Jim Immel - Legacy Decision Making

Hi everyone, it's Bill Black, the exit coach from the Exit Coach Radio show. You know, one of the biggest questions I get on the show is what exactly goes into a business exit plan and when should I start creating mine? Well, I always tell people that the best time to start was 5 years ago, but the next best time is now because you never know when you might need it. So we put together a free report that describes what an exit plan is and what you should know. You can get it free by texting exit plan with no spaces to 44222. That's exit plan to 44222. Again, text exit plan to 44222. Welcome to the Exit Coach Radio show, the show for baby boomer business owners who are looking for cutting edge information as they plan their 3 to 10 year business succession and exit. Every week we interview top professional advisors for their best tips, strategies, and precautions so you can be well planned. And now here's your host, the exit coach Bill Black. Hey everyone, thanks so much for joining me once again today. Always a pleasure to have you with me, and we have a great lineup of guests today and want to get right into it. You know, during the course of being a business owner, you're asked to make a lot of decisions. Some, some are small decisions and some are what my next guest calls legacy decisions. He is Jim Immel of Immel and Associates out of Iowa, and he helps business owners to really take a look and see, you know, what's happening in their business, ask them the questions that need to be asked, and bring them along with some solutions and strategies as they navigate their way towards whatever their, you know, objective is, whatever their planning objective is. So I'm going to bring him on right now, Jim. Thanks for joining me once again today. It's a pleasure to have you. It's been a while. How you doing? Yes, it has been a while. I'm doing quite well, and thank you for the opportunity, Bill. I appreciate this opportunity. So do you have any questions for me? I have lots of questions. I have lots of questions, you know, Jim, I got to tell you, I think the last time you were on it was over 5 years ago, and it was, it's been one of the most listened to episodes as I look back and see, you know, what are people listening to, and it had to do at that point. I don't know if you remember, it had to do with what are the questions that your spouse would ask. If, if all of a sudden you were unfortunately, you know, you passed away or were unable to work anymore, what are the big questions your spouse would ask, and it really got a lot of our listeners to thinking about those types of things. And so that's what you do. Tell us a little bit about Emma and associates and your background, and then we'll get into the subject matter of the day. Yeah, and I'll get through that pretty quick. So, um, I started back in 1977 right out of, uh, college, Iowa State University, and I decided to go into the insurance business. And when I made that decision, I had no idea what was in front of me, but when I started, I, uh, I was young, uh, just coming out of school, and I found out that I really did not enjoy working in the evenings. Uh, what really, uh, excited me most was working with business owners and, uh, very early in my career, um, I was OK with going out and making cold calls and introducing myself to a lot of people that were. Um, the generation ahead of me and, uh, in each and every case I continue to learn more and more about business owners. And then, uh, as my uh career advanced, I ended up finding myself in the corner office with business owners. And really I had them better prepared if they died or became disabled than if they lived. And I started to think to myself, you know, that maybe something, uh, can be different and for probably a 5 year period I was just thinking about what's next and then it just came to me, um, actually clients, uh, kind of formed my business plan because they started to ask me to help them with other planning and, uh, being securities license at that point there's some. Uh, things that you have to navigate, uh, because you're talking about ownership of their company and being securities license, there were a lot of things I had to be careful of. So what ended up happening is from. 1999 to 2004, I actually played both sides of the fence a little bit. I was still a financial advisor, uh, selling risk management, uh, products, and I was doing coaching and it just got to be very complicated kind of being on both sides of the fence. So in December of '04, I was full on in uh in one associates and operating as a business coach. That's great. And so, you know, it's again, it's finding out that yes, in the one of the things the insurance world um teaches you, as you and I came from a similar background, one of the things it does teach you is how to ask a lot of questions that other advisors might not ask, how to really get to know what your client cares about. Did that, um, did that, uh, stint in the insurance world, um, help you with, with where you are now? Yeah, uh, you know what I, what I found out, and this is decades ago now, I found out that really what our competition is, anybody listening to the program, if you're helping people go through change. Our competition is what I like to call the magnet of status quo. Uh, people have to, uh, get off the status quo. They have to see something in front of them, believe in it, uh, almost have it as, uh, I'm not serving my client well enough if I don't get off the status quo and move forward. And to get people off of status quo, I've just Forever been focused on what are the questions that I can ask. Uh, I started to say, uh, to myself, OK, if I can, if I could make this statement, what would I love to be able to make as far as a statement? And then realizing I don't move people off status quo by making statements because it's my idea, it's not their idea. And so what I started to do is just really focus on situations that were very common with business owners and just started to focus on what are the questions that I can ask to move them off status quo and uh build the uh example uh I think because you brought it up from our conversation five years ago. Is how do you get business owners not only to Think about, but to embrace the necessity of looking at their shareholder agreement, their buy sell agreement and understanding the risks that that document has for each of those shareholders. And many times people never look at it that way, and so I believe words matter. So in selling insurance to finance, Those buy sell agreements and the obligations of those buy sell agreements. Uh, for, for people to embrace that, you need to ask the questions so they have it as a necessity that they have to take care of those obligations and, uh, probably 20 years ago when I'm still selling insurance, I, I, I just started to call it financial risk management, not the insurance business, because that's really what people are buying is managing. Yeah, it's it's the correct deployment of capital to handle business situations and risks. Good point. So Jim, when you start and initiate a conversation, let's say you're introduced to a business owner, what are, how do you like to initiate that initial conversation? What are, what are some of your, let's say, icebreakers? Well, fortunately for me one of the most common icebreakers is that I was either referred or introduced to a new client. So it's just very, very easy at that point to start talking about the person who introduced us, you know, find out how they got to know them, they understand how I got to know them, and in almost every situation they've asked a lot of questions about what I do to the people that introduced me. And so, uh, If there's one thing I can uh uh pass on to other financial advisers is to uh serve your clients well and when you do, they are willing to help you. And so I typically Just connect around that and then uh probably. Half the time, the business owners will start with the first question. They'll say, Jim, tell me what you do, what's your approach? How, how do you help people like me? And at that point, Bill, I learned from my dad. When you're asked a question. Return it with another question so I turned around and I would just uh ask them, could you give me a few minutes before I answer that question, because really what I would rather uh do is have you understand what I do by the questions that I ask. Can I just ask a couple questions so I get to know about you and your business and then when I answer. Uh, after maybe 5, 10 minutes, I'll answer your question. And people say sure. So, uh, if you're a business owner, Bill, what I would do is I would turn around one of my favorite, uh, lines of questioning is, you know, for me to get to know you a little bit. Maybe what you can do is share with me as you look back in the last 12 months of your business you've made a lot of decisions. What would you say is the biggest decision that you've made in the last year? Maybe it's a decision that's changed the vector of your business. Uh, maybe it's been reactive, maybe it's been proactive, but maybe you can share with me the biggest decision you've made. And 50% of the people just get right into it. And the other 50% will reflect and say that's a good question. And yeah, that's probably one they don't hear from a lot of, a lot of advisor. I mean, I'm sure they don't hear it from their, their CPA or their attorney or their other trusted advisors, so that automatically kind of sets you up immediately as someone who's going to be different and thinking about the past. How does that biggest decision help you then chart a course to, to ask additional questions with the client? Well, so Bill, I, I do some, uh, coaching of financial advisers who want to be in this market as well, so, uh, like the book that you know that I'm starting to work on, it really has two audiences. It's written for, uh, the business owner. But the other audience is really for the advisors whether it's an accountant attorney, uh. Uh, financial advisor, whoever else is an advisor, uh, the questions that are in that book are really key to help any advisor, um, move their clients off status quo. And so the thing that I coach a lot of people that I'm coaching is, is, uh, once they start telling you about their biggest decision. I, I can have that conversation going on for an hour. I tell them to just pretend you're 4 years old, just keep asking questions, always be curious, dig in and say that's interesting, you know, how long have you dealt with that? What were the other options that you considered? Uh, did you know of anybody else who has been through this? I mean, I can keep coming up with deeper and deeper questions and then turn around and talk about what's the impact. Are, are you getting what you hope for? Is it better than you thought, you know, what challenges do you have? Uh, I can go for a long time and just be naturally curious, and those questions, Bill, are so simple and easy. But they are adding value every time because these business owners do not have the opportunity to sit in their corner office and reflect on these types of questions. And that's where we're adding value. Yeah, and it almost, it almost, when you go down that line of questions, it almost sounds like a part business psychologist in some ways and of course psychologists ask what seemed to be simple questions, but they're leading somewhere. So where are you? Where are you hoping to get to with the interview? You're leading the client somewhere to go deeper into these things? Is it to build trust? Is that the idea to show the client that you care about them, or are you going to turn that into now that we know that, let's, let's talk about what we need to do? Yeah, well. I like to read a lot and one thing I was reading a couple 3 years ago is I, I don't know if you've ever heard yourself recorded, but it sounds differently. I'm sure you have heard yourself recorded and the reason is is because behind our ears, the part of the brain that starts to shut down, not to cause confusion with the echo of of our own voice. is the part of the brain that goes into fight or flight. And so what ends up happening is if I get clients speaking 80% of the time in my first hour conversation. The more they speak, the less their fight or flight is in and the more they end up trusting me. That's part of it, but really I have clients take away, um. Quite a bit, uh, I love it when they walk you out to your car after the initial meeting and you've got another meeting set up. So really the first meeting in most cases is I am there for a reason, you know, if you think about it, Bill, advisors, you know, the business owners aren't just looking to take an hour out of their day or an hour and a half, uh, so they're there for a reason. So through this question it's just a good getting started. But then really what I want to do in order to move forward and ask anybody about their goals for the forward thinking people, which business owners are, go back, get them to reflect, find out where they've been, understand that they're making progress and understand if they set something out in front of them they're gonna make more progress. So I, I call that concept take them back before you take them forward. And you know if if It works because uh after the what have you done in the last year for fun sometimes I go, what was the biggest decision you made 10 years ago and most of the business owners will laugh because they can't remember, but when they think through it and find something about 10 years ago, they're gonna realize how quick 10 years goes by. And you know for what you're doing for the business owners that dial in in this, many of them are 10 years away from making that decision to transition the ownership and leadership to other people. And so many of them think it might, you know, I can wait, I can wait, but if I take people back 10 years ago and they start to experience and remember the emotion of making those decisions, they're gonna realize that 10 years is here before they know it and honestly that's why I, yeah, that's why I do the, you know, tell me about your decisions in the last 12 months. They tend to be engaging conversations, Bill, because you're right, other advisers are not asking these questions. And so they will they'll bust open their calendar and let me continue to go. Well, it's, it's, it's probably a refreshing, unusual hour for them, and I've heard you say one other thing that's very interesting, and this is your approach to this business and your life, and that is that you view every client opportunity as an opportunity to be mentored yourself. What do you mean by that? Well, and I remember when I had that mindset because I realized coming out of a couple of meetings, almost back to back meetings that I, I had the thought about who, who's taking away more from this relationship? Is it me? Am I taking more notes or am I is my client taking more notes and every. Business owner I work with has some type of best practice in their business. Uh, they might be a 9, a 9, a 9, and a 3. Well, the 3 is what's limiting the success because it's the lowest common denominator is the amount of success that they're going to get. And so what I'm really looking for and actually it's what I'm trying to ask questions for so the client can find it is where those threes and fours are that are limiting their potential. And, uh, I, I'll just say this, uh, I'm asked this question a lot, Bill, people will say, you know, when you get introduced, is there a common theme or is there something that's going on? And unfortunately it's still happening today that probably 40% Of the engagements, the opportunities I have to work with is when a client of mine is talking to a friend of theirs. that had a uh Key employee I like to call them critical employees because they're critical to the business they're critical to the leadership, uh, customer relationship um there's too many key employees. I like to differentiate the critical employees from the key employees. And I've got story after story of situations where if my client could have introduced me to their friend a year or two earlier. They most likely would have re-engaged those people instead of losing them. Right, so, so a big part of succession planning. A lot of times people refer to it more as preparing their exit. Sometimes it's critical. People are ready to retire and they want to have a successor for them, but everybody defines succession planning uniquely. And if you really take a look at the situations, your ability to transition ownership and leadership. Uh, it's far better when you're retaining your talent. Uh, it's shared success, the more that you can give them clarity of what they can do and how they can accomplish it and share the rewards. Um, it's the old concept of less and less and more and more. You might be sharing more with other people, but you're making it on a much bigger number. And it also allows some people to almost go into a Semi retirement for a few years before they pass the business on to somebody else. Yeah, I think a lot of people are looking for that these days, especially to get away from the business. I mean, a lot of aging business owners have been thinking about that for a while. How can I keep the cash flow, keep the Identity of the business and then down the road pass it on and Jim, let's get into a couple of immelisms, OK? These are, these are Jim Immel patented statements or stories couple got time for a couple of quick ones. First one is tell us where the name key employee came from. Tell us that one in about a minute if you could. Well, this, this goes back quite a few years ago, um. Everybody calls them key employees. Well, my grandfather owned a grocery store, and he had two key employees. It was the butcher and the baker, and where it really came from is who has the keys, and the story even goes further because the fire department needed to know who to call if they couldn't get a hold of you if something was on fire. So who has keys to your place? Sometimes the police department had it, so all of a sudden everybody is like who's the key employees and I'm sure the You know, financial advisors slash insurance agents back then thought these are critical to your business. So what happens to your business if you lose these key employees and you know I've never read it in the literature of, uh you know, insurance manuals, um, but when I bring that up, people will share stories about key employees, but now everybody should be an access card employee instead of a key employee but what just what I ring to it. Yeah, what I, what I like to do though is when I'm interviewing clients and they're talking to me about who their key employees are, I say, you know, just help me understand that's the uh way I get into a lot of questions is help me understand, you know, when you say key, uh, just help, help me understand what they're driving, how they make a difference, and sometimes what we have to do is we have to say, you know, if they left your business what would be missing because you, you don't really see what they're doing until you have that. Uh, fear, thought of what if they left, and the, the people that are critical to the business, they are, they're changing the relationships that, uh, internal relationships, external, uh, they, they impact the culture. Another word I like to use is impact employees because that's what they're doing is they're impacting the marketing plan. Uh, the brand might have a, a huge part of a brand might be around 1 or 2 of those impact employees. And so business owners a lot of times don't get time to think about that. And uh you know you mentioned before other advisers aren't asking the questions. uh what's interesting is many times like there's an accountant who's introduced me to some of his clients and many times he'll walk out of meetings and say I, I had no idea they were doing that. Or you know it's just because they are there, uh, dealing with other issues. And uh so I, I just look at it differently, but um that's why the accountant continues to introduce me to some of his clients because he knows that uh the people are thinking differently and taking action. One other area that I think our listeners would really like to hear about from you is you've talked about the, you know, that a lot of people say there are many ways to exit from a business, but I've heard you say that when it comes down to it, there are a lot of strategies, but there's really only two ways that are meaningful. Can you share that with our listeners? Yeah. Yeah, uh, in fact, that's going to be chapter one, Bill, I think I sent it to you for you to review, so it, it's uh. If you really think about it, what a great way to start a conversation or segue into the conversation, but you know, I just, uh, act like Columbo at this point and I just like to say, have you ever sat back and reflected how many ways there are to get out of business? And, uh, I've asked that question for years, actually decades now, um. And people will, if I write down 12345 in front of a business owner, they feel like they're competing to come out with at least 5. If they start whipping them off real quick, I might write down 6 and 7. And so, but what they do is they'll come up with different ways to get out of business. And uh then I'll just ask the question, is it OK if I share with you my my thoughts on this and uh the business owner will say sure, and I'll say I think there's only two ways to get out of business. And it's kind of fun because you'll get the look like, well why did you have me write down 5 but I just wanted them to number one it's a fact finder because the 1st 2 or 3 are the ones they're thinking about how they're going to get out of business. And so then what I say after that is I just, I believe there's only 2, and I like to give it the theatrical pause at that point and then. Uh, just mentioned that I believe there's only 2 in 1. from a position of strength. And then I just stay quiet. And they will typically say or not or weakness or whatever, and I'll just say if you really think about succession planning in this way. It'll help you focus your efforts. And so that many times starts to lean into questions like, well, what have you seen other people do, you know, for them to be in a position of strength, what do you see? And I'll say, well, I'd like to ask this question, you know, what are the top two? strategies that you could deploy. To make sure that you are in a position of strength, whether it's an internal or external buyer. What do you think the top two things that you can be doing to prepare you? And Unfortunately many times they're, they're just a blank stare they don't know and uh at that point they're saying, well, tell me and so. It it's definitely something I like to ask in the first meeting, uh. And I do the decision question and then get into that one, and a lot of times people and they will say I've never looked at it that way. Uh, that's honestly the most common response. Yeah, it totally makes sense and it, and most business owners don't like to go, they didn't get into their business without some kind of a plan, most likely. Right, so So Jim, you're writing, you're writing a book and as you said, I, you graciously shared a couple of the early chapters with me. Tell us really quickly a little bit about The what the book's going to be about, you said earlier that it's going to be not only for business owners but also for those that advise business owners to help them do a more effective or maybe more thorough job of that. Tell us a little bit about your intention with the book and and of course we'll have you back when it's out, but tell us a little bit about it. Well, you know, it's interesting, Bill, the exit coach, what you're doing is to help a lot of people that you will never meet, and part of me is just thinking that this book will help a lot of people that I will never meet. And so there's only so much capacity that somebody like myself has, but what can I do to help other, other people. And It's really there to help people move off status quo. It's to help the business owners reflect on some of these questions. And start to realize that if this is really what I want, how do I make it something I desire? How is it something that Uh, I will, uh, persevere and go through change in order to get what I want because the magnet of status quo is so strong, it just sucks business owners back in. Uh, day after day, uh, because of the whirlwind that happens in business. And so you know if you were to dry out and draw a rectangle and put on the far right, you know, uh, positive feelings and on the far left negative feelings. And at the top positive outcomes and at the bottom negative outcome. That lower left hand quadrant is where pain and frustration and Sometimes business owners have been wanting to move off status quo, they just don't know how to do it. And they're they're in this, you know, I'm not feeling good because I'm not moving forward on creating the exit strategy. Um, I'm not getting the outcomes I want. I just lost another critical employee. And where they really want to go is they want to go to that upper right hand quadrant, which is where you're starting to get outcomes and you're starting to get positive feelings. And so what I really am writing this book for is to get people to understand those questions. Focus on that upper right hand quadrant and imagine. That they're taking action. Imagine that they are giving a vision of where their business can go. And more importantly than that, everybody that works for him has a vision of how they succeed. It's shared success and they're moving towards a, a new beginning, which is in that upper right-hand quadrant. So I ask a lot of questions that get people to imagine what has taken place in 5 years. Uh, I call it the paperwork party. But at some point in time there's a paperwork party when somebody is passing their business to their talented team or negotiating to an outside buyer. And there's a lot of documents to be signed. So imagine what that looks like, what it feels like, and it. What I'm trying to do is inspire change. And so the reason I'm really writing the book is, and it's been good for me because it helps me. Focus and simplify some things maybe that I used to make more complex, but it's really going to help a lot of advisors and ultimately a lot of business owners, uh, take action. Jim, always great to talk with you. I always end up taking a lot of notes as usual and get a lot of great statements that I can use further in my business. One of the things that was on your website is that you basically you help business owners to get unstuck from some of the areas they may be stuck in and give them clarity, confidence and courage. The website is immel associates, I associates.com. And Jim, if someone wanted to get in touch with you, go to your website and check things out, they'd find a lot of things there, but then from there, would you invite a call from a listener? Yeah, uh, actually just send me an email Jim at. Immo associates.com. And uh send me your contact information and we'll get something set up and uh so currently um. Helping a couple other financial advisors who really, uh, have been working in this business but want to dedicate themselves to this business and, uh, I love working with the business owners, but at the same point in time if I can duplicate myself and, and, uh, coach some other people to engage people wherever they live. Uh, I'm, I'm more than happy to, uh, coach a few people that, uh, might be viewed as my competition, but as you know, Bill, the market is huge, and there are a lot of people that are seeking help. So, um, I think it's a great opportunity and I do believe that there's a great opportunity ahead for myself and for anybody who dedicates themselves to this market. Great point, Jim. Thanks very much for joining me once again today. It's been a real pleasure. OK, thank you, Bill, for the opportunity. Thank you for listening to Exit Coach Radio.