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Diana Palotas: Thanks for joining us on the CEO Hour. I’m Diana Palotas. Bruce Peters is off today, and each week, this is where high performers learn together. Now, if you’re a business owner over the age of 50, the author of the book, "Finding Your New Owner: For Your Business, For Your Life."
You may not believe it now, but you will leave your business someday. He says your choice is simple. Plan for it on your own terms or have others plan it for you. By using the transition thinking that we will learn in this book plus the help of a dream team of advisors that you will assemble, Jack Beauregard says you can envision, plan, and implement the successful transition to a new dynamic life full of meaning and purpose. That’s what you need to hear because this is not an easy decision. Author, Jack Beauregard, says his book shows you how to do this.
Jack, thanks so much for being with us!
Jack Beauregard: Thank you so much for having me.
Diana Palotas: First of all, have you made that successful transition?
Jack Beauregard: Yes. I have actually been there and done that. A number of years ago, I had to leave my business. I had a national firm. It was like 42 states and 120 salesmen and I had to leave it because of a medical issue with my wife, and so I know what it is to leave a business, leave your baby, and start all over again.
Diana Palotas: So you had, like you said, your very successful multimillion dollar business. Did you grieve like you were leaving your baby?
Jack Beauregard: Oh, it was. There was total emotional attachment to it. You conceived it. You also gave birth to it and grew it. This is sweat and tears through the years. The thing was when I left, it was a total change. There was definitely emotional attachment and it was really a fear of the unknown. What is going on and what is next?
Diana Palotas: How did you gain control and decide what was next?
Jack Beauregard: What it was is basically I had to look internally. There was nothing external. It was nothing with my to-do list that was going to help me with this one . So really, I had to change my thinking. Thinking creates reality. I had to go change my thinking and my attitude and basically create a plan for what the heck do I really want to do and what was really meaningful. What was meaningful previously was growing the business. But once that was gone, now the most important thing ar this the stage of your life. I think that’s what most want. Business owners, 50 plus, they have to look 'Where am I going to find new meaning and purpose in the next chapter of my life?’
Diana Palotas: You say that this whole process, you kind of say your book is where to start. We’ve had Peter Christman on before who has been on our show, and he has recommended using your book as the first step in the process of deciding what’s next for you and your business. We used to joke in the place I used to work that we’re all going to die in our desks. You know you just thought you’re going to be there forever and the day would come and that would be it, but if you’re planning on your business to be your livelihood to bring your support after you leave, you’ve got to make some plans, don’t you?
Jack Beauregard: That’s right. You know, it’s a whole different concept. Us baby boomers, right, wrong or indifferent, we’re changing this whole concept of what it means to retire.
Diana Palotas: We’re living longer.
Jack Beauregard: We’re living longer. We are the first generation in the history of mankind that has been given the gift of longevity. I mean most people were dying traditionally at 67. Now, we’re living into our 60s, to our 70s, 80s, and into the 90s. We got another third of life. It’s not tradition retirement - going down playing golf or shuffle board seven days a week. What we’re talking about is transforming that whole concept of the golden years into what we call the platinum years. It’s the best 10, 20, and 30 years of this longevity. We’re living a whole new dynamic life. We work at times, go do leisure things, come back to work, travel, basically living up to your personal potential. Really moving from a life of success to a life of enjoyment.
Diana Palotas: Being an entrepreneur is what makes the country run. They make most of the countries run. I mean thank heavens we have folks who want to do business, who want to start businesses, and give their life to businesses. But you really got to think about what else is important in your life and kind of visualize what you want to do next.
Jack Beauregard: Exactly and the thing is is if the best thing that the owners can do, as you mentioned, is die at their desk, what’s going to happen. Well, the first thing is really, they are very lucky if they can get to their desk as they age. I mean one step I’ve seen is owners who got a medical condition and never could get to their desk. But on a larger scheme is that when the owner dies, I thought that’s the worst thing they could do is die at the desk, the business is going to die. The wealth of the family is going to get a major hit. All the employees are going to be let go and small business are the largest employers in the country. It’s that ten trillion dollars worth of wealth. It’s that ten trillion dollars worth of wealth. It’s the largest wealth transfer in the history of mankind can be lost. So we basically can devastate economic future of this country for our children and grandchildren.
Diana Palotas: That’s because so many baby boomers own businesses and if they’re not transferred and they don’t keep going, we’re going to see real problem.
Jack Beauregard: Exactly. And the other thing is from the what’s in it with me is that the owner is going to be over eight million businesses up for sale in the near future. There’s a whole thing of supply and demand. Investment bankers basically you see in this year 2014 is becoming more sellers than there are buyers.
Diana Palotas: Wow, yeah. We know what that’s like in the housing market. Think about what happens if you have a business, that you’re relying on for your platinum years.
Jack Beauregard: There's usually 80% of the owner’s net wealth that is tied into the company.
Diana Palotas: So you knew that you had to make this change. When did you write the book? When did you realize that this was going to be your next step?
Jack Beauregard: Really what it was is I got into the M&A field. I was doing mergers acquisitions and I saw so many owners really sabotaging themselves. Without the people for the cultural integrations. When it came down to, I heard so many owners they all crossed the country. They were working. 'Jack, I built this company up, because I worked potentially 30 years. I’m selling it. I have to know what I do when I walk off that door.’ Basically, in most owners I met, they know how to start a business as an entrepreneur. They know how to grow a business. They don’t know how to leave a business. It’s a whole different mindset. You got to think differently. Where we’re coming from is that we only do the head and the heart issues. We’re the front end of the deal.
Diana Palotas: That’s the head and the heart issue.
Jack Beauregard: Basically, it’s helping them deal with wrapping their whole mind around the idea of leaving, because really it comes down to the heart issues and the heart issues really come down to two major ones. What is the next essential question? I’m the business owner. Who am I when I no longer run a business?
Diana Palotas: Right.
Jack Beauregard: And a lot can’t even answer it. They don’t want it moved, because they don’t want to fall into a black hole and they don’t want to get into a void. The other one is the emotions and the fears. I found over the years that there are about 40 fears that can be triggered when owners think about leaving the company - transitional related fears. We have a self-assessment survey online. Here’s the fears and here’s how you could transform them. Going back to the M&A field, this is what I saw so often called seller’s remorse. Halfway or three-quarters into the transaction, everything was going smoothly. The owner is going to meet this financial objectives. What happens is the owner saying everything correctly on top of the table but with those unresolved fears and basically thinking when I walk out that door, I have no idea what I’m going to do. They’ll sabotage the transaction for no business reasons. So many M&A firms got burnt by this. Either they get a retainer down before they sell the company. What they are doing is putting major penalties on this seller's remorse.
Diana Palotas: Like you said, you have to deal with the heart and head. It’s the heart that is the toughest part, isn’t it?
Jack Beauregard: Yes.
Diana Palotas: How do you approach that Jack?
Jack Beauregard: In very business like and methodical way. It’s taking a step by step approach to dealing with these heart issues. It’s strategic thinking but not strategic thinking before the future of a company. This is strategic thinking for the owners life and the future of the business.
Diana Palotas: So we have to take a break. If you say that you have to start thinking like the CEO of your life.
Jack Beauregard: Exactly.
Diana Palotas: That is a great way we all should think about from the beginning of our lives. Thanks for joining us on the CEO hour. I’m not Bruce Peters because he is off today. I’m Diana Palotas and he’ll be back next week, and each week, this is where high performers learn together. Our guest this hour is Jack Beauregard. He is the author of and I love this thing, Finding Your New Owner: For Your Business, For Your Life. A very successful businessmann who had to make that transition. He says it is very hard for one to exit their businesses. They struggle to let go. Let’s talk a little bit about that, Jack, because the numbers you have given are staggering. It’s a ten trillion dollar transfer of wealth, the biggest in history because 8 million businesses owned by baby boomers are going to be up for sale over the next few years. Right now, there are more sellers than buyers.
How can we be on the other end of this? How do you start thinking like the CEO of your own life and taking control of selling your business and moving on?
Jack Beauregard: That’s a good question. I’m just thinking of it. The name of your program, the CEO Hour. This is what were’ talking about. Most owners, I know myself previously basically the role as a COO or chief operating office going into business, trying to get meshed into the day to day operations, solving a problem. It’s hard to go to networking events because usually something comes up. What happens is the owner and the business become one and the same. This keeps on going on a daily basis. What needs to be done is a new role has to be assumed by the owner. That is a CEO. The role of a CEO is to look out strategically 5 years out, 3 to 5 years. Where is this company going to be 3 to 5 years? What it comes down to is that that’s exactly what the owner need to do also. 'Okay. Where does this company going to be 3 to 5 years from now?’ Yet I also say a caveat to this because in the exit planning industry, in the accounting industry, when a CPA or business broker or somebody asks, 'What are you going to do with the business?’ They say, 'I will deal with that five years from now.’ That means basically they don’t want to deal with the subject. I’m talking about not just postponing something for five years because that’s procrastination. They basically say, 'Okay. This is what I really want to do and here’s the strategic plan on how I’m going to accomplish this.’ So what it does in this three to five years, the value of the business can increase and the owner can get prepared emotionally, psychologically, and intellectually for the transition itself, because there are two transitions going on - the business and the person.
Diana Palotas: It’s getting the business transition and the finances transition. You have to make sure that the company is doing well.
Jack Beauregard: Exactly. Because the more the company is doing well, the more the liquidity event will be realized.
Diana Palotas: So you wrote this book. Was it difficult for you to do that?
Jack Beauregard: No, because that’s what I can deal with. Again, the beauty of it is in this industry with the transactional people. The transactional, we’re talking about the accounting industry people, the business valuation, the exit planning, they do the transaction. Then, you have the other group, the wallet people or financial people. They help the owner with the event once they get the money. The thing was is that major problem of why owners are not dealing with it because it’s a vested interest if 80% of net worth is in the company and they need that money for the future. Why aren’t they doing something about it? It comes down to it. It’s because of the emotional and psychological barriers that are holding them back.
Diana Palotas: You’re part of this whole Successful Transition Planning Institute. This is what your livelihood is now. Tell us a little bit about what that does.
Jack Beauregard: Basically, what we do is we train advisors nationally and internationally. They have their professional skill set but they want to be able to help the owners and they are also concerned about the owners' relationship with the spouses. It’s because really that the merger going on, you got the CEO of the company, but you got the CEO of the house also and they need to create a common sheet of music at this age and stage of life. In fact, it’s interesting the baby boomers, 50 plus, is the demographic who is experiencing the highest rate of divorce now with about 10% of all divorce in 1990 were baby boomers of say age 50 plus, now it’s over 25% and increasing.
Diana Palotas: You say that’s why.
Jack Beauregard: Basically, I’m talking about from the owner’s community than our planning. If we got the gift of longevity, as an upside and downside, we get the gift of life but also we get another third of life.
Diana Palotas: Don’t you think that’s a problem with us as humans? We don’t plan.
Jack Beauregard: Exactly. We don’t plan. Yet you need to plan to create a business plan. It was interesting. I recently talked to a CEO of about five companies. He’s actually the head of a national association, a manufacturer’s association now, and his daughter just graduated from Wharton down in Philadelphia which is a prestigious school.
Diana Palotas: University of Pennsylvania.
Jack Beauregard: Right. He goes, 'My daughter just graduated.’ I ask her, 'What was the one takeaway lesson that you got from this incredible education?’ She said to him, 'Dad, you’ve got to have an exit plan in mind when you start a business.’
Diana Palotas: And?
Jack Beauregard: And that’s when she learned. That was a basic takeaway from her education in Wharton which is like, 'Okay, it sounds so simple, but so many of the owners are not doing it.’ Every day, we get older. It’s a fact. As the popular saying in a bumper sticker, 'Things happen.’ So basically, it’s much better to have this great deal of transition. Get this all prepared because you’re going to leave vertically or horizontally out of a business. That’s a given. The owner is going to leave. It’s going to be on their terms or it’s going to be a disaster both financially and it can very often be a disaster in the personal life and maybe who the heck wants to have a bad marriage or divorce or married living separately if you’re in your 60’s and 70’s.
Diana Palotas: It used to be that you were alone because you lost your spouse to death and now it’s for different reasons.
Jack Beauregard: Exactly. Again, you’ve got another third of life. It’s like 'Okay, where are we at this stage?’ That’s what we hope and do is to create what it’s going to want to do in all ten aspects of their lives, because so many of their friends are basically vendors. It’s business related. Once they leave, where are they going to create new friends? What are all the options? What’s the upside and downside to it? Do scenario planning. Plan of how you’re going to implement and do that and all ten aspects of one’s life. Because you get it intellectually which. We talk about solving the problem du'jour. Well running a business is intellectually stimulating. Once you leave, where are you going to keep your mind. So all aspects in their lives. What you’re going to have is a fulfilled meaningful, dynamic exciting new life. Not sitting in a rocking chair and wasting away anymore. Surely, if you waste away you don’t have to plan. You sit in a rocking chair, wasting away anymore. Surely, if you waste away, you don’t have to plan. You sit in a rocking chair. That’s it. So when you don’t want to do that, you need to be proactive and actually do some strategic thinking. What do I really want to do? What’s meaningful to me at this stage of my life?
Diana Palotas: Really you should be doing that, every year of your life, every so many months. We don’t reflect enough, do we?
Jack Beauregard: No, we don’t. That’s one key characteristic I had and I see it with so many owners. They are so good in regard to doing extra mediums, goals and objectives, but they really have very poor introspective skill.
Diana Palotas: So Jack, you’ve really like become a - what would you call yourself? A soothsayer? A psychologist? A mentor? A voice of reason?
Jack Beauregard: Basically, all I am is a facilitator. I’m not in the guru business. The answers are inside the owners. The answers are inside of them. That’s beauty of what they love to do with us. They take the time to slow down, look inside, and figure out, 'Who am I? And what do I really want to do the rest of my life?’
Diana Palotas: How do you deal with that, Jack? Business owners are audiences that we are filled with these small and mid-sized businesses. They’re just trying to get through the day of their business. They can’t even think about and make an envision plan for their business for five years down the road.
Jack Beauregard: First thing is, it doesn’t have to be done continuously because I know in we are the credit carf generation, we want everything yesterday. The thing is, it’s a process. It’s a transition process. Baby steps first. Basically find, 'Where am I emotionally? Am I stuck on this? Am I open to this whole idea? What are the fears I have? What’s holding me back? Because it’s sure as heck is not going to be to their financial interest. There's a tidalwave of other owners out there in their industry selling their companies. Being ahead of the wave is the best way to be. So basically, it’s just that small, that small. Get an overview. That’s what the book does. It’s basically giving an overview of what’s involved. So often, the owners are stuck because they don’t even know the questions to ask.
Diana Palotas: Right. That’s why you wrote the book and that’s why you’re reaching out. Do you travel a lot? Are you on the road with this message?
Jack Beauregard: Yes. Next month, I’m going to be gone from February 11 to 28th doing a training programdown in Australia. This is a growing thing. We’re not just doing this from a business. We’re doing a personal thing. Basically, it’s helping the owners which are people. We’re at the top of Maslow’s hierarchical needs because really when we sell a business, they’ve got all the basic survival stuff. They have a home, it can be large and small, but they’re not going to be homeless. That’s for sure. So basically, at this stage of life, it’s okay. How can I find a new sense of relevancy? How can I internally find a new sense of who I am that is meaningful? So other words, I’m relevant to myself. So there are really a lot of self-esteem involved here.
Diana Palotas: Oh yeah, which we get a lot of as well. I’m glad you are expecting more from us, Jack. I like that idea and I think this is something that has to start way before you’re deciding to sell your business. These are future things you have to think about as a young person. Thanks for joining us on the CEO Hour. I am Diane Palotas! Bruce Peters is off today. He will be back next week and each week this is where high performers learn together. Our guest, we’re wrapping up with him, is Jack Beauregard. He is the author of " Finding a new owner for your business and your life", and all because of his transition from business owner to the next phase in the platinum years as he likes to call them. We are living longer and we need to make plans for those additional years. Retirement is not what it used to be. Jack, thanks so much! Jack, before the break, we are talking about how you were getting this message out about how folks need to start thinking about what’s next and planning your exit and planning for really what could be another 30 years of your life.
Jack Beauregard: Basically doing a lot of speaking and doing a lot with the trade association and doing workshops. There are seven options what an owner can possibly do with their company. They can do an internal transfer, external tansfer, sell it, he can do an ESOP. It doesn’t matter to us. Basically, it’s just helping that owner get personally ready to do it and then create a whole speculum of options and look at the upside and downside of each one. So when they leave, they only have these whole thing about it. What if, what if, what if, what if. Did I leave money on the table? They know they made robust decisions, and then they go may go to the kinds of people who can actually help them make what they want to do a reality.
Diana Palotas: You say you help with the hearts and the head. I know you have advisors that work with your company which is Successful Transition Planning Institute. But really, you should gather some folks on your life that’s part of this decision as well. I mean you have to involve your family and your partners in business, correct?
Jack Beauregard: Yes. When work with owners. The wife is involved with this. They came to what we call they train a common sheet of music with each other. They have the shared nuclear vision, a shared objective, shared values in a shared life plan. There totally is sequence. And also with family members. If they leave the business clean, they leave with peace of mind knowing that they had made robust decision making in regard to the future of the business and they have a plan for their life. They can’t wait to leave. They say, 'Let me out of here.’
Diana Palotas: I would still have worth and still have meaning without my business.
Jack Beauregard: Yes, yes, yes.
Diana Palotas: I mean when you’re whole life is based on that, it is very interesting. So what’s next for you? What’s next for the company? I mean you’re going to have to leave this company someday, right?
Jack Beauregard: I already have. I’m walking the talk. I walk in the talk. There’s my partner, Paul Cronin. He’s going to be running the business, and I become like as they call me Colonel Sanders of Kentucky Fried Chicken.
Diana Palotas: You have the secret recipe.
Jack Beauregard: Exactly. That’s right. I'll be flying around talking.
Diana Palotas: But you’ve already made those plans. Some folks you should start thinking about what’s next the first thing you walk into the job.
Jack Beauregard: Yeah, exactly. Well, I remember years ago when we were starting a business. The first the business counselor said to me was 'What’s your exit plan?’ Private equity people, what they wanted to see is, 'What’s your exit plan?’ Covey with the seven habits is basically having the end in mind. What we’re saying is it’s not exit planning. Because exit means you’re leaving something. Transition planning means you’re going to something.
Diana Palotas: That really has a lot to do with our psyche. It even does a whole lot of the word you choose. It got to make the big difference. So it’s not your exit, it’s your transition, because there is so much of life to be lived.
Jack Beauregard: The owners already have, they’ve got some 10 and 15 sometimes 20 life transitions already. They have been successful in doing it.
Diana Palotas: It’s so funny, because entrepreneurs they’re all about change and doing different things. Just go to the next one.
Jack Beauregard: Exactly. Work is a part of the ten aspects of your life.
Diana Palotas: So as our takeaway today for folks out there listening. You have a business. Know when it’s time to start making the transition because like you said there are many, many businesses that baby boomers own that are going to need to go to this transition. What’s the first step?
Jack Beauregard: First step is to really start being afraid. Face reality. If you’re over 50, time is running down. Start taking responsibility and say, 'Okay, if I get this done, how can I use this to the next.’ When I do make transition out of life, I can look back at this period of time, and say, 'I did it right.’
Diana Palotas: And thinking about the longer you wait, the tougher it may be to sell your company and sell it for what it’s worth.
Jack Beauregard: Exactly, exactly. Financially, it may make total sense. Also medically, do it while you’re healthy.
Diana Palotas: Right. Get all these perks, 55 and over, but if you can’t get around, you don’t get to enjoy them.
Jack Beauregard: Exactly. The other one is basically running a business is rewarding, but a lot of times this stuff beneath us, we would really want to do but we haven’t had time to do it. Let that passion come up. Find out what your passion is and pursue it.
Diana Palotas: Anything else that you’d like our listeners know?
Jack Beauregard: The best thing you can do is take a self-assessment online at the Successful Transition Planning Institute. It’s inexpensive. Basically, what it is is a 15-minute survey to come out emotionally prepared you are. What are your motivations and objectives? Do you have a life that you’re looking forward to go into? It’s basically getting the data that most people owners have never looked at because that’s internal data. Then, here’s a 30-page workbook so they can do personal due diligence on themselves in the privacy. They don’t have to raise their hand to transactional people, saying, 'I’m thinking of leaving.’ Let the competitors know.
Diana Palotas: Right on your website. Is it a free survey?
Jack Beauregard: No, it’s not survey. It’s inexpensive $97, but you go in it. There’s download. There are testimonials.
Diana Palotas: So, www.successfultransitionplannning.com.
Jack Beauregard: Correct.
Diana Palotas: That is a great way to go. Sometimes, you just have to ask the question to get the answers.
Jack Beauregard: Well, put.
Diana Palotas: Sometimes, you just need someone to tell you the answers and hope it will be yourself doing that.
Jack Beauregard, nominated 2012 small business book award, voted as one of the top management books in 2012, Finding Your New Owner, For Your Business, For Your Life. Thanks for getting us to think about this important issue, Jack.
Jack Beauregard: Thank you so much. Thank you. I appreciate it.
Diana Palotas: And I’m so glad you’re enjoying your transition.
Jack Beauregard: Thank you. I hope you do too.
Diana Palotas: I will. Yeah, we’ll talk someday. Thank you so much.
Thank you very much for being with us. We really appreciate you listening to the CEO Hour every Friday here from 11 to 1 Eastern Time on WCEOhq business radio where high performers learn together. Have a great week everyone.