Why are businesses that operate independently of their owners more valuable? Scott Snider, President of the Exit Planning Institute (EPI), educates professional advisors and business owners around the globe about the Value Acceleration methodology. Scott joins Laurie Barkman to discuss how owners can gradually relinquish control and not let your company define you. They also talk about Scott’s own succession experience over the last 10 years with his father, Chris Snider, owner of EPI.
Listen in to learn more about:
- Shifting to a business framework centered on value, not income
- Aligning business, personal, and financial goals
- Cross generational business transitions
- Addressing difficult questions around succession
- How to gradually relinquish control of your business for a smooth transition
- How new leaders can build their own vision or the future
- Resources, methodologies and tools that can help unlock value in your business
Show Links:
https://www.linkedin.com/in/scott-snider-epi/
https://exit-planning-institute.org/program/certified-exit-planning-advisor/
About Succession Stories Podcast. Succession Stories is hosted by Laurie Barkman, the Business Transition Sherpa– guiding business owners through the process from “transition to transaction.” Book a 1:1 Advisory call at: www.meetlauriebarkman.com
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Transcript:
Laurie Barkman:
Scott Snider is the President of the Exit Planning Institute educating professional advisors and business owners around the globe about the Value Acceleration methodology. It’s a process that allows owners to create companies that are independent of them. Following a process, finding a way to gradually relinquish control. We had a fantastic conversation about not letting your company define you. We also talked about Scott’s own succession experience over the last 10 years with his father, Chris Snider, owner of the Exit Planning Institute. Listen in to learn why making your business independent of you makes it more valuable with Scott Snider.
Laurie Barkman:
This week is a really great episode. Scott, I am so excited to talk to you. I’ve talked about the Exit Planning Institute on probably a third of our episodes, and it’s a consistent theme to talk about exit planning, talk about business owner readiness, the future of transitions and getting our headset around it, and here you are, you’re part of an organization that this is what you do, you live and breathe every day. You help business owners, but now at the same time, you are living it as the second generation of the Exit Planning Institute. So excited you’re here. Welcome.
Scott Snider:
Yeah, thanks for having me. I love doing this stuff, so happy to be on the show.
Laurie Barkman:
Great. Why don’t we start with an overview of the Exit Planning Institute, which acronym is EPI, for shorthand. Just a quick high level – what’s EPI?
Scott Snider:
The Exit Planning Institute is a professional education organization. We teach professional advisors of a methodology called the value acceleration methodology and then those advisors go out and they surround the owner on a collaborative team to all help the owner grow value in their company, position it for an eventual exit, and align business, personal and financial goals so advisors come to us for that designation, called the Certified Exit Planning Advisor, but they also come to us for content, tools, resources, we have an academy style program that if credentialing isn’t right for you, you can still learn. We have conferences, chapters, all that good stuff.
Laurie Barkman:
That’s how I got familiar with you. I was in your class for the certificate program, which was oh, my, what, two years ago, I guess at this point, probably, two years ago. We’ll definitely be singing off of the same song sheet here, but I think just for perspective, this organization in total is how old and it was founded by your father, correct?
Scott Snider:
It was actually founded in 2005 by two investment bankers in Chicago named Peter Christman and Richard Jackim, so I guess we’re approaching, I guess, our 20th year in business, but interesting enough, you alluded to my dad, Chris. My dad, I think, really evolved and changed the industry. Interesting enough, Chris is and was a certified Exit Planning Advisor, he was actually part of the first 100 CPAs, he got certified in 2008 and he was running a consulting and M&A practice, so really, almost full circle, helping business owners grow value position for exit, and then actually helping them sell their companies and transition.
Dad became a CPA because he didn’t really focus on the personal or personal financial, and he thought something that was missing so he fell on EPI became a CEPA, and then I came along in 2011, after selling my first company so I’m technically an exited owner, and partnered up with dad to help grow his advisory firm and then we quickly realized that, or I certainly quickly realized that Chris, dad, had a methodology that took these concepts that the Exit Planning Institute was teaching, and put them into action. If you rewind 10 years, I think the profession is still really young. A lot of owners and advisors are kind of struggling with this. It all sounds good, but how do I really do it? How do I really practice it? How do I incorporate it into my business every single day, that process became known as the value acceleration methodology. Dad and I flipped our model in 2012, we said, “Look, we share our same purpose,” so the technical purpose of EPI is to actually help business owners grow more significant companies, ones that are valuable, transferable, and aligned to their three goals; business, personal and financial. We said, rather than operate here in Cleveland, Ohio, which was where we are, we would have a bigger impact on that purpose and again, if we could educate folks like you, then come around the owner, and advise them through this growth and exit journey that they go on. In 2012, we bought EPI, incorporated the value acceleration methodology and have been teaching that methodology over the last 10 years to professional advisors across the world. EPI is primarily in the US, but we’re in about maybe 15 other countries across the world.
Laurie Barkman:
Yeah, across the globe. That’s amazing.
Scott Snider:
It is.
Laurie Barkman:
Let’s rewind a little bit. Okay, go ahead.
Scott Snider:
Every owner that you look at has a similar issue that they are so concentrated on growing their business, maybe even over a 10, 15, 30 year timeframe, that they’re really focused on the operations of that company and making that company successful, but then when they come to exit and do something different in their life, harvest likely the biggest asset that they have, they don’t get the money that they want or maybe even need, or they’re not able to sell it at all, or they have a failed family transition to the second or third generation. I don’t care if you’re in Australia, if you’re in Canada, and you’re in the UK, or if you’re in Cleveland, Ohio. I think all owners have that similar problem and then they have this holistic problem that says, “Look, over the last 30 years, I’ve been so concentrated on growing my company that I can’t picture a life outside of doing this,” so they haven’t wrapped a personal plan and a personal financial plan around those business goals. I think people come to EPI because they’re seeing their owners have similar problems, as I think across the world; the baby boomer type generation is hitting that age where they’re like, I think, maybe 62 or 67, “Maybe I don’t want to get all the way out of my business. But I do have grandkids. Now there’s just other stuff that I might want to do in life.”
Laurie Barkman:
Absolutely. It’s like a common language that people might want to have a transition. It’s interesting. I had a great discussion on this show with a woman, her name’s Nike Anani and she’s originally from Africa. She lives in the United States, but in that continent, for whatever reason, the percentage of companies that transition from first to second generation is like 2-3%. It’s really, really low, so to your point, underscoring, it’s no matter where you live, there are certainly issues. I want to just rewind a second about you for people who are listening as opposed to watching the video on our YouTube channel. Can’t see how young you look. Without revealing how, if you would like to share your age, that’s fine, but just generally speaking, are you in your 30s or 40s?
Scott Snider:
Yeah, so I tried to grow this beard during COVID so it actually aged me a little bit, but I can appreciate that now I’m 36. I’m 36 years old and so technically, second generation in family business and some even consider me maybe third generation in exit planning, because although we have no family tied to Peter and Rich, now you have three different perspectives from almost three generations, like Peter and Rich are probably the upper end of the baby boomers, my dad’s the lower end of the baby boomers, and then I skip a generation all the way to the upper end of the millennials so the lasting legacy through the generations of exit planning is cool, but yeah, I’m 36 years old.
Laurie Barkman:
What was that conversation like? You said you had a business and I know from your bio, you were in your teens when you started your company and you mentioned you had an exit. What was that story?
Scott Snider:
It’s an interesting ride. I was pretty young when I exited my company but yeah, I started that business at my desk in my geometry class in high school. While I probably should have been paying attention in school, I had one job ever in my entire life. I was a janitor at an all boys High School at the high school that I attended. I would stay after and work part time and I just honestly hated it, so I was like, “Man, what could we do that gives us a little free flexibility in our time?” We literally, me and my buddy Mikey, threw a lawnmower in the back of a Ford Taurus sedan literally bunching toward the current trunk down and legitimately just called ourselves landscapers and probably like all little kids that that are adolescents at that age, just mow lawns for 20 bucks. Fast forward three years and we’re now like freshmen in college, we have a pretty legitimate business, we have like, six people working for us. We have multiple trucks, we have commercial contracts and then in what would have been the fall of 2009, we were approached by a competitor, but also a partner, so the person that bought us, did a lot of tree care, arbor care, we did not, so we would sell everything out to them. They approached us and said, “Hey, have you ever really thought about selling your company? We love your people, we love your process. We like your equipment, we love your contracts and customers. We like your training program,” and I said at the time, I think I was like 24 years old, I was like, “Nah, this is what I’ve been doing for nine years of my life since I was like 15.” Luckily, the story that we talked about Chris, my dad, my dad’s a CEPA, so I knew a little bit about exit planning and a little bit about M&A but I don’t think my dad really at that time even saw that businesses all that serious so he was really like there’s certainly not a holistic plan that was going on for me at 24 but we ended up taking that deal. We ended up closing in April of 2010.
It was a small micro market kind of company right now. Not anything big. We did have about maybe 10 or so employees and maybe six trucks but we took maybe the rest of that spring and summer to transition the business through what would be considered at least here in northern Ohio one of our really busy seasons as we kick off the growing season. Then like many owners that might be listening, I wandered around for like a year, because I had no personal planning. Can you imagine I had a runway though, because I was only 24. Now imagine even if you’re an owner listening right now, and you’re 55 or 60, or 65, like you kind of got to figure out what you’re passionate about because although you do have a long runway, you don’t have as long runway as I had at 24, for sure and so for somebody that’s maybe 65, you might have owned your business for 30 something years. The transition, from a business standpoint, went really well. The transition from a personal standpoint, not that it didn’t go well but I spent some time wandering before my dad asked me, “Hey, man, why don’t you come into the consulting firm, and help us grow this business like you did your landscaping company?” I’ve always wanted to own companies and real estate and different ventures together so I thought what was really interesting about the consulting firm that he had is that as an owner, I was like, “Man, you work with all kinds of different businesses, which is just fascinating,” right? It could be landscaping, it could be manufacturing, it could be non-medical home health care, IT consultant… he had all kinds of different companies that he was working with, so I said, “Yeah, let’s get in there,” so I had my first exit, would have been probably 24 or 25, and then fell in with my dad and then basically two years after that, we bought the Exit Planning Institute.
Laurie Barkman:
That’s a great story, and you’re really living it. Some people say eat your own dog food. What you guys are doing, you’ve had a transition recently, and congratulations on that. Do you want to talk about the succession, the official succession in your company?
Scott Snider:
Yeah, absolutely. I think that for anybody that is listening, that knows Exit Planning Institute, at least, I’d like to think that we tend to use our own company as our case study. I think that when certified Exit Planning advisors, folks like you that are inside of our communities turn and say, “Scott, can you show me some case studies like how was an owner actually implementing this with a team of CPAs?” I say, “Guys, here we are,” and to your point, we kind of have this interesting family dynamic, too, so yeah, we’ve owned EPI for 10 years now and in the summer, I think, of last year, we named me officially the president of the organization.
Dad is still pretty, pretty active, but he is more so concentrated on vision, strategy, concentrated on content. He’s the head of our faculty and he really is kind of living his dream, which was to speak and teach at a cadence or a rhythm that was kind of on his flexibility and timeframe. My mom retired like two years ago, and she’s been waiting two years for Dad to come hang out and no, I don’t mean any offense to any baby boomers listening, but he is the typical baby boomer business owner. He loves his company. He wants to feel successful and the baby boomers are the inventors of the 60 hour work week so not showing up in the office every day is weird for dad, but he found his stride over the last year or so.
Honestly, I think the pandemic really made him look differently, look at life and look at business differently and so, in June of last year, we transitioned me into the President’s role. Really, I wrote a new vision with my team here at EPI, we wrote a new vision and purpose and core values for our business that will take us into the next five years and I think that’s important to say. If you look at some of the data, just last month, I had our state of the institute address, which talks about EPI, but also talks about where the profession and market is going and it’s just very interesting statistics. I think it’s something up to about 36-40% of the lower middle market and small companies privately held in the United States today are actually owned by people under the age of 50. We’re starting to really see the two next generations, the Gen Xers, the millennials start to come in as business owners and I think for the advisors listening, it’s really an awesome opportunity to kind of reshape the way business owners think about running, operating and growing their companies. One that’s not concentrated on income but concentrated on value, and has these three goals business, personal, financial, all kind of align.
We did that in June of last year and dad has spent most of his time down at the lake house with my mom, speaking, writing and teaching. We’re actually writing a new version of his book, Walking to Destiny, so we have a Walking Destiny 2.0 coming out in the third quarter and I think he’s really focused on the things that he’s certain He found his passion and purpose and he’s off doing that while I’m here running the business, which also has allowed our family to do some much needed estate planning and financial planning as well.
Laurie Barkman:
Yeah, that’s perfect. I have this visual in my mind of this baton. The baton going from one like a relay race and he didn’t drop anything. You had a clean hand off and you’ve been hitting the ground running, because it wasn’t like you just joined you’ve been in the company for a while. If you put your business owner hat on…
Scott Snider:
Sure.
Laurie Barkman:
Sorry, didn’t mean to cut you off. Go ahead.
Scott Snider:
No, no.
Laurie Barkman:
If you put your business owner hat on and you look back now and say, what were some of the really important things that you talked about strategy and really kind of reshaping vision, but if you look back maybe the last five years, and the focus within the organization to get the organization to see you differently, to see you as the head of the organization, somebody that they weren’t always going to be bouncing to your father for answers, they’re not going to go to Chris, they’re going to go to Scott, what did you have to put in place to help the organization scale and from a cultural standpoint, make that mind shift transition?
Scott Snider:
Such a rabbit hole that we can go down, so let me try to maybe high level summarize. One, I don’t think it’s easy for any business owners listening, whether it’s a non-family, I think that high level, I think that every owner should be thinking about making their business independent of them, even me at 36 years old. Now, I think we were talking about this on our pre-show, where dad, where this whole process started, was Dad asked a question. I think it was December of 2019. He said, “Scott, we finally got me kind of out of the business, and the business is certainly independent of me, but what if you die?” Two to three years ago I’m like what, 33, 34 years old? You’re not thinking about that, right, and the Exit Planning guy, me, I’m like, “I guess I don’t really know.” He’s like, “I don’t know if I could even come back and operate the business because I don’t know the stuff that you know,” so then we went on this two year journey, 2020 and 2021, to really build a team around me and now we’re focused on building the organization independent of me as well. But I think I tell you that story, because I think that that’s not an easy comment for dad to say.
Again, I always refer to generations – a big generational guy – but if you look at the generational characteristics, again, just generally of baby boomers, they like control and so I think my first lesson for anybody listening is to find it in yourself, whether that’s through advice from your advisors, your mentors, through reading through listening to podcasts like this, to relinquish control gradually. I think from the starting generation to the next, and so I do commend my dad from being like, “Okay, like, here we go.” However, you have to build rapport with that generation, like dad’s never going to toss the baton to me if I haven’t proven myself, if I haven’t kind of walked that path and so, if you think about that, for nearly 10 years, we’re celebrating our 10 year anniversary, for nearly 10 years, I sat in the Vice President’s role, running our company to frankly, doing similar things than I do today, just with a different title and so I think the the next generation being cool with that, and kind of building your path and then for the first generation, or the older generation, to be able to say, “I want to relinquish control,” I think that that relationship has to build over time.
I think that after that, the next generation needs to build a plan. Like I think one of the first things my dad said was okay, “What’s your vision? Where do you want to go? What are the metrics? What are the goals? What’s a three year strategy?” And so you have to be able to do that as well and then in between there, there’s physical, literal tools and resources that help you have those types of conversations. From a family perspective, dad and I use a book called Every Family’s Business written by Tom Deans. In the back of that book, they have a family business blueprint that we use every single year in advance, it creates a tough conversation.
Questions like, “If an offer was on the table, would you sell?” Gen one might say yes, gen two might say no, “I’m just starting,” and it has dialogue there. The next tool that I would recommend is our value acceleration methodology. We do what we would call an enterprise value assessment, which is a combination of an analysis of these intangible factors and the tangible factors to evaluate and then to see kind of the holes and weak spots in your business. We do that every year, which allows us to kind of align on a vision strategy and a path and then to help us drive like better communication, help us track data points, we use the Entrepreneurial Operating System, EOS, which I’m sure a lot of small companies, lower middle market companies are knowledgeable of from the book Traction by Gino Wickman.
So the combination of those three things, has also allowed us to make the transition that we’re in now. Dad and I have always been 50/50 partners. 51% Dad, 49% Scott, and we’ve always been that way. But from an operational enrolled standpoint, it hasn’t been that way. We’ve always been business partners, which is also I think, a lot different than family businesses. Like I know, one of my buddies, similar age, third generation in a manufacturing company. He’s a plant manager there, but his dad won’t give them any equity. Or he won’t even allow his son to buy equity, or at least not yet and so when we bought into EPI 49% of that was me buying in with dad so we’ve been true business partners for 10 years, not just like dad certainly doesn’t believe in gifting at all, never has. He said, “Scott, you could polish my shoes, I’ll give you a quarter.” I think he actually, to be totally honest, would give me $2. He put $1 in savings account and gave me $1 to spend. That actually paid off, we all laughed at that. But at 36 years old, I literally have a savings account with that cash still sitting in there. But anyways, I think between like, just realizing and trying to relinquish control, really great communication and utilizing advisors and tools and resources to kind of power that. Again, easier, probably said than done in that five minute statement but that’s my advice and that’s kind of our journey.
Laurie Barkman:
That’s awesome. I was also thinking back to what you shared earlier with some of the challenges that you experienced, and then some ways that you’ve delved in as a new leader, as a new owner and congrats to you on the growth and success of EPI and its reputation globally. If we think about this episode as a time capsule, okay, and here you are, 36, talking to yourself 10 years from now, 20 years from now, when you go back and listen, what would you say to yourself, your future self?
Scott Snider:
I would say I hope we do like literally time capsules, and we could listen to it in 10 years. I think the biggest thing that I’ve learned even going back, like the past 10 years since I sold my company, like 11 years ago, 12 years ago, the biggest lesson I learned when selling my first company was, do not let your business define you. But one of the reasons I was wandering is because I was Scott the landscaper, I didn’t realize even at that time what I was passionate about was running a business. Whether it’s a professional education company, whether it’s a landscaping company, whether it’s anywhere in between some of the other companies that Dad and I own together today, it was really about the challenge of building and growing a company and working with people and driving great experiences. What I learned over the next 10 years is that you really do need to find your personal purpose and I know it sounds like you know me as people get to know me like I’m not like a cloudy kind of guy like I’m kind of like a meat and potatoes kind of guy.
I know this kind of sounds perhaps a little corny to some that might know me, and maybe I am softening up in my old age but I can tell you that over the last two years basically, through our pandemic, our whole team went through a program, transformational leadership program, that has changed my perspective on life as an owner, life as a father, life as a son, and friend, and anywhere in between. Literally was a life changer for me and so what I would say to myself in 10 years is, “Stay true to your purpose. Stay true to your core values and always communicate,” is what I would say.
Laurie Barkman:
The episode right before yours we had a great dialogue with my guest, Nicole Jansen. We talked about transformational leadership and so I love how these episodes just continue to provide value and so much great insight to owners. You’re talking to yourself in the future but the reality is you’re talking to business owners now and you’re also speaking to a network of advisers that are listening to the show and hopefully those insights will enable them to be better advisors for the man in the ring to quote one of the most popular quotes on this show, and I ask everyone for their favorite quote and I’m gonna ask you here in a moment, but that is the Man in the Arena. I think it was Teddy Roosevelt if I’m not mistaken, and it is the most quoted quote. It’s not easy to be the person on the ground.
Scott Snider:
It really isn’t. I think that yeah, Teddy Roosevelt. Actually it’s very interesting, we’re just talking about that because it’s Presidents Day, so the kids at the dinner table, we’re all talking about different presidents. They learned about George Washington and Abraham Lincoln but they didn’t know yet. They’re only in like first and second grade so they didn’t know who Teddy Roosevelt was yet but I’m a big national park guy, too, so Teddy Roosevelt founded the National Parks.
Laurie Barkman:
Yeah, absolutely. Wonderful conversation that we had today. Is there anything that I didn’t ask you that you’d like to share?
Scott Snider:
No, I don’t think so. I think that if you’re interested in stuff like this, I would say look into the value acceleration methodology. I’m probably biased because I’ve lived that life, my dad taught me value acceleration at 15. But if you’re an owner, I would say the value acceleration methodology will change your life. If you’re an advisor, I think the value acceleration methodology will connect you better to your owners and your fellow advisors.
Laurie Barkman:
Absolutely, and if people want to find you and find the organization, what’s a great way to get in touch?
Scott Snider:
I would say two things. I think most people are on LinkedIn these days certainly our advisor crowd. Scott Snider – just look me up on there, Snider with I-D-E-R. I share, frankly, free content almost every single day so we’re pretty active on there. Just look at that. Outside of that, if you’re interested in the methodology, owner or advisor, just go to earn CEPA (Certified Exit Planning Advisor), so earncepa, and you can navigate to all kinds of stuff, and different learning opportunities, and just honestly free stuff and everywhere in between.
Laurie Barkman:
Great resources, definitely encourage everyone to check it out, and so we finally come to the time when I ask you for your favorite quote. I know you probably have like a zillion, but what would be maybe the favorite to share?
Scott Snider:
I probably have two but I’m gonna pick one. It literally is so important to me that it hangs at the top of my stairs so when I walk up the stairs, my stairs go like that, so there’s a landing and when I walk upstairs, I see it every single day. My family does too and it’s honestly a quote that I’ve lived by probably since I was like 15, maybe even younger if you challenge my parents. It says, ‘Do not follow where the path may lead. Go instead where there is no path and leave a trail.”’ I think that that describes an entrepreneur’s journey for sure and whether you’re a business owner or not, I think challenging yourself to do something different. Do something a little scary to purposely grow. For anybody, I think following your own trail, at least in one aspect of your life, is critical, so that’s my favorite.
Laurie Barkman:
I love it. Scott, thank you so much for being on Succession Stories with me. It was really awesome to talk to you today.
Scott Snider:
Thank you. I appreciate it.
Laurie Barkman:
Listeners, thank you so much for tuning in. You can always catch Succession Stories on any of your favorite podcast players or YouTube. Don’t forget to like and subscribe to the show! If you want to maximize the value of your business and plan for future transition, reach out to me for a complimentary assessment at meetlauriebarkman.com. Tune in next week for more insights from transition to transaction. Until then…here’s to your success.
My objective is for you to have a lucrative and successful succession. If you want to understand the value of your company today, the potential net proceeds of a transaction, and your financial needs after you leave the business, that’s a great place to start. The sooner you understand these numbers, the more time you’ll have to close the gap, if there is one. Take the next step by requesting an initial meeting to begin planning for your business transition and strategic exit today. Request a call with me at meetlauriebarkman.com
