John Brown is the Founder of Business Enterprise Institute (BEI). He continues to be involved with BEI and speaks to groups of advisors and business owners across the country. Jared Johnson is the CEO of BEI, managing its day to day operations.
BEI is a membership organization that trains and supports business advisors to be the preeminent Exit Planning resources for business owners in their communities. Our members ultimately seek to help business owners and their families benefit from their lives' work.
In this interview, John, as the founder, shares how BEI Exit Planning was founded and its mission in the beginning. Jared, as the CEO, shows us how he manages BEI processes and how he deals with disappointed clients.
John's advice for entrepreneurs starting a business:
Give thought to where you want to be and where you want your business to be in five, ten and twenty years. Put your goals in writing. Continue to define and refine them over time. Use outside resources—mentors, advisors, friendly competitors. Start delegating as soon as you can. Get out of the office periodically to think, ponder, dream and re-pot.
Can you tell us a little bit about yourself, John, and how you got the idea for BEI?
I’m from a family of business owners. I saw my parents, Harold and Helen Brown, work 12-hour days, six days a week. These slackers rested on the seventh day—working only 8 hours at the store.
When they retired they sold the business to their key employee for a promissory note. Within a year the note was mostly unpaid and the store was shuttered. My parents received a total of three monthly payments on a ten-year note—their total return for 25 years of unending toil. Thank God I didn’t accept my Dad’s offer to take over the business! Instead, I went to law school.
As an attorney, I saw the same pattern of owners working to the point of burnout. Few took advantage of the value they had built in their businesses to benefit from their lives’ work. They didn’t prepare themselves or their businesses for the best possible exits. I wanted to help these owners so they didn’t end up like my parents.
What makes BEI unique from others John? How did you find your competitive advantage?
In the first dozen years of working with owners, I quickly realized they were smart, hard-working, and dedicated to their businesses, employees, and customers—just like my parents. I also realized they had no plan to benefit from their lives’ work—just like my parents.
I started to try to help them. In the next 20 years of my career, I developed, with the help of many others, a process owners and their advisors could use to develop and implement plans that allowed them to exit their businesses when they wanted, for the money they needed and in the hands of the person(s) they chose. I called this “Exit Planning.” I don’t believe this term was commonly used before then.
As a result, my law firm developed a reputation—a brand—as the firm that represented successful business owners. It proved very successful.
But, of course, I wasn’t satisfied. Once I discovered the tremendous advantages of using our Exit Planning Process, I wanted to help owners everywhere. I began writing. First it was a newspaper column, white papers and a book.
Then another book, more white papers, a bi-monthly newsletter. At this point, I’ve written a third book and I blog for my company and for Forbes.com. I’ve criss-crossed North America speaking to owners and their advisors about Exit Planning.
I founded BEI, an Exit Planning business that supports its member advisors (CPAs, attorneys, financial planners and wealth advisors, insurance professionals, M&A advisors, valuation professionals, etc.) in North America, with a few inroads in Europe and Asia.
Support to us means offering hundreds of hours of education and training, Exit Plan design advice, marketing and engagement tools, Exit Plan creation software designed and maintained by our IT department, and extensive networking with our other members.
BEI’s competitive advantage is pretty straightforward: no other organization in the world provides the expertise or has the knowledge and the tools to support advisors, and through them, business owners, in the Exit Planning and implementation process. Our members create thousands of written Exit Plans every year.
What are your visions for your business Jonh? Where do you see it in the next 5 years?
We are just getting started. We are passionate about our mission of “helping owners benefit from their lives’ work,” our members and our process. In 2017, we will take our first substantive steps to become fully international in reach.
We are committed to having our certification (CExP™) be recognized as the gold standard and Exit Planning itself recognized as a professional discipline much like financial planning or accounting.
What attitude/habits helped make you successful while starting BEI?
I wasn’t handicapped by knowledge. I didn’t have to think “outside the box” because there was no box! Exit planning was a completely new concept. That allowed me to experiment, fail, revise the experiment, perhaps fail a bit less often, repeat. BEI’s management team still acts this way today: we continue to embrace a willingness to fail.
I have always, even from my early days of being a lawyer, sought to delegate pretty much everything work-related. As a result, BEI is a company led not by me, but by capable leaders and managers. Having worked with thousands of businesses over the years, I know that one of the primary obstacles to rapid growth is the owner’s refusal to change his or her role. Eventually that resistance acts as a drag on the company; it stagnates or even declines.
What was your biggest business mistake and how did you come out stronger at the end of the day?
For me, it was remaining as a partner in the law firm I co-founded far too long. My passion wasn’t there. Far sooner I should have followed my instincts and the advice I gave others to create an exit plan and execute it!
What are some of the biggest obstacles that you have encountered as an entrepreneur?
Not knowing what I don’t know. Understanding how both the owner and management must evolve. When either becomes an obstacle, they must change or be replaced.
Have you ever gotten a disappointed client or customer Jared? If so, how did you handle the situation?
As a leader of a business, I think we all hope that every one of our clients is thrilled with our services and products or sees the opportunity and potential for success in the same manner we do. Unfortunately, this isn’t always the case.
In our business when we find a disappointed client, it is almost always due to a misalignment of expectations or a miscommunication. I always start with understanding what the client was expecting and trying to root out what went wrong.
Once I understand their expectations on what they were hoping to accomplish, I begin with taking ownership of any issues we may have miscommunicated or missed altogether. No client wants to hear excuses. They want to know that you understand the issues on the table and are going to do what you need to make it right.
This does not mean that you need to change your business to fit their needs but rather to work together to find the right solution for both parties. Sometimes it means you have to end the business relationship. Where I find many small businesses get into trouble is trying to be all things to all people. Understand what you do well and who you serve. Serve those clients and focus on providing those services.
Your days no doubt can be pretty crazy Jared. What one thing would you say motivates you to keep pushing forward?
I don’t want to diminish the role my family, my 3 sons and amazing wife, plays in my motivation to do what I do every day, but the one thing that keeps me pushing forward is my team. I am driven every day by the people surrounding me.
I love watching them push themselves and each other to places they didn’t know were possible. I am passionate about people. I get more excited about what our business does for the team than I am about what it does for our clients; and I am really excited about what it does for our clients.
What was the best piece of advice you have ever gotten from another business owner or someone you admired John?
The smartest person I know, if only through his writing, is Peter Drucker. One of my favorite pieces of advice comes from his list of requirements for entrepreneurial management because it provides the key to unlocking business growth. “It requires . . . building a top management team long before the new venture actually needs one and long before it can actually afford one.” (The Essential Drucker, page 145).
What advice would you give to our readers who want to start a business in Colorado John? Where should they start?
- Give thought to where you want to be and where you want your business to be in five, ten and twenty years.
- Put your goals in writing. Continue to define and refine them over time. Describe, in writing (always in writing!) how you intend to accomplish them and the resources (expertise, money, and time) you will need.
- Use outside resources—mentors, advisors, friendly competitors. You will be amazed at how little you know and how much others can help.
- Start delegating as soon as you can. The only way to grow and maintain a great business is to have great management, preferably management who are better at their jobs than you are.
- Get out of the office periodically to think, ponder, dream and re-pot.