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Building a Practice Around the Construction Niche
© 2017 The ShinerGroup. All rights reserved. 1
Leslie Shiner, Owner of The ShinerGroup, @LeslieShiner
Creating an Exit Strategy for the Solopreneur
10/15/17
#QBConnect | WiFi: QBConnect Password not required
#QBConnect @LeslieShiner
In order to receive CPE credit– Be sure to sign in or scan your badge for this session– You must stay in the session for the duration of the training– This session is eligible for 1 hour of CPE– CPE certificates are emailed directly to you within 4 weeks of the
conference date to the same email address you used to register
CPE Process
CPE credit administered in coordination with
Building a Practice Around the Construction Niche
© 2017 The ShinerGroup. All rights reserved. 2
#QBConnect @LeslieShiner
Leslie Shiner
• Financial & management consultant for over 25 years– MBA in Accounting and Finance from U.C. Berkeley– Advanced QuickBooks ProAdvisor
• Columnist, Remodeling Magazine• CPA Practice Advisor Top Thought Leader• Author:
– A Simple Guide to Turning a Profit as a Contractor– (www.MoneyMazeBooks.com)
Owner of The ShinerGroup
#QBConnect @LeslieShiner
• Create a list of personal issues to help decide between the two primary strategies
• Create a personal timeline for your exit strategy
• Determine key steps to take once an exit strategy has been chosen
Agenda
Building a Practice Around the Construction Niche
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#QBConnect @LeslieShiner
A business owner who works and runs their business alone • About a third of the American workforce comprising
freelancers and consultants fit under category• Just because you work alone, doesn’t mean you
don’t collaborate with other entrepreneurs
What is a Solopreneur?
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You can grow your business through hiring employeesBut there are other ways to grow your business
• You can outsource work• You can increase your rates• You can do fixed price work• Etc…
Have You Hired Employees? (Or Tried to?)
Building a Practice Around the Construction Niche
© 2017 The ShinerGroup. All rights reserved. 4
#QBConnect @LeslieShiner
Have you thought about an exit strategy?
Are you planning for the future?
But What’s Next?
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Not everyone can sell their business• Hard work does not guarantee success
Have you been sold a bill of goods?• Work hard, build your business, sell it for lots of money and retire rich
and early!
You are not Mark Zuckerberg• Are you coming up with something new?• Or just training or using existing products?
The Entrepreneur Fallacy
Building a Practice Around the Construction Niche
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How Do You See Your Retirement?
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Three Exit Strategies
• Improvisation
•Liquidation
•Continuation
Building a Practice Around the Construction Niche
© 2017 The ShinerGroup. All rights reserved. 6
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Spend all your time with the day-to-day business concerns without considering the future
Or is it just blissful ignorance?
Improvisation
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Build a personality-based business
Use corporate dollars to grow personal wealth
Know that when you leave the business, the business ends
Liquidation
Building a Practice Around the Construction Niche
© 2017 The ShinerGroup. All rights reserved. 7
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Continuation
Create a business that will provide income after you leave
Build a ‘saleable’ business
Build a ‘scalable’ business
Build a business based on process
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Three Choices
Improvisation• No strategy
Liquidation• Build a cash cow
Continuation• Create a process
Building a Practice Around the Construction Niche
© 2017 The ShinerGroup. All rights reserved. 8
#QBConnect @LeslieShiner
Ask yourself:• What if I get sick?You need a backup plan • Insurance?• Health, disability, long-term careSuccession?• How will my clients’ needs be met?
No Matter What Strategy You Choose:
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Also called a “Lifestyle Business”• Nothing wrong with a lifestyle business
The business will end when you retire• Or die at your desk
Liquidation – Understood
Building a Practice Around the Construction Niche
© 2017 The ShinerGroup. All rights reserved. 9
#QBConnect @LeslieShiner
Easier to build a personality-based business
Focus on building your business to build your nest egg
There is less need to reinvest dollars to build business equityYou can avoid the hassles of employees
Liquidation Isn’t a Bad Thing
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If you cannot gain economic benefit from your company beyond your working years, all you’ve done is bought yourself a job But having a job where you get to be boss may be your goal• You control your destiny• You create your schedule• You set the rulesDo you enjoy the freedom of being your own boss?
Do You Have a Company or a Job?
Building a Practice Around the Construction Niche
© 2017 The ShinerGroup. All rights reserved. 10
#QBConnect @LeslieShiner
Creating a job is a good model if fills your needsWhat Are Your Needs?
• Helping people• Learning new things• Enjoying being skillful
Emotional needs
• Support your lifestyle• Support you and your family
Financial needs
• Fund your future?Long-term needs
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Buy a job to create a cash cowPillage and plunder your company to build yourpersonal equity
Create a Cash Cow
Building a Practice Around the Construction Niche
© 2017 The ShinerGroup. All rights reserved. 11
#QBConnect @LeslieShiner
Have you sacrificed your life for your business?• In a competition between your lifestyle and your
business, who wins?
Are you able to build enough personal equity?• Is that good enough for you?• Is it good enough for your family?
Disadvantage of Buying a Job
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Succession can only come from creating a business, not a jobThe business must be more process-based and less personality-basedDo you have enough time to create a continuation strategy?
Continuation – Understood
Building a Practice Around the Construction Niche
© 2017 The ShinerGroup. All rights reserved. 12
#QBConnect @LeslieShiner
Ask the Tough QuestionsWho can I sell the business to?
How will I find a buyer?
Will he/she have enough skills to run the business?
How will the transition work?
How and when will I be paid?
How can I guarantee payment?
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An exit strategy is not just who you want to sell the company toIt’s a well-defined, long-term plan that includes:
Create a Formal Exit Strategy
Timing People Process
Building a Practice Around the Construction Niche
© 2017 The ShinerGroup. All rights reserved. 13
#QBConnect @LeslieShiner
Types of Continuation Strategies
Outright sale
Pass on to next generation
Employee buyout
Sell to your competition
Create a partnership
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If someone is smart enough to know what I know, they are probably already doing it• Little to no barrier to entry in our professionThe new owner must make enough money to support themselves and the previous owner• Does your business produce enough revenue to do this?New owners do not have ‘institutional memory’Will your clients accept the new owner?
Outright Sale Can Be Difficult
Building a Practice Around the Construction Niche
© 2017 The ShinerGroup. All rights reserved. 14
#QBConnect @LeslieShiner
Determine • Who is interested• Who is deserving• Who feels entitledDifferentiate between “active” and “non-active” heirsRequires good communication skills strong family relationships
Pass On to the Next Generation
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Only about 30% of family businesses survive into the second generationOnly 12% are still viable into the third generationOnly about 3% of all family businesses operate into the fourth generation or beyond
Family Business Facts
Building a Practice Around the Construction Niche
© 2017 The ShinerGroup. All rights reserved. 15
#QBConnect @LeslieShiner
Emphasizes need for advanced planningDrawbacks:• Key employees often lack capital• If they could do what you do, they’d do it themselvesHowever, hiring and training for succession may help chances of successCreate a buy/sell agreement• A document that assures the orderly transfer of the business from
the owner to a key employee
Employee Buyout
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Management Succession• Create a management team
• Hire and train for succession, speak to succession
• Reward employees that bring in revenue
• Pick and choose the key employee
• Make it expensive for the key employee to leave
• Monitor your own ability to “let go”
Building a Practice Around the Construction Niche
© 2017 The ShinerGroup. All rights reserved. 16
#QBConnect @LeslieShiner
Sell to Your Competition
Quantify the value of your client base
Find a buyer that has the
desire to grow
Find a buyer that has the capacity to
grow
Clearly define a transition
plan
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Create a Partnership
Find your successor
Create a partnership
Identify a buy-sell agreement
Formalize the agreement
Work to the agreement
Building a Practice Around the Construction Niche
© 2017 The ShinerGroup. All rights reserved. 17
#QBConnect @LeslieShiner
Succession Plan Includes:
• The devil is in the detailsPlan for transfer of ownership
• Who is the boss today? Tomorrow?Plan for management succession
• Clients need to feel cared forPlan for client communication
• Are you re-investing in the company or taking money out of the company?Plan for investing
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If the old owner doesn’t buy into giving up the power, then the transition will fail• Clients can’t be made to feel like traitors when
working with new owner
Old owner needs to give guidance but also needs to be willing to step back and allow new owner to stumble
Struggles
Building a Practice Around the Construction Niche
© 2017 The ShinerGroup. All rights reserved. 18
#QBConnect @LeslieShiner
If you are using the most up-to-date technology, the value of your company is greater• Purchasers want a seamless transition without
wasting time moving to new systems• Since we live in a global world, using more cloud
based technology opens up your potential buyers to anywhere in the world.
Technology Plays an Important Role
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The strategy you choose for tomorrow will determine how you run your business today!Prepare for planned succession…As well as accidental or tragic succession!
The Clock is Ticking!
Building a Practice Around the Construction Niche
© 2017 The ShinerGroup. All rights reserved. 19
#QBConnect @LeslieShiner
Personal goals:• Is there life after work?• Can you separate work from home?
Financial goals:• What is adequate security for you?
Business goals:• Do you know what you actually sell?• You work for your clients, but did you realize that a good client base can work
for you?
Set Your Goals
Depending on your goals, the way you grow your business should align with your end-game objectives
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Create Reasonable Expectations
How much longer are you going to work?
What will your expenses be after you
stop working?
How much are you spending vs. saving
now?
How much is your business worth
today?
How much can your business be
worth in the future?
Building a Practice Around the Construction Niche
© 2017 The ShinerGroup. All rights reserved. 20
#QBConnect @LeslieShiner
Liquidation (Cash Cow)
Continuation (Building Equity)
Determine Your Strategy
Improvisation
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Different Actions for Different Strategies
Liquidation• Build that cash cow• Create your own financial
stabilityContinuation• Determine type of continuation• Invest in building company value
Building a Practice Around the Construction Niche
© 2017 The ShinerGroup. All rights reserved. 21
#QBConnect @LeslieShiner
• What are your personal issues that can help decide between the liquidation and continuation?
• What is your personal timeline for your exit strategy?
• What steps do you need to take now?
Summary
Know that the skills that got you where you are today are not the skills you need for tomorrow
#QBConnect @LeslieShiner
Leslie C. Shiner, MBA
LShiner@ShinerGroup.com(415) 383-6255
www.ShinerGroup.comwww.facebook.com/TheShinerGroup
Twitter: @TheShinerGroup
Questions and Thank You
Join Leslie for more sessions:
Building a Practice Around the Construction Niche• Today at 4:50
Niche Panel• Tomorrow at 11:00
Building a Practice Around the Construction Niche
© 2017 The ShinerGroup. All rights reserved. 22
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Building a Practice Around the Construction Niche
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