Professional advisors in the exit planning industry work with business owners in varying levels of exit readiness. Some owners might not be looking to exit now, but are open to a conversation about value growth. Others have waited too long for a proper value conversation and must exit their business immediately without the opportunity for detailed planning.
With an understanding of your client base, how to connect with potential clients, and expert conversational tips, Professional Advisors can successfully grow their portfolio of business owner clients.
Sean Hutchinson, CEPA and Partner, Strategic Development and Partnerships at Ready For Next Advisory Group (RFN), shares his expertise on understanding your potential business owner clients.
Meet Your Clients Where They Are
Business owners fall into three categories, according to RFN. Without understanding the characteristics of each category, professional advisors are not prepared to work with owners. Professional advisors must properly manage owner expectations, facilitate exit planning conversations, and offer accurate insights into their business needs.
The most effective business relationships are formed by providing your clients with resources to suit their specific needs. Do not sell owners things they do not need. Conduct a readiness assessment to determine which of the three categories your owner fits, and base initial conversations around that.
Explorers
Explorers are owners that want to discuss exit options but are not ready to invest in Value Acceleration and transition readiness yet. These owners are not in the mindset to purchase a professional advisors exit planning service. However, they are open to receiving educational content and access to subject matter experts. They show a deep willingness to plan for their future and are curious about what is next, personally and professionally.
Sean Hutchinson shares that explorers are not thinking about their exit as a matter of “if” it will happen, but “when” the transition will take place. Providing owners that fall into the Explorer category with educational resources is a great way to nurture a relationship.
Pivoters
RFN states Pivoters are owners who, “know proper planning is needed to achieve goals and those plans need to be agile enough to accommodate all the influences affecting you and your business.” These owners still have time to plan their exit and understand how Value Acceleration can grow the value in their business prior to transition. An exit is three to five years down the line for these owners. They have a growth mindset and are committed to planning for the success of their business.
Pivoters typically have a few transition professionals on their advisory team and have a general timeline in place for their business exit. As a professional advisor, encourage conversation about life after business planning.
Triggerers
Owners that are looking to exit their business in a short time frame are referred to by RFN as Triggerers. They may be forced into transition as a result of one of the Five Ds impacting their business or personal life. The Five Ds are Divorce, Death, Disability, Disagreement, and Disagreement.
It is common for Triggerers to come to an advisor due to a health concern, exhaustion, an unsolicited inquiry to purchase their business, family issues, or a near-term retirement. While there may not be enough time to conduct a full value acceleration framework, an advisor can still work with the owner to ensure they have a successful exit.
Transformational NOT Transactional Conversations
Imagine if someone came into your office, told you everything you were doing wrong, said they knew how to fix it, and gave you the price it would cost – without ever getting to know your needs. This process feels so transactional and not personal at all. There is a huge difference between transactional and transformational conversations. To be an effective exit planning advisor, you must move off the transactional process and towards transformational advising.
Sean Hutchinson suggests you leave your brochure in your office, especially in the early stages of the conversation. By relying on written brochures with stated processes in early conversations, you are enabling yourself to try and provide easy solutions without actually listening to the owner’s business concerns. By building a strong relationship with the business owner instead of simply selling your services, you gain a deeper understanding of their business and personal goals. This allows you as an advisor, to make more informed decisions and suggestions to build value in their life.
Move Off Solution-Based Selling
This might be hard to hear, but your solution has no inherent value. Sean shares that what you do does not have value to your clients unless they decide you are of value. This idea is directly related to the need for advisors to decrease the number of transactional conversations with owners. Instead of offering a solution for a business owner without any in-depth conversations, Sean suggests advisors conduct “Mutual Exploration.”
Mutual Exploration is the even exchange of ideas and conversations between an owner and advisor. Find out what is important to the owner through these conversations and they will open up to you as the advisor. By moving off the solution and on to the owner advisors will build trust between themselves and the business owner. This will ultimately lead to a more successful working relationship and successful business transition.
To learn more about how to have successful conversations with business owners and improve your advisory practice, register for Practice Launch Lite. This three-part on-demand course allows advisors to construct a thriving and profitable exit planning practice.
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