195 Senior Level Advisors in 36 states & Canada, providing exit, transition, and succession planning services to privately held business owners

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Pinnacle Equity Solutions is a national association of senior-level, professional advisors who are all trained and supported in a common system to deliver high quality, customized solutions to business owners regarding the eventual exit from their privately-held businesses

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Exiting Your Business, Protecting Your Wealth by John M. Leonetti, CEO of Pinnacle Equity Solutions, Inc.

Exiting Your Business, Protecting Your Wealth
by John M. Leonetti,
CEO of Pinnacle Equity Solutions, Inc.

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Are Owners Ready to Exit?

Here at Pinnacle Equity Solutions headquarters, we spend a lot of time thinking about the millions of business owners who are approaching retirement age but continue to have the majority of their personal net worth tied up in their illiquid business. One of the most important questions that we ask about this group of owners is “how do we communicate the importance of planning for a transition / exit to these owners?”

In order to answer a seemingly simple question such as this, one must first ask another question, namely, Are Owners Ready to Exit? Or, put another way, do owners recognize the need for this type of planning and how can we assist them in helping to see the importance of planning for this critical event?

Business Exit Readiness Index™

We thought that one of the best ways to answer this question was to survey owners about their thoughts and ‘readiness’ for an exit. To this end, we rolled out a survey tool last year called the Business Exit Readiness Index™ (BERI™). This twenty (20) question, ten (10) minute assessment asks a business owner a series of questions relating to their ‘readiness’ for an exit.

To date, nearly 100 business owners have completed the BERI™ asessment and the results are quite interesting. 85% of business owners who took the BERI™ assessment ranked themselves as having a LOW mental readiness for an exit.

Mental and Financial Readiness

At Pinnacle, we train on and support an exit planning system that starts with an owner’s goals and their ‘readiness’ for an exit. The system measures the owner’s personal diversification away from the business – we call this ‘financial readiness’ – as well as the owner’s feelings towards how much longer they want to work – we call this ‘Mental Readiness’.

8.5 out of 10 business owners who completed the BERI™ survey stated that they had a LOW mental readiness to exit, meaning they wanted to continue doing what they were doing for the foreseeable future. For most owners, this means that they do not want to ‘exit’, or leave their business today. So the questions remains, ‘how can we assist owners with their ‘exit planning’ when most owners do not want to ‘exit’ or leave their business.

Marketing the Exit Planning Message

It is clear from the survey results that owners, by and large, do not want to leave their businesses today. There are a number of conclusions that can be drawn from these survey results. First, one can simply conclude that in order to find a business owner who has an interest in leaving their business today, you would need to speak to a lot of owners to find the 15% who have a HIGH mental readiness for an exit. If your primary business is mergers and acquisitions – or business sales – then this is likely your target audience because you are looking for those owners who want to transact in the marketplace today.

However, if you are like many advisors who read this newsletter, you likely work with owners on a longer-term basis, more as a trusted advisor to that owner’s needs, year-in and year-out. In this case, you likely know from studying the statistics that owners need to do some planning for a successful business exit, but the evidence shows that owners do not want to leave. From that, one might conclude that because an owner has a LOW mental readiness, there is also a low acceptance of planning for a future exit.

Redefining the word ‘exit’ and How to Approach Owners

One of the challenges in the marketplace today is the assumed meaning that owners have around the word ‘exit’. And the message to relationship-based advisors who want to assist owners with planning for their future, is to present the concept in terms other than the word ‘exit’, which owners can interpret as leaving their business, which they do not want to do.

Many Pinnacle Members are taking the findings of the BERI™ assessment and changing their marketing messages to business owners. They are speaking in terms of longer-term, value-enhancing strategies that lead to a future transition. Advisors are also speaking directly to addressing specific issues within the business that relate to a future ‘exit’, such as bolstering and retaining the owner’s management team as well as reducing the overall dependence that the business has on the owner.

The Most Important Skill – Confidence at the ‘Point of Sale’

After seven (7) years of supporting advisors with incorporating exit planning in their practices, what we know best is that when an advisor’s confidence is high during the conversation with owners on this topic, then owners sense that confidence and are more willing to engage in a planning process, even if they are not entirely certain, at first, what their experience will be going through the process. In other words, we know that a future ‘exit’ for an owner is a large blind spot for them – they struggle to see a future where they are not working in their business. However, a confident and well-trained advisor will assist that owner in understanding that a planning process will help guide that owner towards gaining better clarity and making better decisions regarding the future ownership of their business.

Where Pinnacle Serves the Marketplace of Advisors

Pinnacle educates advisors and helps grow their confidence in approaching business owners on this sensitive topic. We do this through our week-long Certification courses. Pinnacle also boasts seven (7) years of delivering our proven, 6-step exit planning process to owners through our 100 Members nationwide. Our Members all have access to the tools that we create to deliver these solutions. And, simply put, there are very few organizations offering this support and, we believe, none as comprehensive and dynamic as Pinnacle.

Concluding Thoughts

Knowing that 85% of owners have a LOW mental readiness should help you to see that in order to assist these owners, you’ll need more than a posting on your website or business card that you offer ‘exit planning’. In fact, I would argue that without comprehensive training and support, it will be difficult to consistently attract exit planning clients.

We are offering a complimentary webinar on Thursday June 12th @ 3pm EST to assist you in learning a bit more about our BERI™ statistics as well as about our Certification course.

Click Here to register for this FREE webinar.

I’m pleased to share today’s thoughts and I hope that join us on this week’s webinar to learn more about how you can assist owners with this unique need.

All the best.

Warm Regards,

John Leonetti, Esq., M.S. Finance, CM&AA
Certified Business Exit Consultant®

The Current Marketplace Need for Owner Exit Planning; Including Why Advisors Either Want to Enroll in Our Training or Partner with Our Members

Here at Pinnacle Equity Solutions headquarters, we spend a lot of time thinking about ways to make our 120 Members more successful and continuing to lead the emerging exit planning marketplace.  With ‘creativity’ as one of our core values, we are constantly creating new ways to have the professional advisors in our Membership be more effective with business owner engagements – we not only view this as our primary job, but we also work tirelessly to listen to our Members to gauge what will be most helpful to their success.


Heading into our fifth year of offering the Certified Business Exit Consultant
® course, and our seventh year of leading advisors in this emerging space, I wanted to share a few thoughts as to why and where exit planning can either fit into your practice or how and where you can connect with Pinnacle Members to assist you with your business owner prospects and clients.


The Marketplace Need

Business owners today face challenges like never before.  They have to compete globally, they need to adapt to technological breakthroughs that disrupt every industry, they need to manage challenging legislation that impact their businesses and, most notably, the Baby Boomers need to decide whether to invest excess cash back into their businesses or to personally save for their retirement.  With owners aging, these decisions become more challenging and create a level of complexity that is fueling a fast-growing marketplace for ‘exit planning’ services.


How Things Used to Be
There was a time when life was more simple for owners.  There were fewer options for owners to transition their business, less capital was available, there were fewer potential investors, and the transition of the business seemed to either be to a strategic / industry buyer or to a family member.  Now, the average business owner with a successful company is bombarded with calls, post-cards, letters, e-mails and other forms of marketing from private equity groups and other investors who want to talk to that owner about a transition of their business.

 

Where Advisors Play a Role in This Process

In Pinnacle’s experience, these owners rarely know what to do with all of these options.  We also hold a world-view that professional advisors play a role in an owner’s life of helping them sort through complexity to make the appropriate, customized decisions for their personal and business goals.  As a result, the emergence of the ‘exit planning’ industry is mostly about helping owners to understand this complexity and to develop a plan to navigate it.  If you are a professional advisor who works with business owners and you are interested in helping them address this complexity, then we suggest that you focus at least a portion of your role as the owner’s trusted advisor on the relevant and timely issue of that owner’s successful transition of their company.

 

Why is This Critical to Owners?

The demographics show that a majority of owners have most of their personal wealth tied up in their privately-held business.  In addition, the most recent findings from Pinnacle’s Business Exit Readiness Index (BERI) assessment, show that almost 90% of owners have a low ‘mental readiness’ to exit their business.  Therefore, if we have empirical data showing that most owners want to continue on with their business but they need to eventually create a plan for the company’s transition, then we can conclude that these owners are in need of solutions that transcend the idea of simply selling their companies.  They are in need of planning-based solutions that follow a process for their eventual exit.  Without such proactive planning, the owners are stuck and much of their wealth and their company’s futures are left at risk.

 

Where Pinnacle and Our Members Can Assist

Pinnacle’s business model focuses on training, certifying and supporting professional advisors who want to add exit planning to their practice.  If you want to be proactive and create a new source of revenue for your business by offering these solutions, then I recommend that you register for next week’s webinar to learn about our training programs.

 

Click here to register for the webinar.

 

However, after seven (7) years in business, we also know that many advisors will recognize that their business owner prospects and clients need assistance but they do not want to lose focus on their primary role as the owner’s attorney, consultant, part-time CFO, CPA, financial advisor, risk / insurance advisors, etc . . .   In that case we invite you to review Pinnacle’s new website for a Pinnacle Member / Certified Business Exit Consultant®  that is local to you (we have Members in 34 U.S. States and Ontario, Canada today) to discuss partnering with those individuals and gaining access to the training, tools, support and international network that those Members utilize in their businesses.  To find a Pinnacle Member close to you see www.pinnacleequitysolutions.com.

 

Why Work with Pinnacle

Your business owner’s needs are going to continue to grow more complex and you will need to work with experienced advisors to help them.  Pinnacle boasts seven (7) years of delivering our proven, 6-step exit planning process to owners.  Our Members all have access to the tools that we create to deliver these solutions.  And, simply put, there are very few organizations offering this support and, we believe, none as comprehensive and dynamic as Pinnacle. 

Don’t just take our word for it . . . either register for our webinar to learn more or reach out to a Pinnacle Member near you to learn about how you can get more involved in this exit planning marketplace to participate in delivering comprehensive, customized solutions to your business owner prospects and clients.  

 

Concluding Thoughts

I’m pleased to share today’s thoughts and I hope that they are helpful in having you determine how, why, and where you will help your owners gain clarity around their business exit.  It is our hope here at Pinnacle that our message reaches more and more advisors so that the millions of business owners who need this advice will learn that solutions are available and that a proven process is accessible to assist them with this unique and complex need.

   
Wishing you all the best for your advisory business and the success that you seek in 2014 and beyond.


 Warm Regards,

John Leonetti, Esq., CFP, CM&AA
Certified Business Exit Consultant
®
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