Scott Snider With Exit Planning Institute

Intro: [00:00:02] Broadcasting live from the business radio studios in Atlanta, Georgia. It’s time for Association Leadership Radio. Now, here’s your host.

Lee Kantor: [00:00:20] Lee Kantor here another episode of Association Leadership Radio and this is going to be a good one. Today on the show, we have Scott Snider with the who’s the President of the Exit Planning Institute. Welcome, Scott.

Scott Snider: [00:00:34] Hey, Lee. Thanks for having me.

Lee Kantor: [00:00:36] I’m so excited to learn what you’re up to. Tell us a little bit about Exit Planning Institute, how you servin’ folks.

Scott Snider: [00:00:42] Yeah, sure. So the Exit Planning Institute primarily serves professional advisors. So more specifically, that likely is a financial advisor, a accountant or a consultant to business owners. And so what we’re trying to do at EPRI is surround the the lower middle market or small business owner with the right holistic minded team to help them grow value in their business and align their business personal and financial goals. So EPI serves and educates the professional advisor that then goes out and surrounds the business owner with a high quality team.

Lee Kantor: [00:01:17] Now, when it comes to exit planning for folks that are the ilk that you describe, you know, these kind of folks that have spent their career building a practice and growing it, is there some kind of maybe a misconception of the value of it if they just kind of think like, oh, it’s time to retire and then I’m going to call it and I’ll just, you know, hey, hey, my practice up for sale. And then there’s kind of smack in the face of you think it’s worth what, Like if you don’t plan this, right? Aren’t you in for kind of a really big surprise?

Scott Snider: [00:01:51] You are really hit. You hit the nail on the head for sure. We talk about it at API as very successful companies versus very significant ones. And if there’s a business owner listening to the show right now, you probably feel I think most business owners feel very prideful and very proud of what they’ve done. They feel very successful. They likely are successful, right? They have great people. They have great customers. They’re likely kind of the heartbeat of their culture, if you will. They might have a strong balance sheet, have a good pal, might live a nice lifestyle. And then to your point, when they go to sell this company a decade from now, or if you’re a baby boomer business owner, right, that’s maybe 65 years old, you started your business back when you were 30 out of the shed in your backyard or your garage or your bedroom. You’ve owned this thing for 35 years and you go to sell this thing. And to your point, I love how you use it. You’re kind of smacked across the face because in fact, the buyer on the other end now has called your baby ugly. They’re saying, look, it’s either not what you think it’s worth or unfortunately maybe not worth anything at all. And that’s a I think, a big issue. It’s a big issue across the United States and a big issue across the globe, as many business owners, regardless of age, primarily focus in on what they’re most passionate about, and that’s growing their business. What they don’t realize is that just because you have a successful company year over year doesn’t necessarily mean that you have something of significance or something that’s worth that’s that’s something that’s valuable and transferable. So you’re you’re spot on. Many owners forget to concentrate on the end and only concentrate in the moment.

Lee Kantor: [00:03:30] Now, this came very clear to me. I’ll never forget it. My background is in marketing, so I have I’m kind of paying attention to marketing when it comes to businesses. So I had a dentist that I went to regularly love the dentist, and then all of a sudden, you know, he got older, just like you described probably in his mid sixties, and then he sold the practice to somebody else. And I went to that person one time and then I’m like, Why am I going to this dentist is a brand new dentist. I can go to any dentist. You know, I’ve always gone to this other guy because I’ve been there going to him for 20 years. Why am I going to this new person? Why don’t I? And I had moved since then and I was trying driving to see my old dentist and now I’m like, Why am I driving all this way? There has to be a dentist near me. I didn’t have any connection with this new person, so they bought a business and the client who was me that had no kind of loyalty, they had no, I wasn’t invested in this new person. I always liked my old person. So I became clear to me like this person bought a business that really is a brand new business. Like unless there’s a really elegant kind of way to hand this off. And maybe they would have had them kind of do some of my work and over the over years to build some trust. So if you don’t plan for this and you just think you’re going to just find somebody and say, Hey, here’s a business, buy this. I got 100 clients. You don’t have this new person doesn’t have 100 clients.

Scott Snider: [00:05:02] Right? So I think you’re I think you’re spot on. These are actually some of these, like service based businesses, physician’s office, dentists, veterinarian practices. There have a lot of goodwill and a lot of that goodwill is usually with their people. So to your point. Couple of things. One from the the original dentist, right? The guy that you like to go see, what he was able to sell his practice. Right. So, so good for him. I think that that’s great. However, you know, if you’re again, in that realm of things, if you’re in that service base kind of businesses, when you’re approaching your kind of ideal exit or we have to start thinking about to ensure a good exit and a high multiple. Right. Maybe your dentist could have actually sold his business for much more, but they built a business that sounds like a really nice lifestyle company built around one single dentist. To your point, integrating other other people, having the right customer experience overall, something maybe unique to that that that dentist that that that’s practice culture, people, clients, systems processes that’s really what that person was buying was that if you just kind of want I always kind of think about it in these smaller companies that are service based. Well, you know, to your point, you’re kind of married to the dentist. So when that dentist leaves, you’re likely going you’re likely going somewhere else. And so I think that if I was waiting to buy that business right, I would just wait for that person to just retire. Why would I buy his book of business when likely they’re tied to that dentist that you weren’t tied to the brand? That was the dentistry office, right? You were tied to the dentist, the individual. So I think there’s and you see a lot of that. There’s obviously a huge amount of businesses in our small and our small business market that tend to have a owner operator type feel and the business is very dependent on them.

Lee Kantor: [00:06:51] So how do you help your members kind of rethink the plan? Because, you know, for a lot of folks that start a business, you know, maybe they were disgruntled and they go, I’m going to do this myself and I’m going to, you know, I hate my boss, so I’m going to start my own practice or my own firm. And then how do you kind of help them prevent what we were discussing, where that the client is buying a brand? They’re not buying an individual because when you’re relying on that individual that’s fragile and it’s probably not worth anywhere near as much as if it was a if they were falling in love with a brand.

Scott Snider: [00:07:28] Yeah. No, I think you’re absolutely right. So we would do what? And so we combat that by teaching what we call the value acceleration methodology. It’s a process that integrates three elements business, personal and financial. These three elements that I think every business owner has and gives them a framework that brings these longer term goals and strategies down into one year strategies in the 90 day sprints. But basically what you’re saying is, and what we would call three challenges that every owner face, right? So number one, the first challenge is, is that they actually if you looked at some of our state of owner readiness research, we just released one in the understanding business owners in the state of Colorado every time time and again, I don’t care what state we’re in. The first question we ask is, is having an exit and transition strategy important to your your future and the future of your business? 95% agreed in some way, shape or form, 61% strongly agreed with that statement. But what we’ve been talking about over the last few minutes is their kind of their goals and objectives and way of thinking don’t match that statement because they’re actually not doing anything about it, which is challenge one. They actually believe it’s important. Yes. They’re not doing anything about it because they don’t think it’s urgent. Well, I’m not ready to sell now. I’ll do it when the time comes to or maybe maybe 18 months, 24 months before I go to sell my company. It’s kind of like readying a house for sale.

Scott Snider: [00:08:53] Right. Let’s paint the doors. Let’s get some some fresh paint on the inside. Maybe re landscape a little bit. Let’s get this thing position for sale. And that’s just not how it works. Challenge two that would definitely hit your your dentist example is whether you’re a huge business with multiple employees generating millions of dollars of revenue or a smaller owner operator type business with only a few people. We are all subject to what we call these five D’s, these things that involuntarily force us out of our companies, something like our global pandemic, something like a partner dispute, a death, a disability, something that particularly in these lifestyle owner operator businesses force us out of the a force us out these content these these unbeknownst to us things that that happen. Right. And then last I think many owners are concentrated on generating a nice income not generating value. Right. How many times you walk into an owner’s business and maybe you’re looking at their metrics or their key performance indicators and you’re looking at things like customer retention, lead generation, customer satisfaction, efficiency scores. You don’t see a lot of things that relate to how much more value did I create in my business this month or this quarter or this year? So those three challenges are really combated by the value acceleration methodology, which is what we’re teaching to those certified exit planning advisors that then go out and teach those business owners and align with those business owners to create a company of significance.

Lee Kantor: [00:10:23] So then who are your members? Are they kind of consultants that want to help folks exit in a successful manner, or are they you know, maybe they’re already CPAs or they’re already kind of in a business that touches on some of these elements? Who is a member?

Scott Snider: [00:10:41] Yeah, our members are financial advisors, CPAs, accountants or consultants. So they’re going to come back. They’re going to come with three different specialties, right? So you have the business, so you have the CPA, the attorney, the consultant on that, and then you have the personal and financial side, which is typically their financial advisor. So any and all of those types of advisors, you can think about it as anybody that’s really surrounding the business owner in an advisory capacity is coming to API to get trained and how to be a better advisor, how to be a more holistic minded advisor, and how to think about those three challenges that owners have and how to implement the methodology to combat them.

Lee Kantor: [00:11:20] So when should a business owner start thinking about their exit? Is it one of those things where as soon as you start, you should be kind of picturing at least or planning for the end in mind 100%?

Scott Snider: [00:11:34] I would say that whether you’re 25 years old and just launching your very first business as a new entrepreneur or you’re 65 or 70 years old, trying to more immediately harvest the value from your company and move into the next phase of your life. You should be focusing on exit planning. Now, we always say at RPI that exit planning is present tense, not something that you do in the future. You focus on right now. If you focus on exit planning right now, not only will you have a better business year over year, a more successful company, but you’ll be building a business that for the is is more valuable and transferable for the future that’s aligned to your business, personal and financial goals. Or the short answer is right now we should all be practicing exit planning if we’re owners.

Lee Kantor: [00:12:12] Now, you mentioned kind of a membership that involves kind of wealth advisors and CPAs and folks like that. How much of their time are they spending even discussing this? You know, even if they’re never a member of your association, Are these conversations are even having with their clients or are they kind of, you know, is the CPA like, hey, I’m doing their taxes and, you know, I’ll give them a pal every quarter or whatever. And it’s like that they’re are they’re kind of on their own.

Scott Snider: [00:12:41] Yeah, I would say that if you asked me that question like ten years ago, I would have said that no one’s really talking about it. Right? The owner certainly not talking about it because they’re focused on income generation, not value creation. They’re focused on short term, not long term. And the advisor is, to your point, concentrating on their expert expertise. So if I’m the accountant, I’m concentrating on the financials and the tax position from the if I’m the financial advisor, well, I don’t really care about the business because I’m really talking about helping the owner in their investment portfolio. And if I’m the consultant, well, I don’t really care about what they want to do personally because I’m here to grow the business. And so ten years ago I think many advisors, although very much experts inside of their space, didn’t come with a holistic approach. Nowadays, I think more conversations are being had both by advisor and owner from an owner’s perspective. Last year we saw one of the hottest markets in our country’s history high multiples, a lot of businesses being sold, primarily driven by the baby boomers who are the average owner this year. The average baby boomer business owner this year is 67 years old. And according to an NY study that came out just last year, they said that the average owner starts thinking about exit and transition when they’re 63.

Scott Snider: [00:13:56] So I think that the market is prime time. So more owners are saying, Hey, you know, you’re my most trusted advisor as my CPA. You’ve been around for a while and now I’m thinking about transitioning. How do I get out of this business? How do I sell it? And then the advisors are a lot more educated because the market has come along and to this the more holistic minded market. And if you look down the generational stream, if you will, to people in their forties or early fifties, these Gen Xers, well, their generational characteristics tell us that they’re actually more focused on optimizing their time, they’re more focused on investing and saving money appropriately, and they’re more focused on a balance of life. And if you are appropriately doing exit planning, these things all come to you, right? We’re talking kind of come back to this organizing principle, this balance of business, personal and financial goals. So I think in 2022 and beyond, I think many advisors and owners are having these conversations more frequently. And I think that’s why you see this exit planning space or exit planning profession really as a hot topic within the in the business ownership realm or in the professional advisory space.

Lee Kantor: [00:15:06] Now when you’re talking to a CPA that maybe isn’t doing this right now or is learning about Exit Planning Institute, is this something they’re like, Oh, where have you been all my life? Or is this something where it’s like, Oh great, something else I have to learn or something else I have to do? And I like to just stay in my lane and I’m not I don’t want to start being responsible for an exit and that kind of thing, because I’m just I don’t know, the mindset of a lot of CPAs are just let me do your taxes. You know, I’m not here to help you grow. I’m here to help count your money.

Scott Snider: [00:15:46] Right? That might that might not be their role. So I think that a lot of people, when you think about exit planners, they think that it’s going to be a new service line or they think about this person that’s a consultant, what we would call like a value advisor, this person that actually goes in and runs the methodology. To your point, I agree a lot of the CPAs and a lot of the financial advisors who work on the personal and financial side, they don’t work on the business, so they’re not here to help you position your business for for sale. They’re not here to work on these mitigating risk business improvements. But what they are here to do is align your personal. On financial plan with your business plan. And so though they might not run like the CPA might not come in and say, look, I want to do the exit planning. They might say, look, I want to stay in my lane and I want to work with my expertise, which is giving you good business advice, doing your taxes and mitigating some risk in that realm. I think any advisor, though, this adviser of the future, if you will, that wants to work with business owners, needs to understand what it takes to exit a company, even though they might not do it. So many of our members actually don’t do the work. They come in and become a certified exit planning advisor and maintain a membership with us because they always want to continuously be evolving their thinking and their position with business owners.

Scott Snider: [00:17:02] And so there’s people that are what we call CPAs that are these influencers and educators. They’re here to kind of help the owner down the exit path, though they might introduce somebody on the other side of the coin, which is the value advisor that will come in and run this, run this methodology and actually ready the business for sale, whether that’s an internal or internal or external exit. I think for the most part these days, given the topics hot, most people are like, Oh man, I know. I didn’t know Exit Planning Institute existed. Right? It’s the the running joke in our office. If you just kind of think about exit planning institute and know very little about exit planning, you guys probably think we’re funeral directors or something. But nonetheless. Yeah I think people today are, are certainly saying, okay, my business owners are starting to talk about this transition, this exit, the succession plan. I’m not necessarily equipped to have this conversation. Where can I have it? And so they’re turning to the API that you’re turning, you’re turning to the Exit Planning Institute to get the right credentials, courses, content and community to have these type of conversations and bring the right people in. If it’s not you that’s going to go do that work.

Lee Kantor: [00:18:10] So now in your association, is it kind of a national virtual association? Are there chapters around the country where people meet in person? Sure. How do you kind of work it?

Scott Snider: [00:18:23] Certainly, yeah. So we’re a global organization, though, I think primarily we’re certainly here in the United States. We have about 25,000 advisors in the overall community, and 4000 of those 25,000 have the Certified Exit Planning Advisor credential or designation, primarily here in the United States. But EPRI is technically in about 18 different countries across the world. So obviously since two years ago and our pandemic changed our world, we’ve certainly become more virtual than not. So I would say today the API community and the people that associate to it are virtual and in person. So we have weekly think tanks that allow advisors to get together and have deeper conversations and network that are virtual so you can tune in from anywhere across the world. And then we have our chapter network, which has about 20 to 25 different chapters around the United States, where people come together on a monthly basis to actually to meet and to meet in person and and collaborate and network there. And on a larger scale, we have something that’s called the Exit Planning Summit. It’s the largest exit planning centric event in the United States. So if you’re looking to further your knowledge or get associated with some experts within the space, the summit is a place where we bring together about 1000 people each year to talk exit planning and have different experiences and different innovative ideas along the way. And so we have both virtual and in-person options depending on how deep you want to go.

Lee Kantor: [00:19:56] So what’s your backstory? How did you get involved in this line of work?

Scott Snider: [00:19:59] Yeah, interesting backstory for sure. So I’m an exited owner, so I started my business at the seat in my geometry class when I was 16 years old. I probably should have been paying more attention, but I really wanted to start my business and so I started that and was able to sell it when I was 24 years old. The interesting twist to this story is that my father, Chris, who’s the creator of the value acceleration methodology, which is in Chris’s my dad’s book, Walking to Destiny, we he was a certified exit planning advisor, so he was a part of the first 100 CPAs certified back in 2008. So I knew a little bit about exit planning and I struggled with my exit. Even though my dad was a CPA. Primarily, I struggled on the personal side. I remember coming out selling my first business. I was 24 years old. I had a little change in my pocket, probably more so than my buddies that were all graduating and college and starting their careers with a lot of college debt. And I literally I lost my identity. As the year progressed after selling my business, I fell into this Price Waterhouse statistic that we always hear in our space that says 75% of owners profoundly regret selling their business just a year after selling it. And it’s usually from a personal standpoint, they they lost. My phone wasn’t ringing. People didn’t need me. There was no big challenges for the day. There was no massive interaction with people. So I came into my dad’s practice at the time and again, he’s a he’s a CPA. And what I found was many owners had similar issues and my dad was running a process that then he called buy in, prove, grow, sell the Biggs process.

Scott Snider: [00:21:38] And I said, Dad, I think that we need to really change our model. I think what you’ve learned at CPA back in 2008 and what you’re doing with owners today, you’ve create this very interesting approach and outlook that have combined some new concepts and a process that you can go out and execute to see results. And some of the original exit planning principles that were taught to you and CPA in 2008. So fast forward now a couple of years from there, Dad and I ended up buying the Exit Planning Institute, which was based in Chicago, now based here in Cleveland, Ohio. And we flipped our model. Instead of working with business owners, we worked with professional advisors. And again, as we kind of started our conversation, we felt that though the advisors on the team were highly qualified experts within their role, they weren’t unified under one goal and objectives and they weren’t having cross collaboration and communication around these three critical elements business, personal, financial that allowed a business owner to grow from success to significant. So we bought API, implemented what’s now called the value acceleration methodology, and here we are today. But yeah, so it’s an interesting, it’s always an interesting perspective for me. Sometimes I have a hat on that’s an educator, sometimes I have a hat on that’s advisor and almost always I have the hat on. It’s a business owner as well. So so that’s the interesting back story of API and how we, how we came into this business.

Lee Kantor: [00:23:08] Now when you took it over, was it a when did you start kind of feeling like, Hey, we’re on to something? This is something that really is resonating and people are, you know, getting that aha moment and they really do understand what we’re trying to accomplish here.

Scott Snider: [00:23:29] And so we bought it in 2012 and I would say it was probably about 2017 when we really took good root and really started to, you know, J curve, if you will, on the on the entrepreneurial growth and the growth entrepreneurial growth path. And I would say that because in 2013 we changed up the credentialing program that our members were taught, we implemented the value acceleration methodology as core curriculum, and that took a couple of years to kind of take root. And then in 2016, my dad wrote his book Walking to Destiny, and it launched into the market. So we were able to actually hit more people. At the same time we were launching chapters across the United States. So awareness in these different regional pockets came and then we also had about four years under us of doing regular consistent research on over owners through our state of owner readiness research. So I would say between those three or four kind of critical thrust kind of initiatives, 2017, we started to see really major, I would say a major spike in general, generally in professional advisors wanting to be involved, whether that was attending the annual summit, getting involved in our chapters or taking the full leap and becoming a CPA, that’s really, really took root. And we went from about, I think it was about 500 certified exit planning advisors at the end of seven and 17 to over 4000 certified exit planning advisors as we conclude this year. So yeah, pretty, pretty massive growth.

Lee Kantor: [00:25:07] Just five years to be an overnight success, right?

Scott Snider: [00:25:10] Yeah, that and a lot of sleepless nights now.

Lee Kantor: [00:25:13] Do you have any advice for other folks that are leading associations and maybe emerging associations, like how do you kind of attract those early chapter leads? How do you kind of enter a new market with something that I don’t want to say isn’t fully baked but is still evolving?

Scott Snider: [00:25:33] Yeah, I think that you have to have like champions, like boots on the ground, people that really believe in what you do and that are going to spread the word. And I think that, you know, for me, my dad, Chris, who invented the value acceleration methodology, but the founders of API way back in 2005, Peter Christman and Rich Jakab, when they started these kind of original exit planning concepts in their book called The $10 Trillion Opportunity, these people will really think that those three gentlemen were people that sparked an idea what happened when we started to grow the membership and we had these chapter leaders that are running these regional chapters across the United States. Those are really people that carried the torch and that really championed the appropriate way to grow a company, and that’s through the value acceleration methodology. And I think that if I had to look at other association leaders and. Talk to them. I would say that what that truly boils down to me is being very in tune to your member’s needs and your member feedback. And I could tell you that maybe a lot of us experienced this again in 2020 and April and May when we all kind of had to look at ourselves and say, Hey, maybe we were primarily an in-person organization.

Scott Snider: [00:26:40] Now we have to have this virtual component. It really we dialed it back in 2020 and said, We want to focus this year, obviously pivoting our company. But in order to do that, we wanted to pivot the organization in a way that was very representative to our and very driven by the members themselves and creating opportunities, experiences and creating programing that was member driven, not necessarily top down driven, but bottom up, I guess you could say, really creating a community that wasn’t really about the $10 trillion opportunity, wasn’t necessarily about walking Destiny, wasn’t about Chris or Scott Snyder, but it was truly about the certified exit planning advisor and what they were saying. So really understanding in depth with data backed with data backed information, really understanding your members and what they want, I think allows associations to evolve, whether that be evolve and growing and retaining their membership or evolve by growing through some acquisitions of other like minded associations. But always keeping your your member in mind I think is critical.

Lee Kantor: [00:27:49] Well, what do you need more of? How can we help?

Scott Snider: [00:27:52] Sure. I think that spreading the word around exit planning is better for everybody. I think that it’s truly a economic and a social impact. Right. If you think about business owners in the United States and how much they power, whether that be taxes, charitable intent, employment, all of that good stuff, I think that spreading the word of exit planning, you can do that. So you can do that in two ways. Number one, just go to earn CPA and you can interact with all kinds of different stuff there, whether that’s content, people experiences, we have that all. And I would say go on to LinkedIn and just follow me on LinkedIn. Scott Snyder with an I. Snyder and I try to share different stories, experiences and content. I think a pretty authentic approach. I’d like to thank almost daily. So check that out and begin to spread the word about what it means to really grow a company of significance.

Lee Kantor: [00:28:45] Well, Scott, thank you so much for sharing your story. You’re doing important work and we appreciate you. And then before we wrap up one more time, the website and the best just the website would be great.

Scott Snider: [00:28:57] Sure. Cpa dot com and CPA is certified exit planning advisor. So it’s earn CPA dot com.

Lee Kantor: [00:29:04] All right. Well thank you again. It’s so important for entrepreneurs business owners to have the exit they’ve kind of earned and not leave money on the table. If you do this right, if you plan for it, you’re going to be so much more successful when it comes time to have that good exit.

Scott Snider: [00:29:24] Thanks. Yeah. Totally agree.

Lee Kantor: [00:29:26] All right. This is Lee Kantor will sell next time on Association Leadership Radio.