One of the most overlooked aspects of Exit Planning is the role that emotion plays in a business exit. We’ve discussed how emotion often goes unaddressed and why that can derail an Exit Planning engagement. Now, we’d like to dive a bit deeper and provide some ideas for how Exit Planning Advisors can take overly technical conversations and turn them into conversations that speak to the heart of what business owners want and need. Then, we’ll examine how Exit Planning Advisors can use their technical expertise to act on the information they gather from those conversations.
Why Emotion Matters
Business owners do not care about the technical side of Exit Planning unless it makes them feel something. Advisors can have the best tools, strategies, and methods for helping owners exit their businesses, but none of those things matter unless business owners feel the urge to take advantage of those things. Even expert Exit Planning Advisors can fall into the trap of falling so in love with all of the things their tools let them do that they forget to consider why a business owner might care at all. This can lead to frustration and failure, for both owners and advisors.
Fortunately, there are three specific actions advisors can take to speak to the emotional side of Exit Planning and get business owners to act.
Ask the Right Questions
Each business owner has a different idea of what a successful exit looks like. Some might demand a certain amount of money above and beyond financial independence. Others might require that their businesses transfer to a specific person, even if that means taking less money in the end. The only way for Exit Planning Advisors to know what matters to business owners is to ask the right questions.
Asking the right questions means framing the conversation in terms owners can connect with. Consider the question, “Do you know how much money you need to do what you want after you retire?” While this question speaks to the core of what an advisor can help the business owner do, it does so from the incorrect frame.
First, it implies that owners know what they want to do when they retire, which isn’t always the case. Second, it implies that money is the driving force behind the owner’s Exit Plan, which may also not be the case. (It’s true that financial security is the foundation of a good Exit Plan. But beyond financial security, some owners care more about non-monetary aspects, such as keeping the business within the community.)
Lastly, and most importantly, this question doesn’t have emotional resonance. It’s a simple “yes or no” prompt that doesn’t probe into what matters to that client. It commoditizes the owner’s exit. Very few business owners appreciate having an Exit Planning Advisor view their significant life event as just a balance sheet.
Now consider the question, “What’s your next great adventure after you leave your business?” This question frames the conversation in terms the owner can connect with emotionally. It allows owners to expound on what their thoughts for the future are without judgment. It gives advisors the chance to see what matters to owners and speak directly to those things, instead of presuming what the owner wants and needs. Best of all, it allows advisors to transition the conversation toward their own expertise.
For instance, if an owner says that her next big adventure will be traveling the world, an advisor can probe more deeply into the kinds of traveling she’d like to do. Then, once the owner has that vision in her head, the advisor can introduce ways that he can help her make that vision a reality using his expertise.
Find Advisors Who Know How to Move Conversations Forward
Sometimes, advisors don’t have the desire or skill to probe into what makes business owners tick. This does not mean they cannot be outstanding Exit Planning Advisors. Whether you’re familiar with Exit Planning or not, one thing that you’ll constantly hear BEI say is that Exit Planning is a team effort. No single advisor can solve every Exit Planning problem, and that includes the problem of turning a technical conversation into an emotional one.
Some advisors prefer the logical and technical aspects of Exit Planning. Others relish the relationship-building aspects of Exit Planning and know how to move those conversations forward. Advisors who prefer the technical aspects can supplement their skills by consulting with advisors who are supremely skilled at building relationships with business owners (and vice versa). In doing so, advisors can play to their strengths while they build relationships with advisors who can eventually join their Advisor Teams.
Write Solutions Down and Save Them for Later
One of the biggest challenges advisors face when discussing their clients’ business exits is trying to offer immediate solutions to problems. A business exit is a massive event for business owners. This means that there are many things for owners to consider. For instance, there are countless examples of business owners who initially think they want to sell to a third party, only to realize later that doing so clashes with other goals, such as keeping the business local.
The best way for advisors to avoid this problem is to ask initial questions, write their solutions down, ask follow-up questions, then review the solutions they’ve written down again. Often, advisors find that asking follow-up questions allows them to re-evaluate their initial solutions and increases clarity in what their clients want.
Recently, a BEI Exit Planning Advisor told us about how she managed to turn a technical conversation into an emotional one using this tactic. As she asked her client questions, she wrote down all of her ideas, both good and bad. After her client had answered all of her questions, she shared an idea she had with her client. She told her client, “I originally wrote this idea down, but then you said something else that made me realize that’s not the right path to take.” Her client said that he too thought of that idea and realized it didn’t work, and said that he appreciated that she wasn’t going to suggest something that he knew wouldn’t help him.
By resisting the temptation to offer solutions outright, Exit Planning Advisors can show their clients that they are willing to listen and adjust to what their clients need, which goes a long way in earning their clients’ trust. Additionally, it gives advisors more time to carefully consider the best strategies for their clients. When coupled with Exit Planning software, planning for business owners becomes even easier.
Exit Planning Advisors who can take a technical conversation, turn it into an emotional one, and then use what they’ve learned in conjunction with their expertise to help address their clients’ needs create a significant competitive advantage for themselves. They also give their clients the best chance to exit their businesses on their terms. BEI provides advisors with the conversation starters, networks, and tools they need to do just that.