"Exit Planning" w/ Ashley Micciche 252


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In today’s podcast episode Jim and Tyson dive into exit planning with Ashley Micciche.

Ashley Micciche is the CEO of True North Retirement Advisors, an independent financial advisory firm managing over $250 million in client assets, and located just outside of Portland, Oregon. She specializes in designing, building, and implementing custom-designed exit plans to help her business owner clients secure their final and most important business decision - the exit from their business.

6:35 getting started with exit planning
9:17 valuing your law firm
17:26 begin with end in mind
20:23 when you know you should have a plan, but you don’t yet
22:55 The One-Minute Retirement Tip Podcast

Jim’s Hack: Jim has found by putting all their meetings on Monday’s it has lessened the interruptions throughout the rest of the week.

Ashley’s Tip: Find out what your business is worth - www.truenorthra.com/valuemybusiness

Tyson’s Tip: Post your office hours on your door so team members know the hours they can come talk to you.

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Run your law firm the right way.

This is The Maximum Lawyer Podcast.

Your hosts, Jim Hacking and Tyson Mutrux.

Let's partner up and maximize your firm.

Welcome to the show.


Jim: Welcome back to The Maximum Lawyer Podcast. I'm Jim Hacking.

Tyson: And I'm Tyson Mutrux. Good morning, Jimmy?

Jim: Tyson, my friend. How are you?

Tyson: I am doing well. Other than the rain, delaying things at the pool, things are going well. How about you? 

Jim: We've been getting a ton of rain. And I think it's supposed to rain all week.

Tyson: It definitely is. Well, it's weird. You know how it is. Like, lately, they will tell you it's going to rain all week and then it rains like twice, or once, or not at all. It's kind of a moving target.

Jim: Well, let me go ahead and introduce our guest today. I'm really excited to have her on the show. She covers a topic that we've been talking about off and on both in the Guild and in big group. Her name is Ashley Micciche. Ashley is the co--owner and the CEO of an outfit called the True North Retirement Advisors. They help businesses plan for exit strategies. And so, she's on lots of podcasts. She has a podcast of her own. I think I'll let her tell you the name of it and about it. 

Ashley, welcome to the show.

Ashley: Thank you, Tyson and Jim. It's great to be here.

Tyson: So, Ashley, tell us about your journey and how you got to today, I guess. I'm curious, there's a part of your bio, that's really interesting to me, how you are a four-time humorous speech champion. So, tell us about your journey. I want to hear about that as well.

Ashley: Yeah. So, actually, I love working with business owners and I found that out very early on in my career. I started as sort of a generalist financial advisor, right out of college, when I was 22. My very first client was more than 50 years older than me, so it was weird giving financial advice to somebody when you're 22 years old and they're in their 70s. But I've always loved working with business owners.

And I actually started my first business when I was eight years old. And I think it's just sort of been in my blood. And it was actually a pretty successful business, given the fact that I was eight. But if you went out of town, I would come over and walk your dog, and feed your cats, and water your plants, and get your mail and all that. And I would charge people a whopping $3 a day to do that. But I lived in this kind of isolated, secluded - it was a large neighborhood but it was kind of cut off from everything else. And nobody else was doing this in my neighborhood, so I had this complete monopoly. And I thought, wow, business is just so easy. You know, you just hang out your door sign and distribute a few flyers and business comes your way and, obviously, that's not the case later on.

But yeah, I've always loved working with business owners. I've always had this sort of business mindset. And when I went to college, I decided to major in finance. I got a degree in finance. And then, right out of college, I started working as a financial advisor. I actually joined my father in his practice and we've been working together ever since. That was about 13 years ago. 

But to circle back on your question, I've also always enjoyed public speaking. I'm one of those people that's kind of weird about that. And to grow my public speaking skills, I joined Toastmasters probably like 10 to 12 years ago. And if you've ever done public speaking, one of the hardest things to do is to actually be funny. And so, I tried. I competed. They have several opportunities to compete in humorous speaking competitions. And I saw it as a good challenge as a way to kind of stretch and grow my speaking skills. And so, I started competing in that.

But sometimes, you know, you can naturally be kind of funny if you're a funny person but to actually be judged by other people on how funny you are when you talk is a whole different ballgame. So yeah, I had a lot of fun doing that as well. It helped me quite a bit in developing my speaking skills.

Jim: That's awesome, Ashley. That's great. We've had a few people on who've been in Toastmasters and I've gotten a lot of good experience of public speaking about that.

And in the materials that you sent over, there was a quote that you highlighted that I really liked, and I want to read it for you. And then, I want you to talk to our listeners about what it means to you. It says, “Picture a day when your business is no longer running you.”

Ashley: Yeah. So, I think for a lot of business owners that I work with, especially as they get closer to retirement, but at all stages of running a business, sometimes it can feel like rather than you running your business, your business runs you and you become a slave to your business and, you know, always on, always working, always worrying about things.

You know, even myself, I fall into this trap. I kind of woke up early this morning and my brain kind of started - the wheels started turning in my brain and I was thinking about a couple of different things as it relates to work, like “I’ve got to do this. I’ve got to do this.”

So, I think it's very tempting. And it's very easy for business owners to fall into that trap of, they become a slave to the business and the business runs them. But the goal with what we help our clients with and the goal with exit planning is to get to that point, especially late stage in your career, where you are not a slave to your business. If you want to go on vacation for two weeks or four weeks, you can do that because the business runs effectively without you there and you don't have to be there to deal with every little thing or put out all these little fires that constantly come up.

And that's one of the key principles of exit planning is to be able to kind of gradually back away from the business and still have the business run effectively. Because if it doesn't run well without you, if you don't have other people in place to keep things running, then you don't really have a way to exit your business. You're going to be one of the people who ends up just kind of closing up after you want to retire and not have any sort of viable business there that can be transferred to anybody else.

Tyson: So, Ashley, I think most people think of exit planning is something really bad happens and so I've got to get out. And that's not quite what it is. So, can you tell people how to get started? Like, what are the first steps people should take whenever they start thinking about creating an exit plan?

Ashley: Yeah, so exit plan-- yeah, you're right. I think a lot of business owners who exit their business, there's a variety of ways to do that. And exit plan could mean you still maybe own the business or you own your practice but somebody else is running the day to day. It could be family transfers. Tt could be a transfer to another employee, maybe you groom, you know, the next generation of ownership. You see this a lot in law firms and accounting firms, especially bigger firms, or they bring in additional shareholders and owners. But there are a variety of ways to exit your business.

So, depending on what that path looks like for the individual business owner and what they want for their business, both culturally and for their own-- you know, what their own vision is, that's really the starting place is thinking, “Okay. Well, what are my options when it comes to exit? Do I want to transfer this to somebody on the inside - another employee or a family member? Do I want to try to sell this business to an outside third party, or do I not have anything? Is the business just me? And do I just need to lock up the doors one last time and walk away?”

So, the first step, really, is understanding what your business is worth because if I start from a place of knowledge and knowing what my business is worth today. “Do I have something that I can transfer? And what is the value of that?” That serves as-- I always liken it to like entering your location on your GPS. If I want directions for how to drive to where you are, I need to put in my current location in order to get directions. Otherwise, it's going to be really inaccurate and I'm going to take all these wrong turns. So, the starting place is really understanding what your business is worth today.

And most business owners have no clue what their business is worth. There was a study done a few years ago that found out that only 2% of business owners actually know what their business is worth. Everybody else is completely clueless, or they're using this wildly inaccurate rule of thumb that they've heard that they should use for their industry, but it doesn't take into account the individuality of their particular business.

Jim: Can you give us some general guidelines about what we should be thinking about if we're trying to value our law firms?

Ashley: Yes. So, we actually use a tool that we make available to anybody who wants to use it. It's a database of-- right now, there's about 50 million businesses in this database. So, it has really good comparative data. If I just use the example of a dental practice, there's 370,000 offices of dentists in this database. So, law practices, you know, are everywhere. There's lots of comparative data, no matter what industry you're in. But especially with law because it's such a large industry.

But if you can gather a few basic pieces of information about your business, like what your revenue is, what your pre-tax income is, what you pay yourself, accounts receivable, accounts payable, whether you rent or own that space. It's only about eight pieces of really high-level basic information that, if your books and your accounting records are reasonably clean, you can grab that pretty quickly. And then, at that point, it only takes five to 10 minutes to enter that data in the database to get a result as far as what your business is worth.

So, once you enter the data, it'll tell you, “Oh, your law practice is worth X dollars.” And it's very good because you can see how it compares to other practices, both locally and nationally as well. So then, you can say, ”Okay. Well, maybe my law practice is worth half a million dollars, but I need it to be worth a million dollars in order to exit and in order to have that be enough in order to retire.” So then, you can get to work on figuring out how do you get it from 500,000 to a million. And then that's also where the exit planning comes in because there are so many different things that you could spin your wheels doing or waste your time doing that may or may not grow value. But we work with our clients to kind of pinpoint the things that are going to have the most impact on growing that value for that particular business.

Tyson: So, Ashley, a lot of this is great whenever things are normal. I'm sure some people are thinking like, “Yeah, this is great when things are normal.” But if you haven't noticed, we're in the middle of a pandemic. So, what are some things that people can do, some firms can do to protect their assets, to protect their firm because, I mean, a lot of firms have taken a huge hit. A lot of criminal defense attorneys have gone-- they basically used up their entire nest egg, so what are some things that they can do to protect themselves?

Ashley: Yeah, that's a really great question. So, I think you're right. There's a couple of ways you can look at this pandemic. You could sort of just hide under your desk and hope that it goes away sooner rather than later. But the people who are going to come out the other side of this, okay, are the ones who are going to look for opportunities. So, there's a couple of things that business owners can do. But protecting your business is vital and that should be done at any time, whether we're in a pandemic or not.

But I think one of the benefits of the current pandemic that we're in is that it's really brought to the surface the thought that, “What happens to my business if I got sick, if I died, if something happened to me?” And when things are going well, business owners aren't thinking about those things. They're kind of just, you know, working in their business and not doing that necessary planning. So, I think the pandemic has really shined a spotlight on that which has been a good thing.

And so, one of the things that I encourage all business owners do, that very few of them do, is to get that business-critical information outside of their head. Everything just lives in your head as a business owner. And so, one of the things that we work with our clients on to help them protect the value of their business, if something happens to them, is to put together - it's kind of like a will for your business but we call it business continuity instructions. So, it's, “Who's your list of trusted advisors, with their contact information?” So, it might be your CPA. It might be your payroll vendor, where you do your banking.

And then, you know, a lot of times a family member, a spouse has to kind of step in in those chaotic days and weeks, if you die or become incapacitated, so you want to give them instructions as far as who should be contacted and how. How do you want your clients to find out? Who should fulfill your role? What do you want to have happen to your business? And then, you know, how should it be disposed of? You might have a partner where you have a buy-sell agreement. Where is that buy sell agreement located? Do you have insurance policies? Do you have lines of credit? Where can copies of these be found?

So, you know, very few of us are organized enough to kind of have everything all in a nice, neat little place that we can just hand over to somebody if something happens or they could find it easily. We have, you know, a filing cabinet here. This document’s in the safe deposit box. This one's on my hard drive on my computer. And this one, I have no clue where it is because I took out this insurance policy 13 years ago and who knows. So, you’ve got to kind of bring that all together. And the business continuity instructions really do that in order to reduce the chaos in in those days and weeks, should something happen to you.

And it's super easy to do. When I do it with clients, it takes about, you know, an hour or two just to document. “Oh, this is here. This is here. I want my clients to be contacted in this way.” You know, you kind of already have a sense of this, but you've never documented it or just put it down on paper. And so, we work with our clients to help them get things out of their head, onto paper, so that, if something does happen to them, then their spouse or whoever they trust to kind of implement this will have the tools to be able to do so in what could be a very chaotic time.

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Jim: Ashley, here's a question for you. Do people make mistakes in setting up their businesses that hurt them down the road, when they want to transition or when they want to sell? In other words, are there structural errors that people make at the beginning that make it harder to transition out when the owner or the creator wants to get out?

Ashley: Yeah. I mean, that can happen. It's hard though because, you know, you want to plan-- I think it was Stephen Covey who said begin with the end in mind. So, ideally, when you start your business, he would sort of think through its lifecycle and say, “Okay. Well, how do I want to set up my business for success for the long term, both operationally and then when I want to when I want to retire and exit.” But the reality is that so few business owners are thinking that way when they set up their business. So, sometimes you can get into a situation where maybe your business structure, it was good for operations, like having a C Corp, but then when you want to retire and exit, maybe a better tax structure or an entity structure would be having an S Corp or something like that. So, there are things that may need to shift down the road.

But, as far as mistakes, I don't know, I think really the biggest mistake is just continuing to kind of run your business without thinking about “How can I gradually step back from this business and make sure that it can operate without me?” If you can't do that, then you're going to end up most likely just closing your doors someday which-- I mean, I've had business owner clients who have done that. Actually, law practice business owner clients who have done that because there wasn't really anything there for them to sell.

But if your goal and you need to sell your business is part of your retirement plan, then you really need to start planning as you get closer to retirement. Usually, the ideal time to start doing some really, you know, focused planning where you're figuring out what your business is worth, you're making plans to fill that gap, you're doing the necessary things that need to be done in order to exit successfully, that process really needs to start three to five years before you plan to exit. And if you're doing, you know, an internal succession where you need to really groom and train that next generation, it could take even longer because, you know, you're also training that person or those people to fulfill your role. 

So, to kind of sum up and answer your question, I would say not doing the necessary things that need to be done to set up your business for success after your exit, is probably the biggest and most common mistake that I see.

Tyson: So, Ashley, how do you get people to, I guess, develop the right mindset to think about this because, I'll be honest with you, I mean, I'm a long term planner and I don't have an exit plan. And I think that in the majority, I know I'm in the majority. And I know I need to do it. I just do. Like, how do you convince someone like me? Well, one, you don't have to convince me that. I know it's necessary. So, you’re past that hurdle. But how do you convince someone like me to then take the next step to do it, to get it done, so that I'm not waiting till the last minute to start?

Ashley: Yeah. Most of the business owners that we work with, that come to us, they're already over that hurdle. They know they need to do something. Retirement is looming on the horizon. They have no idea what they want to do and they need help.

And so, typically, you know, how we work with clients is-- it can be an overwhelming process, like what the heck do I need to do in order to exit or to set my business up for a successful exit and myself up? And so, we kind of operate-- it's sort of like if you want to build a house, right? Like, I have-- I can't even build like a basic. Like, if you had me build some sort of like the most basic thing you could think of, like a popsicle stick, you know, little house. That thing would crumble in a minute. But if I want to build an actual house, I'm going to hire a general contractor, and they're going to-- they know the painter, and the plumber, and the electrician, and all those people who are going to assist and kind of make sure that this project is moving along.

So, when it comes to exit planning, we function as that general contractor so that you, as the business owner, can still focus on what you need to with the day to day. And we're kind of nudging you along the way and say, “Okay. We're going to focus on this. And then, we're going to focus on this.” And maybe nine months go by where we don't actually do any implementation work regarding the exit, but then we pick it back up again, you know, when things change, or when this happens, or when we get closer to the point of pursuing a sale. So, it kind of-- it's a process, and it can take, you know, anywhere from a few months to a few years. And so, you know, by being the general contractor, it allows you, as the business owner, to still stay focused on your business and running that without focusing 100% full time on your exit strategy because that's not going to be good for your business either.

Jim: All right, Ashley, for my last question, I know that you have a podcast. Talk to us about your podcast, what you've gotten out of it, what you've put into it, and whether you recommend it to people.

Ashley: Yeah, my podcast is terrible. I don't recommend it to anybody. 

Yeah. So, about a year and a half ago-- no, maybe two years now. Amazon Alexa has this thing called flash briefings. So, if you have an Amazon Alexa device, you can subscribe to various flash briefings. They're just quick, usually a few minutes or less, little snippets. They're kind of like mini podcasts or mini news updates. You can get weather, news, sports, etc.

So, I built this podcast to be on the Amazon Alexa platform. It's a short form podcast. It's called The One-Minute Retirement Tip. And every week I do a theme. This week, I actually have a guest on. She's talking about breaking money silence. It's how to communicate better with your spouse about money so that you can work towards a shared vision and a shared goal.

But every week's theme is a little bit different and they're short, little quick bits. You know, it takes you in about the time it takes to brew some coffee, you can learn a little bit about retirement, how to plan better for retirement. And so, I've been doing that now for a couple-- almost two years. I have like 600-something episodes because I publish a new one every day. 

So, if you're in the, you know, short window of time, five to 10 years out from retirement, the topic matter is going to be really, really relevant for you. So, if you check it out, you can listen to it wherever you listen to podcast. It's on Amazon Alexa, as a flash briefing, but you can also find it on iTunes, Spotify, Google Play and all those places as well. 

Tyson: Very good stuff.

All right, Ashley, we do need to wrap things up. Before we do, I want to remind everyone to get involved in the Facebook group. There is a lot of great information being shared every single day, so join us there. If you don't mind taking just a couple of seconds, as you're listening to these tips and hacks, give us a five-star review on iTunes or wherever you get your podcast. We would really appreciate it. And Guild rates go up next month, so if you want to join us in The Guild, check out maximumlawyer.com.

Jim, what is your hack of the week?

Jim: Okay. Tyson, so you know how much I hate meetings, how I get distracted easily, and how they sort of make my brain hurt and I just have this natural physical revulsion to meetings, but we have really been working with putting all of our meetings on Mondays. And also, I have a half-hour meeting with the associates in the morning set aside each day. And then, I have a marketing meeting on Monday. I meet with Kelsey on Monday. I meet with the leadership team on Monday. We do our 90-minute meeting for Traction.

And as much as I hate meetings, it has really decreased the number of people coming to bother me. So, as I've been blocking out these big chunks of time to do real work and not be distracted by the knock on the door, I have found, as simple as it sounds, that these meetings, even for someone who repels against those things, have been really helpful. And people know that, when they come to the meeting, they better have their stuff together to ask me what they need to know because that's all the time they're really going to get.

So, if you find yourself getting pulled to the side by all these different distractions, see if you can schedule a particular time for that. That's been helpful for me. 

Tyson: Let me give you a tip on your hack. Post your office hours on your door.

Jim: Here it is.

Tyson: Nice. There we go. There we go.

So, people listening to this, he just held up his calendar for the week, so his office hours. So, good job.

Mine. We're always big and bold so you can see. Like, these are the hours you can come talk to me. 

So, Ashley, do you have a tip or hack for us?

Ashley: Yeah. So, for anyone who wants to figure out what their business is worth, for free, you can go to truenorthra.com/valuemybusiness. You can get the checklist of all the data that you need to fill it in. And then, you also get free access to that valuation tool, anytime you want to use it - now or five years from now. We provide that as a free resource for anybody who wants to use it because it really is the first step in figuring out how the heck you're going to exit your business.

Tyson: Very good. Very good.

I think it's a something that we should all check out because I think it will benefit all of us.

So, Jimmy, you were talking about how people have reached level two of the corona frustration. So, we can call it the Rona Frustration Index, Rona Frustration Index level two. I don't know how many levels there are, but they are definitely at level two.

So, here is my tip. Get on your phone and text three people that you've not reached out to in the last couple of months. And then, send them a nice little message. I think we need to start spreading a little bit of love because there's been so much just politics, and anger, and hate going on. I think we're all getting to that point. I mean, we're all-- I'm a very laid-back person but I will tell you, I'm to that point, too.

So, reach out. Send a text message to someone. I'm going to be sending out some to a few members I haven't talked to in a while. And so, reach out to people and tell them how you appreciate them. You don't have to send a thank you card. But, if you want to, you can do that as well. But a simple text message will work.

Ashley, thank you so much for coming on. We really, really appreciate it. It's been great.

Ashley: Thank you. It was fun.

Tyson: Thank you, all.

See you, Ashley.


Thanks for listening to The Maximum Lawyer Podcast.

To stay in contact with your hosts and to access more content, go to maximumlawyer.com.

Have a great week and catch you next time.


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