Why Businesses Should Think About Exit Planning with Holly Flores

We often hear the saying, “Begin with the end in mind.” However, no one would think of applying this when it comes to business. Thinking about the end is often overlooked that it becomes a problem. Statistically, 80% of business owners either do not transact at all or did not transact with the value they think they should have gotten. Holly Flores, president of the Rocky Mountain chapter of the Exit Planning Institute, talks about exit planning, succession, and why it’s important for businesses to take this in mind. She covers the EBITDA which stands for earnings before interest, taxes, and depreciation, as well as the valuation, the processes, transactions, sales options, and more.

Why Businesses Should Think About Exit Planning with Holly Flores

We have Holly Flores. She’s the President of the Rocky Mountain Chapter of the Exit Planning Institute. She is also a Certified Exit Planning Advisor. We’re very fortunate. Thanks for taking the time to come in.

It’s my pleasure. I’m excited to be here.

Holly, tell us a little bit about what you do with the Exit Planning Institute as well as what you do as a Certified Exit Planning Advisor?

I got to the Exit Planning Institute via my day job as a Value Advisor with Quantive where we do business valuation. Those business valuations are often a triggering point for Exit Planning. What Exit Planning is, some people think of it as a negative because exit, they think I’m coming near the end of my life, but it means succession planning in business. Exit Planning does not mean planning for an exit for tomorrow. It means planning for transitioning out of your business sometime down the road, whether it’s six months from now or five years from now. We often say you always want to start with the end in mind. We transfer that over into other parts of our life but when we run a business, sometimes we fail to have that conversation.

With the Exit Planning Institute, who has done a great job over the past five or so years, bringing that vocabulary to the forefront of advisors all across the country, I wanted to be part of it and see how I could integrate that into my business. From day-to-day, I may work with the business on determining their current value and maybe looking at that for a handful of reasons. First of all, for transaction, for litigation, for tax planning but often that conversation, when they see the value, all of a sudden, the light goes on. They see what it’s worth and they’re excited or they see what it’s worth then they’re a little disappointed and they start thinking about, “What does the path forward look like?”

We hear triggering event and we hear exit and succession and go, “I died.” That’s usually what you get. In going backwards a little bit, the statistics around Exit Planning, succession planning are pretty grim, aren’t they?

They are. Statistically, 80% of business owners either do not transact at all or do not transact at the value that they think they should have gotten. If you think about that, the opportunity that is out there for us to improve upon this is huge. It’s limitless, especially when you think about how many small businesses there are in every city in America. If you are an advisor working with business owners and you’re not having this conversation, then maybe there’s an opportunity that you’re missing as well as there was a part of me that thinks we’re failing as advisors if we don’t have that difficult conversation and say, “Have you thought about what’s next?”

Most business owners think they’re immortal.

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I think about that and for folks as well, I don’t have much sympathy for the business owner, but the next step past that is the number of people that are working for that particular small business. Most business owners think they’re immortal. So far 64,000 generations and nobody survived, so they aren’t that immortal. What happens when the business owner passes? What happens to the employees? What happens to their families? On that side of the table, it’s extremely important to go and have that conversation. What I thought was interesting is because the backstory too is I’m a certified exit planning advisor as well. I picked up the designation way after Holly, so she led the way. I think about the valuation commentary that you made where they think it’s worth X and maybe it’s worth some percentage lower of X than they thought. Can you talk a little bit about how Exit Planning helps that perception?

We call that filling the gap. To be honest, most business owners think their business is going to be worth at least five times what it is worth. That may be from hearing what other people sold it for misperception. A lot of times people will hear about this multiple and you don’t necessarily know, is that multiple revenues, multiple of net profit, it can be of so many different things. It’s best to have somewhat a third party person come in, take a look at it and give you that idea. What goes into the valuation is seeing where the market data is. Where have other businesses that are like that business sold?

You mentioned a term that many may not know EBITDA. What is EBITDA?

EBITDA is earnings before interest, taxes and depreciation. A lot of businesses don’t look at it. The best thing maybe to say for small business owners to look at the net profit and see where the business is at or the seller’s discretionary income. What the business owner takes home plus any other expenses that are not necessarily associated with running the business.

You mean my racehorse in my business is not part of that?

Maybe. If your racehorse is getting you to your clients, then that might be legit. If the next person that takes it over is going to need that horse, but probably not in Colorado Springs.

As I think about the Exit Planning Institute and the chapter here locally, you have events on a monthly basis. What are the types of things that you talk about in the monthly meetings?

We started the Chapter early in 2018. To give you a little bit of a backstory on it. Surprisingly that’s all we’ve been around even though Exit Planning, one of the other competitors, but we are all in it together. Major Exit Planning Institutes in the country are based out of Denver. We’re the first chapter to come there. Our chapter, the focus is, it’s all about collaboration and education. To be a member of the chapter, you do not have to be paying dues or have a membership fee. What we want to do is attract people to collaborate.

If by doing this you decide that you want to go get your Exit Planning certificate, then fantastic. More importantly we’re coming together, advisors all along the spectrum. From the beginning of a transaction where you’ve got a valuation person or you also may have a financial advisor that’s talking to them and wants to take a look at, “What is your business worth it?” If this is what you think is a big part of your asset allocation and you’re going to retire with this one day, maybe that’s the discussion that starts that. Then you go on down the process, you have accountants in there, you’ve got attorneys in there, investment bankers, private equity funds. We also have some neat and specialized people that maybe work on the psychology of a transaction or they’re part of a community foundation. Community foundation is important because a lot of times when people are planning what to do with their wealth as it happens, they may want to be in touch with the foundation and have those.

We all come together, all these different groups and entities and we have different discussions from the big picture, talking exit planning. We talked about buy and sell agreements. We’ll talk about due diligence and we have a special program with business owners who will be on the panel and they’re going to talk about what went right and what went wrong and how they were ready and the things that they wish they did better.

These are the business owners that have already sold their business?

Correct, which is a little bit of a challenge to find business owners that sold that are willing to be on a panel. Typically, they’re far enough away where they’re beyond any agreements and maybe the emotional pieces have passed them a little bit and we’ve got some great panelists lined up. It’s going to be a great discussion.

Exit Planning: Exit Planning does not mean planning for an exit tomorrow. It means planning for transitioning out of your business sometime down the road.

One of the things that struck me after finishing the certification is the differentials between an average company in your industry versus below average, best in class, the multiple differentials and the income gap or the revenue gap. Can you touch on that a little bit?

When we do an evaluation and everyone wants something for free a little bit and you have those free advice, what’s the rule of thumb of where my type of business would sell? What are the multiple times the seller’s discretionary income? The range that will say on average for a midmarket company could be anywhere from four to seven times.

What is a mid-market company?

A mid-market company would be a business with revenue anywhere from $20 million to $100 million. Anywhere from four to seven times, these numbers they are a range that I’m saying even on a midmarket company. A company could be smaller, but they’ve got great earnings so maybe that push them more into the middle market or lower-middle market. Just take that four to seven times their earnings. That swing can be a 70% difference. Whether you are at the bottom of that four times or you’re the best in class and you’re seven times, it’s broad. Without digging in to what is going on in your company through the financials, you don’t know where in there you may be. By starting out with a valuation and seeing that triggering event, this is where I am.

Triggering event is what?

Knowing where you stand and where you are right now triggers further discussion.

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Triggering event is one of those things that starts the conversation. In my mind, knowing where you stand, where you are right now, triggers further discussion. From there, you can start to come up with a strategy and strategy could be, “I know where we’re at. I know I’ve got three years or four years to influence this and I want to improve the value,” or it could be, “I know where I’m at. I know I don’t have that much time, so let’s get on the market.” Whatever it may be, it’s starting the conversation. In order to do that, you’ve got to know where you’re standing.

For a lot of folks, they don’t consider that the business sale may not be an elective event for them. It may not be that you pass away, it could be that you’re disabled, it could be that there’s a family event, it could be that there’s a disagreement that’s not possible to get over. The thing that struck me the most about going through the process, I don’t remember who said that basically this type of process is good business. If you step out of the business as the operator and you step into the shoes of a potential acquirer, you look at your business differently. Maybe you could touch on a little bit about the eyes of a potential acquirer and the things that are important to a potential purchaser in a business.

It was Chris Snider who is the President of the Exit Planning Institute who said, “Exit strategy makes good business strategy,” and that is true. As you take a look at it and when we say value, there are three things that are going to drive the value of a business. You’re going to have your earnings, you’re going to take a look at your risk and you’re going to take a look at your growth potential. Earnings, that’s money coming in the door. It’s managing your expenses and that’s going to impact value. From an outside buyer, a third party comes in to look at purchasing your business, the other two pieces of that will hold even more important because you want to take a look at risk. How saturated are they on their clients? They’ve got to clients that make up 80% of their revenue. If I come in there, what is the likelihood that I’ll be able to keep these two clients? That’s significant.

The other piece is growth. If you are in a mature market, a mature industry and someone from the outside is coming in and they’re like, “You guys have done well,” but is there room to take it further? I did an evaluation of the company and the business owner thought, “This could go big,” but they were pretty much at a negative net operating profit. They were running the business as a lifestyle business, which means they were taking money out of it and they live a good life. In terms of presenting a package that made it look great to announce that buyer, it wasn’t there. They thought, “An outside buyer could look at this and if they did these five things, it would be worth so much money.” Maybe that’s true, but that’s up to the sweat equity of a potential buyer. That’s not what you’re doing right now. If you would like to harvest that potential, as the current owner, as the seller if you want to harvest it, that’s something you’ve got to be able to put into it.

I thought one of the things too as a lot of folks think about, “I have to do this to see if I’m going to sell my business.” What if you go through the valuation and the process and you look at that and you go, “You’re doing a great job, your numbers are great and you’re best in class, maybe you should be looking at acquiring other companies.” Maybe there’s some mileage to talk about there.

A lot of times we’re working with small and main street businesses and having an outside person come in, on a small business, main street business, those business owners are so busy running their business on a day-to-day. They need a third party that comes in, helps them lift their head up a little bit and see what’s going well, see what things they can change and adjust, sometimes as you said they think, “There’s a reason why I started this business.” They start to have fun again and maybe get a little bit of energy to keep it going for a future sale. There’s that piece. There are plenty of other reasons why people will transition out of the business. It’s not always a transaction, that’s what you hope for. As you’re planning a strategy, you get to have strategy so that you’re ready if death, divorce, disability and all of those things happen. Taking these steps to grow that value helps minimize risks, so the business is prepared.

What if I’m that business owner who goes, “I’m not worried about that stuff. I’m going to hand my business to my kids?”

There are plenty of other reasons why people will transition out of the business. It’s not always at a transaction.

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That’s maybe less frequent these days because there’s a visual. We’re very aware that the next generation is not as interested in mom and dad’s stuff. Even if you thought you were going to hand it off to your number two guy, but you kept it a secret, that secret might catch not that person by surprise, but you by surprise when you find out, “I had no plans of this nor do I have the money to buy you out and for you to get that payday that you were planning on.” One of the mistakes that business owners make, and I say mistake cautiously, is they keep the conversation secret. Back in my college days, we have to write down our goals on a 3×5 card and put it out.

I’d be remiss if we didn’t say what college you went to.

At West Point, we had our cards at the beginning of each semester and our cards were posted right above our desk, which are our goals for the semester. I think it’s 95% of the people that don’t write their goals down. They might end up somewhere. Same thing with your business, if that goal exists that you want to do something but you’re not communicating it with anyone, the likelihood of you going down that path might stay in your head and it may shift directions. To say that you’re going to sell your business one day, it’s not rocket science. You are or you plan to leave it one day. As you start to communicate that, you might be doing yourself a favor not to mention everyone else. The people that are running the business, they may all of a sudden start to think about, “How can I be a part of that?”

If you’re 70 or 75 years old, your employees know you have an exit plan one way or another.

Or they’re worried that you don’t.

For the business owners that are in the audience, how do they find you?

They can find me at our website, www.GoQuantive.com or social media, Holly Flores, PMP, CEPA.

For the business owners past social media, if they reach out to you, what should they expect if you come to see them in when you walk through the door?

To have a conversation. First and foremost, it comes down to having a conversation and answering some difficult questions. One of the key things that our EPI chapter is we try to get beyond focusing on a transaction that’s, “I want to sell. I’m looking for this pay day.” There are so many other pieces that go into it. The most important thing is that initial conversation, understanding what’s important to you, who else would be a part of this conversation, should your family be part of this conversation, should your business partner, should your employees be part of the conversation? It’s a process.

We talked to business owners after we do an evaluation when we say, “You can grow the value of your business because you don’t have a marketing plan in place. We help businesses put processes in place.” This whole thing is a process. If you’re an advisor on one of those pieces and all you do is see your piece, you’re not helping your client see the opportunity or the risks and all the shortfalls that could happen along the way. You’ve got to treat it as a process and be ready for more conversation, more talk up front to make it smoother along the way.

For the business owner going like, “This is overwhelming.” You get paralyzed with, “I’ve got to have this person.” Typically, statistics suggest a CPA is the typical advisor. Maybe you could touch a little bit on a makeup of a team and then how the coordination of that team occurs.

At the Exit Planning Institute, we do a survey called the Owner Readiness Survey. We asked the owners who was their most trusted advisor and often it is the CPA. When a business owner is picking that person to be their Exit Planning quarterback, but that is cliché, but the center of it all to help coordinate all these different things because it is overwhelming and it could be a several-year process. You want to find that person that you feel most comfortable having a conversation and that person is also comfortable coordinating with your attorney. Maybe your business attorney, but when you do a transaction and maybe a transaction attorney.

You don’t want to limit who is in the team. Other people on the team will be the people that I said attend our EPI meetings. You’re going to have your accountant and your accountant may be the person that does your taxes and you also may have your bookkeeper. It may be covering both sides who’s touching the business on a regular basis. Your financial advisor is a great person to bring in there because they may see bigger on what strategies would be important and this also ties back into your tax strategies for when a sale happens. How are you going to receive those funds? Even determining what your goal is down the road. Maybe you already sat down with your financial advisor, you did your financial plan and you know your number that you want to retire with. Another great reason to have the financial advisor there. Ultimately, choosing that person that is on that team is up to the business owner. There’s not a set profession. I would say one of the most important things is finding a person that is not afraid to talk to the others on the team. We’ve all worked with advisors that want to be all things. As a business owner, you can’t be all things.

Exit Planning: If you step out of the business as the operator and into the shoes of a potential acquirer, you’ll look at your business differently.

I was thinking as you were chatting, let say that you have a particularly unusual company. You have some intellectual property and you go, “We know how to do this that nobody else does.” “Have you protected it?” If you haven’t then you go maybe a step in the planning processes to get counsel on how you take in and protect a key component of what somebody may view is the valuation of your business. For the business owner that’s going, “This is like sipping from a fire hose.” Can they attend an Exit Planning chapter meeting?

I always recommend it because it is overwhelming. You may talk to five advisors who will tell you five different things and you’re like, “I don’t know which way to go.” As a result, you procrastinate the process or procrastinate the discussion. Going to a chapter meeting and seeing it all interact together and seeing the dynamic is important. Even for us as advisors or exit planners, the chapter helps us assess each other’s skills, comfort level and what advisors may work best with certain types of businesses. I would say there’s an art to it. You can’t say, “These are the five people you need on your exit planning advisory team,” because every business is different. You may have some unique intellectual piece that you have never done anything to protect that intellectual property, but that may also be something that’s so far off in that field and doesn’t apply. Taking it one step at a time, bringing in the right people, the right part of the conversation and making sure people are okay with their role.

I think about every business, “You don’t understand my business because it’s a family business and we have dynamics within the family.” It could be for a second, third generation and so on. As much as that may be unique to that business owner, it’s certainly not unique in the sale of a business. When you run into a business owner that may have some challenges within the family, what type of resources would you do as an exit planner?

Family businesses are becoming more and more of a rare and special entity that’s out there. The numbers incredibly dropped down statistically that are able to transfer to a third generation. There are specific advisors that specialize in family assets, from a financial standpoint, psychology standpoint that is 100% focused on the family dynamic and understanding Jimmy may be the best suited to run the business, but he has no interest. How are we going to allow him to continue on and go to med school and move away from the business? You’ve got the other family that you don’t trust running the business. What is that conversation? I can say with confidence that I’m not skilled at that unique dynamic. At that point, if I were working with a client that has that family dynamic like that, I can facilitate the conversation and I can facilitate bringing in the person that is specialized.

One of the mistakes business owners make is they keep the conversation secret.

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I see that monthly meeting in the exit planning chapter is like a toolbox. For the various advisors, there may be a valuation person or there may be an attorney that says, “I need somebody with a specialized skill set.” For the business owner that’s trying to maximize the value upon sale, there are also specific people to bring on board to take and go, “This is how other people see this. We want to take and make sure there’s a lot of people interested in your business, so you create a good auction process.” I think about this is such a critical component because I don’t know what percentage of the population of the US is employed by the small business, but it’s extraordinary.

It’s a huge part of our economy.

Simple steps to try to take and help the next generation also can help the business owner that has work so hard. It’s incredibly important, and at a minimum they should at least reach out and give you a call to talk to you about this process. If they want to take and come to any of the chapter meetings, reach out and be glad to sponsor them and nobody will point them out. They just come.

We will be putting this out on LinkedIn and Twitter when we have the business owners on the panel. Every one of our meetings, it’s so important to educate the advisors as well as the business owners because there are two pieces to it. A lot of advisors will try to be all things to their client. They may have worked with that owner for twenty years as their business attorney, but they don’t have the background in doing transactions. The owner, they loved their attorney and they feel that commitment and they don’t want that loyalty, it’s okay to have two attorneys. The attorney can figure it out because ultimately, what works for everyone is if the business sells successfully. If you have the wrong attorney in that job, it may not sell successfully. Something could go wrong and the deal could blow up at the last minute because of that loyalty and you are afraid to walk away from that. I say walk away, move away for that transaction.

What is the statistic? Is it 80%? If you have an expectation of a price and you get ready to sell and you get some offer that is less than the price because of some factor you were surprised by. I have two clients that I’m the only salesman or I have no contract or my contract is all expired and you look at that and it’s not surprising that the business doesn’t sell. The business owner has all the energy put into the process, you go, “I’m not doing this again.”

Another reason why poor expectation, they may have sat with a business broker that said, “We’re going to sell your business.” The business broker knew the price that the owner wanted to get and they ended up pricing at that point. It was not a realistic price point. It’s not a matter of someone being unethical. There are other things that influence our decisions as advisors and we may have missed or that person may have missed that glaring fact that was out there that you price yourself out of a sale. Taking a step back, having those conversations with different advisors. Sometimes, I take it for granted. I don’t know if you do. I feel like everyone knows all the financial advisors in town, all the attorneys in town because we interact with them on such a regular basis. A business owner who only has their head down making operations happen, they know the people that are in their world. Getting connected to an exit planner or going to an EPI meeting or whatever the case may be, it will open up your eyes and it will create the opportunity for a different discussion.

For many of the business owners, they don’t know what their sale options are. They may say, “I think of a cash offer.” I don’t think cash offers are necessarily all that consistent in that you could have earn now or you could have a number of different exit options and that may fit your plan, and so just being aware of the options matter.

There are a lot of different types of buyers. You’ve got a strategic buyer, which in theory is the guy down the street. They may want to buy you out to expand his business or someone that left Corporate America and they’re looking to become a small business owner and you’ve got financial buyers. Right now, there are a lot of financial buyers and those financial buyers, maybe private equity groups. We used to only see private equity groups on a bigger scale. Now, private equity groups are buying main street businesses. They’re looking for companies that maybe have about a million in revenue.

For that business owner, he goes, “What does it take to qualify to fit in the parameters of a private equity group?” A lot of times it seems like it’s a mystery, but it would be nice if you have somebody in the valuation space or the exit planning spaces that says, “I’ve done a number of these. This is typically what we see. These are your good points and these are the shortfalls and this is what you can do to move your numbers.”

It’s having a conversation.

With having a conversation now, I get to take in and quiz you to death. For you, an influential book that’s altered your thoughts on how you do what you do now that you’ve read lately?

Family businesses are becoming more and more rare and of special entity out there.

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I am a business book junkie and by junkie, I tend to grab them, I don’t always finish them. I’ll admit that. I don’t read them, I listen to them, which may be why I can lose interest. We normally grab a book that’s trying to speak to us at any given time. The book that I’m going to tell you, when I listen to it, it didn’t necessarily speak to me at that moment and it was the importance of moments or making the moments and it is very significant to me. I have the exact title of my book. I’m going to get it for you. It took that thought process into the workplace.

A lot of times when you’re having a conversation with a customer, someone comes into a store, the transaction happens then you go about your way. On the flip side of that, turn it upside down, that’s the one time that that customer is going to interact with someone at your store if you made that a moment for them, that they put a lot of thought into their purchase. It may be in ten seconds, but you made a moment of it, it makes it memorable that they’ll come back for more. It’s the same thing when you engage your employees. Every day, there should be some type of moment. You can’t make everything in your life at an important moment.

I go back to one point early on in my army career that I’ve learned this lesson. I was young. I’m high energy. I’m from the northeast and I like to get things done. Sometimes I don’t take time for chitchat. At this moment, there was a transaction that needs to happen. It was totally just business. A gentleman that worked for me set up the meeting. They came in, I got right to the point. I said, “Let’s make this happen.” I thought everything was good. We were eye to eye and about 30 minutes later, the gentleman that worked for me came in and I said, “It went okay, everything will go forward.” He said, “No.” He was disappointed. I didn’t even offer him a cup of coffee. I didn’t take the conversation very far.

For me, I can remember in particular, I was down range with a General Officer. We go to this training site and he bypassed all the officers, all the NCOs and found the lowest ranking soldier he could find. He says, “What are you here to learn now? What’s your uniform now? When’s the last time you had a warm meal?” You know that Private will probably talk about the General coming down to talk to him for the rest of his life.

The movie, Glengarry, “Coffee’s for closers.” Now, I say the opposite. You don’t get to closing unless you have coffee.

Exit Planning: To say that you’re going to sell your business one day is not rocket science. Of course you plan to leave it one day.

That goes further down the road with the technology and all the auto responders and all the stuff that goes on in electronic media. There’s some value to be had in the old face-to-face. That’s why all the podcasts are done face-to-face because I can see what I can’t hear, you get a connection and that’s important. With that said, in the past, I know that you’ve probably had zero failures in your past, but maybe one that sets you up for future achievement and why?

That is a vulnerable question to ask. I feel that I fail at least ten times a day, every day. I still struggle to see which failures have lifted me up. There’s something in me that makes me keep on going and I am positive that it was a failure along the way that had become oblivious. Short-term memory maybe is poor that I failed at that, that I forgot what I failed at yesterday, so tomorrow I wake up and I do it again. There’s something that’s insanity that goes along with that. I definitely know that I get rejected. That’s what it would be. I get rejection often, whether it’s presenting your business or rejection may be coming in the form of not getting the business. It’s not a no but you didn’t get a yes either. Yet, I still wake up the next day and I stay at it.

We normally grab a book that’s trying to speak to us at any given time.

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If you could take and put an ad out on the local business paper talking about the message of Exit Planning and what you do in this chapter, what would it say and why?

The bottom line on that is the message would be, “Start the conversation.” A woman I spoke with, she said, “Holly, I’ve had the conversation on exit planning. You hear it all the time. Our exit plan has been different probably every year for the past five years.” I would argue that maybe it was different because you never had a long conversation about it and you didn’t go down with the path. You just came up with, “This is what we want.” That’s okay but it’s temporary. Without going through the painstaking conversation, you may not understand why it is that you want to sell at this price point.

I still think that the business owner doesn’t recognize the potential cashflow benefit of doing exit planning along the way. One, it improves your bottom line if you start doing best practices in place, which your potential buyers are looking for. Two, if you’re below average and you want to get to average or above average, what that does to your earnings? Better practices, better sales, and a diversified customer base and it’s a misconception.

It’s also an expense. The thing that’s a reality is as a small business owner, you’ve got every advisor, consultant, technology software, anything you can think of coming at you and say, “Spend money here. We are the best and we will help give you an ROI.” All of these different things coming at you, how do you take it one step at a time? There’s not an easy answer to that, but yet there is a return on it and sometimes if you take it one advisor at a time. With that one advisor come up with, “How do we continue this conversation over the next few years?” You see that there’s more work that needs to be done and you say, “In order for me to increase value, I need to sell more. Let’s talk about how we’re going to grow sales and that’s our investment.”

It could be they have a contract too. Instead of one year, I want to take my contracts to five years, which is more attractive.

That minimizes risks and all that’s good. Having those outside eyes and making the investment in a consultant, sometimes that consultant is going to push you to do what you already know that you need to do.

Exit Planning: If you have the wrong attorney in that job, your business may not sell successfully.

Looking at what you’re doing, best allocation of time or initiative that’s helped you most with what you’re doing?

For me, the best allocation of time is getting out there. In a prior role, I was out running an operation. We call it management by walking around and in the military, I have always done that. No matter what size, when you’re in financial services, you’re out in the community. In general, if you’re not out talking to people and connecting to people, if you’re sitting behind a desk and reading, which don’t get me wrong, we always need to grow professionally, but if you’re not connecting, then you were going to miss the point of why we’re doing what we’re doing. No matter what industry you’re in, being out and being seen, whether it’s your clients or your employees, you need to be out.

For you, unusual habit or what others may consider out of the ordinary that’s helped you the most.

I don’t think I have any unusual habits. I run and that’s probably the thing that helps me keep sanity a bit because for all the other reasons why I lose my sanity. I run and during the summer, my big exciting race is it’s called the Pikes Peak Triple Crown. It starts out with a ten-mile race in Garden of the Gods, which is not a flat race by any means. It is hard to mile run. The second race is called the Stampede. This year that race is run out of Cheyenne Mountain State Park, which was also brutal in July, thirteen miles and then it concludes with a race up to Pikes Peak. That’s thirteen miles and you start at 7,000 feet in elevation and you finish at 14,110 feet of elevation. There is a little bit of a crazy high because it does not feel good and whenever I do it, I think, “I’m not doing it next year or next year, I swear I’m going to train.” Then that moment comes and I say, “If I never get to train, I’m so lucky to be able to have this opportunity to do it.” It’s fun.

Every day, there should be some type of moment.

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Over the past few years, what belief or protocol have you established that most impacted you or the company?

Over the past few years, I’ve had a lot of geographic change for professional shifts I would say. I was living in Alaska, I came back to Colorado and sometimes when you shift, it’s easy to allow life to stop and maybe you shouldn’t allow it to stop. I’m not very good at that. One of the things that I’ve done like being out and being seen, it’s important to always keep moving. For me, that has been significant that because you go through a significant change business-wise, personally, when you stop and you allow the ground to settle under your feet, sometimes it’s harder to get moving again.

For you, with all the experience that you have working with businesses, what advice would you offer to that new CEO about exit planning if you were to talk to them for the first time?

The corny saying that you’ve mentioned, that Chris Snider says, Chris may not be the one to coin the phrase but, “Exit strategy makes good business strategy,” and I think that as a business owner. I have another government contracting company that we have started over the course at the beginning of the year. As we’re looking at the horizon, I’m trying to heed my own advice and saying, “What is the exit strategy?” Exit strategy will evolve, but there are those pointed setting goals and if you don’t have a direction where you’re trying to take it, then it makes it very difficult for you as a leader, as well as for the people that you hire. Having an exit strategy essentially creates a vision and it creates purpose. It’s smart.

Most common misconceptions about your role in the exit planning space?

Often with advisors and many of us along this process, you can pick up a book about exit planning, I can pick up a book about being a financial advisor, investing in your own portfolio, doing all of it, it all sounds easy. A synonymous conception is, “I think it is easy in theory, but it’s difficult to execute.” For advisors to remember that, that nothing that we do is difficult. Business is common sense. If it were common sense that we were following and listening to, we would not have 80% of the businesses fail to transact. The misconception is that, “I can do it,” the do-it-yourselfers because it takes resilience, it takes effort, it is a nonstop push. Business owners as well as other advisors that say, “I do exit planning. I’ve worked with my clients on it,” it is a very concerted push.

Exit Planning: When you stop and allow the ground to settle under your feet, sometimes it’s harder to get moving again.

Just because it is simple, doesn’t mean it’s easy. Looking back over the past few years, what should you have said no to and why?

I’m not very good at saying no. I say yes to pretty much everything because I take it as a challenge and I’m not a type A person that says, “I can do it. I can make it happen.” I did have one nonprofit that I was excited to be a part of. Basically, it would have been similar to the Exit Planning Institute, running a chapter locally. The leader located in a different city wanted to be very directive on how we communicated to the chapter, what time we met, what things we said. There was a part of me that wanted to challenge her and talk to her about her leadership style and say, “This is not an effective way to lead, especially when you’re leading people that are probably leaders.” I started to go down that road and then eventually I did disengage and removed myself. It was probably a little more heartache than I needed to add to the list.

On the day-to-day operation of what you do, what’s the personal habit or self-talk that keeps you going?

Start the conversation.

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The things that you have to tell yourself every day. I have a handful of different ones. The most basic one that I’ve always said back to my Plebe year as a Cadet at West Point said, “If this is easy, everyone would do it.” I genuinely say that every day. My kids, it is part of their anthem. They know that that’s what I’m going to say to them. On those days when I got to look yourself in the mirror and you’re not sure if you want to keep going or maybe I picked the wrong way, I know that the fact that it’s hard makes it worthwhile. Blue Ocean Shift and the newer book, that is another book that I’ve read. Again just remembering that the opportunity out there is so vast and so big and it’s about taking it.

Quote that you find meaningful or you use frequently?

You said something to me when you first met me about my size and the quote passed to me from my husband is, “It’s not the size of the dog in the fight. It’s the size of the fight in the dog.” I’m a believer in that. I’ve got a lot of fight in me.

I wouldn’t say that my perception of you is that you’re a small person. You’re diminutive and petite. How’s that?

That’s fine. I’m not sensitive about it.

With that being said, Holly, if I was to talk to some of your colleagues and ask them, what are you best at, what would they say and how do you utilize that on a daily basis?

Most people would say high energy is the thing that I’m best at and what I’m remembered for. I use that on a daily basis in my engagement with people. My energy is what sets me apart from others.

Holly, I can’t tell you how much I appreciate you coming in. This has been a lot of fun.

Thanks, Bob. I’m happy to be here. Until next time.

Links Mentioned:

Exit Planning Institute
Quantive
www.GoQuantive.com
Holly Flores, PMP, CEPA on LinkedIn
Exit Planning Institute on LinkedIn
Exit Planning Institute on Twitter
Blue Ocean Shift
http://Exit-Planning-Institute.org/chapter/epi-rocky-mountain-chapter/

About Holly Flores

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