business and who you serve.
Our business is generally focused on helping business owners benefit from their lives’ work. We had to try and figure out a way to do that. In the distant past, we were helping one business owner at a time to figure out what they wanted to do with the future of their business. We quickly figured out that it was going to take a long time and we wouldn’t be able to get to everybody. We thought it was important work to do. We ended up realizing that we could have a much greater impact on the business community across North America if we work with advisors who help those business owners in each community. We’re on the ground every day meeting with business-owning clients and helping them figure out solutions to their problems and paths to their futures. What we decided to do is create tools and online resources that help advisory firms, CPAs, attorneys, business consultants, coaches, and people like that accomplish, deliver and implement action plans for their business-owning clients. We’re a behind-the-scenes tools provider.
It starts with education and making sure advisors truly understand what we believe is exit planning. A lot of business owners sometimes think, “When I’m ready to sell, I’ll call somebody,” or “I’m never going to transfer this business. I’m going to die at my desk. This is who I am.” That’s fantastic, but we need a plan for that as well. Even more, we see business owners out there who want to transfer to key employees, management staff, and kids, but the challenge with that is none of those people have any money. How do we help them accomplish their financial goals and objectives? Working with folks who don’t have any money to buy him out and that’s what exit planning is.
With us, it’s not about selling a business. It’s not about a specific type of transfer. What does that business owner want to have happen post-ownership or maybe not even post-ownership but post-working? “I want to own this business, but I don’t want to work here anymore. I want to spend time with my grandkids. I want to travel the world. I want to spend time with my family.” How can they accomplish those unique goals and objectives with regard to their future? What BEI does is it starts with training. We then have a marketing platform for advisors to get the word out, educate business owners on what we believe exit planning is, and then a software platform that helps advisors gather data and turn that data into actionable steps for business owners to accomplish those goals.
In the podcast, I talk to business owners all the time and typically the before and after, “What are you going to do when you get done here?” “I don’t know. Maybe I’ll sell.” “What are you going to sell for?” “I’m not sure.” “Do you have any idea what somebody else like you sell for?” “No.” I don’t think they’re so busy in the business. They have a nominal amount of time to think about strategically being on the business. I wouldn’t know for many of them if they differentiated in their business whether they have a job or a business. I think about trying to scale a business. You are trying to scale a process. For you guys, if you were looking back five years ago, what do you see the difference in where your business was five years ago and now as far as scale goes?
I’ve been with this company for several years. We were much more of a business to the individual client, hand-holding relationship, let us guide every customer through their use of our tools, their way of learning about our areas of expertise. We did a lot more one-on-one company to the customer because we didn’t have as many customers. When you don’t have very many customers, you can afford to do that. Then, our customer base starts to grow. We realized if we don’t scale our own services, we won’t be able to keep up with all of these.
If something's not working, get rid of it and move on.
Ten years ago was ‘08, ‘09. After that crash in the market, there were a lot of delays on transactions.
What we hear from the field is that businesses that survived the Great Recession, businesses that managed to somehow get through it, were saying things to their advisors like, “I don’t intend to ever do that again,” or “Thank God I made it through, but I made some mistakes and it’s a wakeup call. I’ve decided to do things better. I’ve decided to be more thoughtful. I decided to work on my business instead of so much in it.” The business that came out of the ‘08, ‘09, ‘10 difficulties and economic challenges were admittedly the stronger of the businesses that went into it. Those owners learned their lesson. There was a lot of demand that came out of the very tail end of that recession for people going to their professional advisors, going to their most trusted advisors, business owners saying to them, “You’ve got to help me because I don’t intend to go through that again. If something else does happen, I need to be prepared. How are you going to help me?”
BEI comes in behind that professional advisor or firm and says, “We have the tools and the processes to help you do this.” To get back to your point, as that market grew and we had more demand for our services then we had to say, “We can’t one-on-one help each one of the advisors and firms that’s using our tools. We needed to come up with more systematic processes. We need to change the way our staff is trained. We need to change the way our internal processes are working. We need to change the way we communicate with our marketplace.” We’ve done all of those things in the last ten years.
Do you have the same problems with everybody else in the business?
Yeah. When I started in 2013 with BEI, you could Google exit planning and the top ten results were how we were planning to exit the war in Iraq and pull troops back from Afghanistan. Now, Google exit planning and the top three pages are advisors and support firms who are looking at supporting business owners. A few years ago when I started, we had 1 person to 25 or 30 clients from a relationship standpoint. As that tide turned and we started working with enterprise organizations in the larger groups and big companies, we said, “It doesn’t make sense in the business world to have a 1 to 25 person ratio.” Elizabeth and her team, what we’ve done at BEI is to develop a support model that is systematized and help people to find their solutions on their own, whether it’s our website, whether it’s the articles and content that we create or the support center within our tools. The advisors and the clients that we work with, we are training them to be more self-sufficient and act on their own but access our tools and resources without having to pick up the phone and call us. A few years ago, if they needed something, the primary methodology of reaching out to us was we better pick up the phone or send an email. Through the implementations of systems and processes within our organization, our staff can touch instead of 1 to 20, we’re closer to 1 to 200 people that they can reach out to and engage with.
When you look out at your prototypical ideal advisor of whatever discipline, what does that ideal client look like? What do they have to say, do and behave in order for them to embrace what you do?
I talk about this a lot in our training programs. Their professional background is not especially critical to us. There are other areas of expertise not particularly important to us. We might have an M&A transaction attorney sitting in a seat at our national conference next to a business coach who’s sitting next to a 30-year CPA and so on and so forth. Their professional backgrounds are extremely diverse and they’re not that important to us and don’t make any difference in how they use our services. What I tell people is that they have one thing in common and there’s a thread that connects everybody who uses our tools. That is, they are a professional service provider who has business-owning clients and genuinely enjoys helping those people plan for a successful future.
Those words are important. You have to have business-owning clients or be involved in the business marketplace and then you have to actually like helping them plan for the future and solve problems. Two CPAs that you meet at a CPA training or educational event, one of them is happiest when doing what they call compliance work. Getting data in, creating tax returns, doing audit work, doing all of the more predictable and unstructured aspects of CPA work. The person sitting next to them is also a CPA, same length of time and practice, same firm maybe, but gets the most enjoyment and fun in their day out of business-owner clients coming in to them, communicating or articulating a problem in some way and then they sit together and they try to figure out a solution.
Those people are perfect customers for BEI because our entire business model is bent on business owners who want to accomplish something in the future. We have no idea what that is but we know we can help them do it. Our website is ExitPlanning.com. Exit planning to us is: exit has diminished a little and its emphasis and planning are big. You put big, bold letters on planning and say the exit is whatever it’s going to be. The planning is going to determine whether that’s successful or not. If you think that sounds fun, then Jared and I and our teams would like to talk about how we can work together. That’s how we do things in our training. Do you agree?
Exit Planning: Every business owner leaves their business. By death or by choice, we’re all getting out.
I agree. To your point, every business owner leaves their business. By death or by choice, we’re all getting out. Elizabeth uses that example, each advisor may do the exact same core work but one gets jazzed about what you might think a financial planner does and another is jazzed about, “I don’t know what this business owner is going to throw at me but I know I can help them through it.” Those are the folks that we work well with and support because we know every business owner’s exit is different. The planning and the process that goes into it can be consistent and developed with each of those advisors walking down a consistent path.
Is there a typical behavioral shift that you see in the advisor’s pre and post-training with you guys?
They tell us usually that things are different. It tends to be in their ability to get more proactive. Many of the advisors who we work with are highly skilled at solving those problems, creating those solutions for their clients when asked. Some of the tools and training that we provide help them get a little further ahead of that. They experience some frustration. They’re finding out too late in the game that their clients need help and they wish they would’ve known sooner. We have some things that we do that we help them with, whether it’s education or online tools or even things that are printed. They can take it to their meetings depending on their personal style that allows them to get further ahead, ask questions sooner and explain to their clients, “Every step that we go through together now is going to be towards a much bigger goal and a much more important end result. I’d like to work with you. I’d like to walk with you on that path.” That’s the most common feedback that I hear from advisors. You might hear something different. You work with a lot of our big corporate partners.
From a behavioral shift, I’m 100% in agreement and in alignment with you. The character of the advisor who works with us is that problem solver. They know that they have something to offer. The biggest challenge is they’re hesitant to get into that work and style because they are not sure where to go when they ask the question. What we see is more of a confidence shift. They say, “Not only do I know what I’m going to do next but I also know that if I ever stumble or if I ever get into a point where I’m not quite sure, I do have the support and the resources of affirming who’s been doing this for a very long time.” On the corporate side, it’s more of we’re helping them do what small business owners do and what we do here is create a consistent process and system.
For the entrepreneurs thinking, “How do I grow? How do I scale? Where do I go?” The biggest piece is focusing on a repeatable and consistent process. I came from big banking. I was at Citi Bank for many years. They were always concerned with the client experience. In a small business-owner space or the medium-sized business-owner space, the experience that clients have are so important because every client is so valuable. When we take that into a larger organization that has multiple locations maybe across many different states and they’re concerned with, “If I implement this service or I bring in this new process, John may have a different experience than Sally, and Mary may have a different experience than Paul because I’m not certain that everybody on my team is in alignment and consistently asking the right questions.” When we bring this into larger organizations, what they feel is a comfort in knowing that every client that walks in their door is going to have a wonderful experience with any advisor that supports them.
Looking at the growth of your company, what are your thoughts on influences with respect to leadership and how you take it past that leadership ethos through the culture of your company?
We’ve done a few things we seem to circle around. While we provide strong tools, resources and training to our customers, we learn a lot from them as well. We’re a very collaborative organization with our customer base. I will say that over the twelve years that I have left the professional advisor arenas, that’s where I was before and turned my attention towards building things that serve the person that I once was, I have observed who’s doing it well and who’s doing something different and who’s doing something with more success than others. My greatest influences have actually been our most successful customers. They’re very open and collaborative. We can talk about lots of different kinds of business issues and they’re very willing to share. I love to say there was some business book that changed my life and I do everything differently, but it’s the fact that I’m willing to tell our customers that we’re not perfect. We’re a continuous improvement organization that we accept feedback and even when it’s hard to hear, we’re willing to grow from it and they take that seriously. I get a lot of open and honest feedback, but I have to say they have been my greatest source of ideas, encouragement, and inspiration.
I think that’s absolutely right with how we look at the services that we provide to our clients. I had a mentor a long time ago who said, “Jared, you’re going to get as far as you want in life if you realize one thing.” I said, “What’s that?” She said, “As soon as you realize you don’t know everything, you’re going to get far.” I took that to heart. Not only on our customer side do we look for feedback and say, “What’s working and what’s not working?” I’m more interested in what’s not working because we can shift it or shed it. That’s another thing that I would tell business owners in your audience, you’ve got to make a decision. If it’s not working, just get rid of it. Move on.
We had a conversation about that.
Make the right decisions and make sure that you’re comfortable with the results that those decisions bring.
We were like, “Are we going to keep doing this? Maybe we should toss it.” Within the business and I think within our culture and our people, we take that same approach. Elizabeth and I like to ask our team and we have a meeting every Friday. We talk about what we did this week, what worked and what didn’t work, and we like to listen. I have a sales staff that part of that is dialing the phone. That is not something that I’m fantastic at. I can teach you the right words to say, I can teach you how to be more effective, but dialing the phone and dealing with voicemail 100 times a day is not something that I like to do. I’m not strong at that. I have to hire folks that do the things that I can’t do, that I don’t want to do, that frankly, I’m just not good at.
I have to also, as a leader, be open to their feedback and saying, “If you are doing something well, how do we get that to everybody within the company?” If we’re teaching something or we’re...
