If there ever was a profession where The Collaboration Effect® made sense it is in exit planning. Instead of individual specialists reaching out to a potential client wanting to exit a business, think about if they worked together and what a better result there would be for the client. This past week it was my pleasure to address the Exit Planning Institute (EPI) Twin Cities Chapter at the invitation of the Chapter President Julie Keyes and to meet the incoming Chapter President Mark Hegstrom. They were very receptive and I appreciated their glowing recommendations. Here are some of the key points. We can all learn from this example.
What is exit planning?
From the Exit Planning Institute web site, the following is offered:
Exit planning combines the plan, concept, effort, and process into a clear, simple strategy to build a business that is transferable through strong human, structural, customer, and social capital. The future of the business owner, his/her family, and the business itself are addressed by exit planning through creating value today.
Exit planners work with clients ideally that are both financially and emotionally ready to exit their business. However, many clients are either not quite there financially or emotionally and need some coaching on how best to proceed. That is where EPI members can help.
What is estate planning by comparison?
Estate planning by comparison takes advantage of the tax code and provides a process to minimize taxes and to address the needs and wants of the client upon their passing. This too takes a specialized team of professionals to help the client. So, who does this type of work? What are some of the differences?
Who assists with exit and estate planning?
Estate planning is complex, but actually less complex than exit planning. In estate planning the typical team consists of:
· Trusted Advisor,
· Financial Planner,
· Certified Licensed Underwriter (CLU) – insurance,
· Certified Public Accountant (CPA),
· Business Valuer
By comparison an exit planning team may involve an even larger contingent of potential specialists.
· Trusted Advisor (often a banker or financial planner), Attorney (business, tax, estate planning),
· Business Broker, Business Valuer,
· Commercial Adviser, Loan Officer,
· Compensation Expert, Consultants (ESOP, family business, marketing, operations, strategic planning, specific industry),
· CPA (audit specialist, tax specialist), Financial Adviser (financial services expert),
· Investment banker, Insurance Professional (P&C and general),
· Pension Plan Specialist, Post-Integration,
· SBA Specialists, Other Specialists, Trust Officer
In either case there is a lot to coordinate and work through with a host of specialists.
The historical way to approach exit or estate planning is for the trusted advisor and the client to meet and discuss interests. Then the trusted advisor and the client meet individually with key players to address plans taking into account the needs of the client. Eventually through a series of interactions a plan is prepared, approved and signed by the client. This is often time consuming, expensive, and something the client appreciates when finished, but not necessarily the mental toil associated with the process.
A collaborative approach
By comparison what would happen if the key players all met with the client and the trusted advisor at one time. All of the parties identified above may play a role, but it is important to only include the key players in this discussion with the client and the client’s trusted advisor. In the collaborative approach the key players meet with the client and trusted advisor, connect with each other, the client, and the trusted advisor, actively listen and then adjourn to develop a plan for the client as a team.
This plan optimizes each of their specialties as they work together.
They learn from each other and develop an even better plan as they consider the nuances of the details from one another’s professional perspective. When a plan is developed, they come back together with the client and the client’s trusted advisor and share the plan. Questions and concerns can be addressed and tweaked if necessary. When finalized the plan can be signed by the client. In this instance the client only had to meet with the specialists at the beginning and the end. Of course, there may be needs for interacting along the way as well. However, the client did not have to interact with all of the specialists multiple times personally saving the client time, emotional toil, and anxiety with the process.
The National Association of Estate Planers and Councils actually offers a 9-module course Model for Collaboration to help their members apply this approach with their clients. I have critiqued the original course and offered some suggestions to consider given The Collaboration Effect®. Whether working with the client, working with peer specialists, or simply trying to collaborate with others The Collaboration Effect® can be applied to overcome conflicts and produce better relationships and produce better results.
This is how to apply The Collaboration Effect®
In order to apply The Collaboration Effect® it is important to be positive, professional and focused on the end from the beginning. When you know who the client is and who your partners are make a point to learn all you can about the client and your peers to try and build a connecting relationship. Really listen to the client and your peers. Determine where they are coming from and why. Summarize what you heard them say better than themselves. Once you have fully listened to discover interests, work for the client and with each other to share your insights and educate judiciously in a way that makes sense to them. This will help you build bridges with each other so that you can negotiate closure with each other and bring the process to a successful conclusion for your client. After all isn’t that what you were trying to do from the beginning?