All of us service clients out there, and all of us have stepped in,
worked with clients and seen the messes that they've brought to us.
And our job as professionals is to clean up that mess and leave them in a much
better position than they came to us in.
And we use those mistakes to educate other folks that we work with,
other businesses that we work with as we move forward. And frankly,
some of those mistakes and what we've seen and helped companies through and
individuals through really have helped us become such better advisors.
So we wanted to take this opportunity this morning to go through 10 of the
biggest mistakes that Jon Fonzi and Harry Roski have seen business
owners make with their financial management. So let's kick this off, Harry,
let me take it to you first for number one out of the 10,
what is the mistake and how can we learn from it?
So I'd say the biggest mistake is when Dave mentioned earlier when people have
sold a business or retired and they want to invest in other businesses,
is having a lack of discipline,
real discipline about why they're investing,
why they're looking at these companies
and doing it in a way that they would've run their business prior.
So sometimes there's this light switch that goes off,
they feel that their deal junkies now,
and so they're going out and they're doing things they wouldn't do.
So what we try to do with them is to say, look, you need to have,
let's take 10% of your liquid assets or whatever the amount is,
but a relatively small percentage and say, if you want to go play,
go play and do these other type of deals, but the other 80 or 90%,
we're not going to do that with.
We're going to make sure that your principal's protected. We want to make sure
we have systems in place.
And the other thing they don't do is to make sure that they demand what the
structure is going to be. That's the big issue.
They'll go along if somebody has an SCORP or something like,
we want to allow our clients to invest in scorp.
We make them go through a reorganization. We made them drop down assets.
So you need to create that. And it's very,
very difficult sometimes to get clients to get that started.
So we have to talk about what's the long-term impact of that. It's huge.
So that's one of the things we find difficult to implement. But once you do,
client comes back to you a couple years later when they're talking to their
friends, they go, well, I'm glad I did that, John.
Yeah, I mean, just pig back off of that. I mean,
the one thing you guys have heard me talk about this hundreds of times is a
lack of an exit strategy.
Nobody plans at the get-go of what that exit strategy is
going to be.
And a lot of that gets to you've created or started your business in the
wrong legal form, whether it be an S corp or an LLC.
Obviously Harry has spoke about QSBS before,
or C corp are the only way that that's otherwise going to give you the
benefit of that.
But especially when people are taking on a partner far too many
times they just say, we love each other right now. We'll work it out.
At the end of the day,
whether it's getting one partner out of the business or selling the
business,
you got to know where you want to end up at. And that's far too many times
people ignore that. The one thing that I would say,
I've never ranked these as the top 10,
but one of the first things that comes to mind is from a business owner from
operating their business is not reinvesting in their business.
A lot of times people say, I'm going to take all that cashflow,
and yes,
they're going to do something with it from a personal perspective or save it
or do investing outside of the business, but at some point,
if you don't reinvest in your core business,
your competitors are going to pass you by.
You're not going to have anything that's as valuable as you have right now.
You could take a look at it and say, yep, I'm making all this money,
I'm pulling all this cash out.
But if you don't reinvest and keep up with the market,
your competitors are going to pass you by and become more
valuable. And whoever that exit plan is,
they're going to see that and think it is not as worthwhile
as what you otherwise think it is.
Piggy being one of the things that we said where Harry had mentioned about
somebody that wants to sell versus willing to sell, I just did evaluation,
it was for a personal divorce, and this guy said,
one of the things I always ask the business owner is,
how much do you think your business is worth?
Or Have you ever been offered to sell your business? And he said, yeah,
but they're always way too low. The offers are always way too low. Well,
I valued the business and he said, yeah,
everybody offers me three to five times ebitda.
He was in the industrial manufacturing space. Well, guess what?
I valued the business and I came at a little between three and a half and
four times ebitda and I told the guy, I hate to tell you this,
but that's what your business is worth.
If you're expecting somebody to come in with a seven or eight times
multiple,
that ain't going to happen unless you've got something special or different.
And one of the things that he didn't do was reinvest in new
technology, new equipment,
state-of-the-art stuff that was going to give him those higher multiples.
So I see people that don't reinvest in their business and then still expect that
they're going to get these high multiples on exit.
David, thank.
You. Had a follow up?
Yeah, I have a quick follow up. So we've covered,
for those of you who are keeping score at home,
mistake number one was investing too much of the proceeds into other businesses
after a sale and not holding some back.
Mistake number two from John was lack of an exit strategy.
And if you're in this room with us,
you know how much we value exit strategy because we beat the hell out of you all
day long about that.
And then number three from John was not
reinvesting in the business,
enhancing your competitive advantage,
kind of building your moat around the castle.
So I have a follow-up question for
that specifically for both of you guys about
reinvesting, about investing in the business.
And this is a question that Nicola and I get all the time because
we're real hawks about making sure that the business owner
is taking profit out of their business. So there was a book
that was written and there's a whole methodology on that called the profit first
methodology. And our contention with business owners,
especially Main Street business owners who have six figure businesses,
but they're not quite breaking a million dollars yet is okay,
so we've all heard that you got to sacrifice to make your business successful,
but if your business isn't funding your lifestyle,
eventually you're going to go broke and you're going to have to take a job.
So you need to be taking money out of your business to make sure that your
business is actually producing value for the shareholder. For you,
the purpose of a business in the first place,
what is the appropriate amount on a percentage basis?
Let's say the owners are taking out enough to sustain their
lifestyle.
What is the appropriate amount to reinvest and kind of break it down for us
into aggressive, moderate, and conservative.
What would you say on a percentage basis,
if the owners are fine and the business is doing a million plus a year,
but it's still a main street business, it's still a small business,
what is the appropriate amount to reinvest to continue to build your competitive
advantage?
Go on.
John.
Oh, throw the hard balls to me, Harry, thanks. No, no. I'll add in.
I would say, Dave,
it's impossible to put a percentage on anything because it's going to depend
on the business, the state of technology and the industry that they operate.
If you assume that the owners are okay, they have enough money,
they don't need to pull anything more,
a lot of it's going to depend on what kind of return on an investment that
you're going to get.
If you can get a higher rate of return of investment by reinvesting in the
business and you're already set from a personal level,
you don't need to pull any more money out of the business,
well then reinvest a hundred percent of it back into the business if you think
you can get a higher rate of return on your personal investments than what the
business is otherwise providing you. There's an issue there that says,
Jesus, this business otherwise going to survive.
Are they reinvesting enough or keeping up to my point?
But then there may be they're better off that says, no,
we're better off taking the money out because the personal needs of the
family are greater than what we could otherwise do for the business.
And it depends a lot on how you measure a return on investment.
It's not always just going to be dollars and cents.
There's always going to be this element of taking care of my family.
I think I've given you that story before about the one gentleman that said
he would obviously sell the business,
he could make a ton of money by selling the business,
but he otherwise chose to keep it because he felt he had
a obligation to his family members to provide them jobs that he
knows they would not otherwise have if he wasn't letting them work in the
business. So that gets to one of my other things, which is nice segue,
I'm going to steal your thunder or your question here is
impulsive spending.
People that don't look or determine what a return on investment is
before they make that investment.
A lot of times people like to chase that shiny new thing that's out there like,
Ooh, this is the coolest new technology out there. I got to buy it,
I got to invest in it.
But they never take a look at what kind of return on investment am I going to
get on that from a valuation perspective,
financial modeling,
we all talk about the capital asset pricing model, cap M,
that's always kind of that rate of return, that hurdle that we all look for.
But there's other, so first off,
people may not look at that when they are investing or reinvesting,
and the other is tying in that personnel element that says,
am I really better off or would I be better off by doing this or
giving my family money rather than reinvesting? So again,
not planning or having that impulsive spending that just says,
I'm going to chase the newest and greatest thing. Like, Ooh, look at that.
I'm going to go for that. No, that one's cool.
I'm going to invest in that without knowing what that plan is.
Or you talked about starting off the session about
your goals of whether or not they're achievable or having some sort of
deadline or being able to measure those that m in smart.
Far too many times people just chase something because it's the latest and
greatest thing, but not knowing whether or not it's a measurable return.
And I would add on to that, John,
it's not only the measurable return is how are you being distracted in your
business and is that really going to be helping you build value in
the business that you've created?
I think those distractions are not going to be like us.
If we said tomorrow we wanted to be experts in
pension plans, how much time and effort would we have to put into that?
And then you're pulling away from the blue ocean about all the other good things
that you're working on,
so you're actually diluting your other business that's delivering all this value
and then all of a sudden, at least in our business, then you're looked upon as,
well, wait a minute here, how can you be an expert in all these areas?
And now you've gone off into the pension area. That's just one example,
but it's the same thing in the business line.
People want to buy your business because you have a certain business line.
If you start adding onto that,
I think it's a distraction that money could have been used other places and
it's just you got to be very strategic on why you're doing it and it has to
be.
I was going to say the cost of investing in something like that.
So if you're going to say, yeah, I want to become a pension expert,
and you look at all the revenues that you could otherwise generate from doing
pension valuations, actuarial work, whatever it is that you want,
but yes, you either got to go out and hire somebody,
but there's a time then that me,
you have as far as hiring, finding that person,
training them. And again, yes, it takes away from what we're doing.
So not to say that we're all about the billable hour,
but every hour that you take away from me of doing what it is that I do,
that's less revenue coming in the door and that's part of the cost of
reinvesting that maybe somebody doesn't realize as part of this analysis that
they're looking at. Absolutely.
Yeah, and I would argue on the flip side, by you investing in something else,
use our parlance and our type of business is we could have hired
that super smart valuation person that came across our desk that we thought was
maybe getting paid a little too much, but we really wanted them on the team.
And then therefore you've strained your resources maybe not to be able to buy
that person, not buy them, I mean get them on board.
The other thing is that I just look at it, Dave,
to answer your initial question is you're right.
You've got to be treated as a shareholder first.
If the company's not returning a dividend every year on your investment,
then you've got to question whether why are you in business?
Because if it's just for the compensation, that gives you a job.
So you should be building up value. On the flip side of that,
you don't want to keep too much money in the company because
when you do go to sell, somebody says say,
why do you need that much working capital?
What's in the business that you need that much working capital?
So there's a delicate balance there.
I think that's important because if their perception is they need more working
capital to buy you,
that means it's be a lower purchase price no matter what you say.
That's be their first impression and I think everyone knows what first
impressions are. They're hard to get rid of.
Yeah, I mean as a business owner,
you are the shareholders and you should operate the business with a
fiduciary obligation to that shareholder, to the investors that says, yes,
your return can come in one or two ways or a combination of both.
One is a current dividend cash payout,
the other is increase in value of the business.
And if you're only viewing one and not considering the other,
you're doing a disservice to your shareholders.
I'm talking about investing top dollar.
I'm going to not pick on Carrie, I'm going to use her as an example,
even though her properties that she sell probably don't have
projects.
But I watch enough HGTV to say that when people are buying a house,
they're always, do I want to buy move-in ready? I don't have to do anything.
If you do that,
you're going to pay top dollar for that. Or am I going to buy something that has
projects that I know I'm going to have to put some dollars in and increase the
value myself? It's similar in a business or the people that you're hiring.
If I'm going to buy that top dollar expert,
it's going to take a while for me to get that return on that investment because
I paid top dollar for it Carrie's properties.
If you follow her on LinkedIn, she's a member in Chicago and provisors with me,
I don't know, Carrie, do you guys, those types of level of buyers,
are they looking for projects or.
It's so interesting that you brought this up and most of the buyers are not
looking for projects at that level. They want it done.
So your exit strategy in your world is very similar to the
residential world.
And that's what I tell my clients is you have to put in if you want the right
exit, and you can't just do it at the very end.
You have to maintain it and grow it and
always be thinking about that exit strategy.
And there's some homeowners or sellers that don't agree with that and they'll
see that on their exit, they won't get the return on it.
And then buyers will not value that property the same. That's actually,
there's a bigger discount on that piece of property if there has to
be work put into it because they take time and energy and they value
their time more than they do the project itself.
It's funny that you guys,
you've hit on this because the perspective that
Nicola and I have used when we're doing a session
at our monthly breakfasts or when we're teaching a topic in our
professional development sessions for the members is typically we
cover things from the perspective of an investor in the
business. So about 25 years ago,
there was a book written called the E Myth.
It was written by an author named Michael Gerber.
And the famous expression that came out of that book was,
you want to work on the business and not in the business.
Well, that thinking is good thinking, but it's not the best thinking.
If you're working in your business, you have a job, right?
If you own a convenience store and you work the seven to three
shift and your brother works the three to 11 shift and your cousin works the
11 to seven shift,
you basically have purchased a job for yourself now that you're
working in the business. If you are working on the business,
you have a staff that works,
the am the second shift and the third shift,
and then you're working on the business constantly figuring out how to
strategically reposition your business and reinvest in your competitive
advantage to make the best convenience store you can possibly have so that you
drive the other convenience stores on the other three corners out of business.
So that's the difference between working on the business and in the business.
There's a third aspect that nobody else talks about that Nicola and
I focus on an exit success lab,
and that's working over the business,
that's treating the business.
It's a separate investment and looking at that business and saying,
how can I take this convenience store on 85th Street and Second
Avenue and parlay it into convenience stores on
every 10 blocks in the city so I can get a second convenience store on 72nd
and second Avenue and a third on 62nd and
second Avenue that's working over the business and viewing the business as
an investor. And that's the aspect that we're talking about right
now that everybody else misses.
Everybody else is out there.
I mean the unwashed masses are working in their business,
the minimally educated Michael Gerber crowd is working on their business and
they're thinking about strategically positioning their business,
but there's no place else that you are going to hear about treating your
business like an investment so that it can become something
more if you want it to.
And that's what these guys are so great at pointing out. Alright, so Nicola,
here's what I've heard so far. Check me on this, right? I'm taking notes here.
I've got number one, investing too much of the proceeds into other businesses.
Number two, lack of an exit strategy. Number three,
not reinvesting in the business. And then number four,
which is a great one that I have three clients right now.
Impulsive spending, right? Ooh, shiny object, shiny object,
squirrel on the fence, invest in the squirrel on the fence. I need new software.
I got a guy I work with gets new software every year, new CRM system every year.
Next biggest thing is going to help 'em be more productive. All right,
gentlemen, what's number five? And then back to Nicola.
Barry, your turn.
Hey, I'm sorry, what was the question again?
Number five, biggest mistake the business owners are making with their finances.
So what I would say is lack of true preparation
is the biggest item.
Not realizing how long it's going to take to get everything up and going,
looking inward to the company and trying to shed expenses that you really
don't need and look at things that really spruce up the car, get it shiny.
I think that is complete lack of planning. People say they don't have time.
It's hard to get the owners to focus in on that's going to cost them real money.
Again,
it kind of goes back to we're a firm belief that every year what you
should be doing is updating your A due diligence file.
Where is all your information? What's going on?
Where are all of our contracts? It helps you also in business to say,
what are my liabilities? What are my obligations? And if you do that,
and then the idea there is if you're that well organized,
then you're going to be focusing in on who are your competitors,
what's going on in the marketplace. It becomes this whole process. So to me,
it's that whole process of getting ready for selling the company.
And that means understanding everything that you have internally.
And it goes back to that first impression.
If you are highly organized and you have all this information when somebody's
talking to you,
I think you're going to get more favorable terms than you would've otherwise.
John, anything else on that point?
Yeah, because my next ones are kind of similar and related
from what I see is a lot of times business owners fail to budget.
They just assume that I'm going to go out, start my business,
and we're just going to, things are all going to work out.
No one goes into a business expecting to go out of business.
We're all expecting to survive and make money from it. But how do you get there?
You got to have a budget. Everybody's got to have a goal to shoot for. Dave,
Nicola, you mentioned it to start us off,
what were our goals for the next six months or the last half of the year?
You got to have something not only for the business, but your employees,
especially the key employees to shoot for.
Because one of the things we talked about reinvesting in the business is
incentivizing your employees. When you talk about the line people,
if they don't know why they're doing something,
I wouldn't say maybe they're not the right people,
but everybody should have an idea of what they do.
How does it contribute to the business? So backing up here,
failing to budget for something, coming up, a forecast,
a projection, a budget, all three of those are different.
So a budget is,
what am I shooting for?
A projection is basically a what if analysis and a
forecast is what do I most expect to happen?
So from my perspective in valuations, I love it when somebody has a forecast,
a budget is good, but if nobody,
this gets to my second part, which is a lack of monitoring in an analysis,
okay, you've got a budget,
but if you never compare yourself to the budget and analyze why did I
miss or why did I exceed my budget,
then you're going through the machinations of just because somebody says,
oh, I'm supposed to do this.
This is part of the planning is I got to have a budget.
But if nobody compares how you're doing to that budget and explaining what
those differences are,
then you're missing the boat completely of why you're doing this.
But John, sorry, go ahead, John.
Don't you also think though that as part of that three-part process,
the budgeting, the forecasting and everything else,
you should be looking to what's the competitive set out there?
Get information from the banks or from people like you in your industry to
say, Hey, look,
why is our cost of goods sold going up 8% when they average the only 3%
or whatever the case may be. Those operating stats like RC,
those tend to be 125 days, but industry standards 32 days.
Absolutely.
That's part of this whole process that says I'll pick on other
valuation people because one of our standards says we have to do economic and
industry research. Our reports have to include that.
And a lot of people just go through the gyrations of grabbing something off the
internet and plugging into the report because they have to do it.
And when you read the report, something doesn't jive.
The economic indicators say things upswing,
the industry is all doing exceptionally well.
Growth potentials are high, but yet when you look at the valuation,
the numbers that they do,
it's doom and gloom without an explanation of why are you
so different than what all of the indicators are. But so yes,
you have to look at those indicators to figure out what a proper budget
forecast projection is otherwise going to be.
Something's got to go into that where you're looking at it, and to your point,
I did evaluation. It was for gift tax planning,
turning it over to the second generation and the business owner where I was
going through it with him, and he is like, it's fine, fine, whatever it is,
the number is what it is. But this is the stuff that I find more interesting.
I did a benchmarking of his company against industry averages,
and he said, it's exactly what you said here. He goes, wow,
we're that much slower collecting our receivables than the industry.
And he asked his son, he goes, did you know that? And he is like, Nope,
never looked at it. And he's like, geez,
that's something we should be focusing on. That's where
the value of the valuation was,
wasn't in what that bottom line dollar amount was.
It was the analysis that went into it that was an eye-opening surprise
for 'em.
Thank you for that. And the last two examples That you've given us,
it really touches on what Dave and I are out here doing with Exit success lab,
which is getting in front of business owners and saying, Hey,
you've got to stop and focus on, for us, it's the exit plan.
How are we going to get there?
And that's at a very high level of what both of you have touched on is we're
saying,
you got to take the time out to do this now because not only is it helping you
build your future and giving you a plan,
but it's also helping you increase your value today,
which you're missing out on.
And that's one of the ways we really get to have those conversations.
And so my follow up to both of you is it's tough to be able to get in front of
these business owners and say,
let's sit down and talk about some of these things. Like what you're saying,
Harry, the lack of the true preparation and planning and John,
the failing to budget and going back and monitoring and analyzing it.
How are you? I mean, just give us your top one or two ways.
You're getting the business owners to have those conversations with you and
focus them to be able to do that.
What we try to do is focus with them on increasing the
value of the company. And it comes up in a lot of different ways.
It's a lot of what John and I mentioned earlier,
but one of the other things that we didn't mention that I think is probably top
part of the list is how are they incentivizing the executive
team to increase the value?
Do they have a stake in the ultimate sale by having stock ownership?
There's ways that you can give people what's called a profits interest if
they're providing services depending on their corporate setup,
how do you get them to step up because then they have a vested interest
in getting more money for the company, but you're creating more value.
So that's the one thing that we see that they just, yeah,
John's doing this and Walt's doing this,
but you got to think about if I get those guys on board and I give them part of
the equity,
my part that I'm still retaining is going to be probably worth a lot more
because now I have a team in place that the buyer's going to want to keep in
place and everyone's made money in the process. So you got to look at that
bigger picture.
I think that's as critical as all the other things we've been talking about.
Absolutely. So I think I've mentioned this again before,
to the sake I'm being repetitive.
Of course you did, John.
Of course I am.
That's why those interviews ended up being 180 minutes. I talk too much.
So two of the key drivers that in the m and a world that people look for
is one is recurring revenue.
Companies with recurring revenue sell at higher multiples than businesses
with non-recurring revenue. Dave, you absolutely champion that.
The other that they look at is turnover in key employees.
How often are those key people turning over in your business?
The longer you have that high level that management team in
place, the better off you're going to be, the higher value you're going to get.
And the way you do it is exactly what Harry said is you have to incentivize
those people in order to work for not only for them
to understand that what's better for them is also going to be better for the
business because what's better for the business or what's good for the business
is also going to be good for me because I'm going to share in a piece of that.
So those, again,
they will look at those as being the two of the critical factors,
recurring revenue and low turnover of key employees.
There's a story out there when Steve Jobs was doing something with
Starbucks coffee and the original owner,
Steve Jobs said, your executive team isn't worth anything,
they should all be fired.
And it was interesting when you go back and look at that story,
I think it was within either 12 or 18 months,
every single person that was on that executive team left the company Starbucks,
which means sometimes you got to have outsiders come in and kind of what are you
doing? And that's where if you're smaller businesses even had an advisory board,
let alone a regular board of directors could be very helpful in assessing who's
on your team and what are they really bringing to the table because that's
obviously going to create the value for your business.
I had this exact conversation,
I think I've had this conversation with you, Pete,
I've had it with a couple of people where we talk about the team that gets
you to 5 million is not the team that'll get you to 10 million or
20 million.
The team that gets you to 20 million is not the team that's going to get you to
a hundred million. Here's the thing,
all of us as business owners,
we have to become that next level founder,
that next level CEO.
And the only way we can go from being a $5 million CEO to being
a $20 million CEO is by surrounding ourselves with
people who are 50 million or a hundred million dollars CEOs or
advisors to $50 million or a hundred million dollars.
So your point about the advisory board I think is
incredibly powerful because you don't realize you're so
close to your team.
You don't realize you've only got a $10 million team and you want to build a
hundred million dollars business. But if you have an advisory board,
and on that advisory board are two CEOs who've had a hundred million dollars
businesses and exited, and three advisors who advise people who have 300,
400, 5 million businesses,
and they look at your CFO and they look at your chief operating officer and they
say to you, listen,
those people are not capable of doing this and they have a laundry list,
that's what you need.
And they're not capable of thinking like this and they demonstrate a completely
new level of thinking that will take your business to the next level.
If you don't have people sharing that with you,
you don't grow to go from being that $5 million CEO to being the
$20 million or a hundred million dollars CEO.
That's the value of having an advisory board.
That's the value of being part of a peer advisory group if you have the right
people in that room. Now,
if you're a $20 million business and you're surrounded by $5 million CEOs,
nobody's pushing your thinking, you're in the wrong room. The expression,
you never want to be the smartest person in the room as a CEO,
being the smartest person in the room is the kiss of death for you.
That's stagnation for you as the business leader.
So you can't be the smartest person in the room.
You have to be the person that's always learning, that's growing,
that's coming away.
The best thing for you is to walk out of a conversation with 15 business
owners with three pages of notes, embarrassed about what you didn't know,
because that means that now you have the capacity to grow your business.
I mean, that level of self-awareness, people ask me all the time,
what do I need to build a hundred million dollars business?
What do I need to build a $300 million business? And that the best answer that I
can give to that question is self-awareness.
You need to be so self-aware that you have the
capacity to learn and grow at 40, at 50,
at 60, at 70.
If you have self-awareness and you realize the areas where you're ignorant,
the areas where you have blind spots and you have the ability to be
intellectually curious and assimilate information,
you've got the capacity to build a big business if you can execute or if you
have a team that can execute. All right, here's what I got.
I think we only got one left. I'm turning it back to you, Nicola. So number one,
investing too much of the proceeds into other businesses. Number two,
lack of an exit strategy. Number three, not reinvesting in the business.
Number four, impulsive spending shiny objects, squirrel on the fence.
Number five, lack of preparation. Plan more,
prepare more. Number six, failure to budget. Number seven,
lack of monitoring and lack of comparing your budget to reality and
lack of benchmarking against other industry standards,
which I thought was a fantastic takeaway. That's number seven. Number eight,
not incentivizing key staff because that is one of
the two key areas that people look for, which leads into number nine,
and that's not focusing on recurring revenue and reducing key
employee turnover. So those are the nine. We got one left,
Nicola.
All right, who wants to take it? Harry, John, give us our last one.
I'll take it. It's called personal budgets and estate planning.
You got to have a personal budget.
How much money are you really pulling out of the company for your lifestyle?
What are you going to have after down the road?
And then how are you going to maintain whatever you want to maintain and do the
things that you want it to do?
And along with that comes your estate planning for you and your
family and to protect the economic interest.
I would add one thing into that section.
We have RIAs here on the call today.
The idea here is you got to go out and interview two or three of them at least
to make sure they're going to be able to fit your goals.
That's all part of this budgeting because you just can't listen to one.
You got to listen to two or three to say, okay,
if I assume a certain mix of investments and things of this nature,
can I do that? You just can't listen to one person.
You need to talk to two or three.
Just make sure that all the information you're getting is well utilized.
Well.
Speak to buy agreements as part of that guys please,
because that should be part of it, right?
Your buy sell agreement has to be in there.
That's all part of your structure. I mean, what do you have in there? I mean,
the biggest thing that we see on the buy sell stuff that people get caught up on
and really don't plan for are disability.
One of the key people get disabled going to, how are you going to take them out?
How are you going to work it?
And then obviously you have to have the right structure for that,
for both financial and tax standpoint. But
you got to look at,
like Sheldon mentioned about the franchise and having the right leases,
you got to have the right buy sell agreement and you got to have someone who is
knowledgeable enough that can say,
these are the 40 different examples that you need to factor in to your
situation. And then that buy sell agreement, John,
I know John's talked about this before,
that needs to be updated every year or two because the companies,
the value changes, people change, whatever the case may be,
it's not the same company.
So if you had a formula and then that formula may not apply because the business
world has changed. So I mean, it's all part of this whole process.
So I think you have 11 or 12 now.
Well, I put buy sell agreements in with estate planning and asset protection.
Kind of stuff. That one in there, look,
personal budget is a great one to end on. This is a big issue.
It's making sure we're corralling,
what are you spending and what do you really need for the rest of your life?
What are you planning for your retirement and for your eventual exit out of
this business. So I think it's great to be able to talk to that issue.
And Harry,
I'm really glad you mentioned working in the other advisors because really
oftentimes most of these folks have multiple advisors,
and you've got to be on the same page with those other advisors and make sure
you're all working together for what's best for that client.
And that's really important. So thank you for highlighting that.