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Succession Planning Process with Ahmie Baum

Editorial Team November 28, 2021

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Succession Planning Process with Ahmie Baum

LifeBlood: We talked about the succession planning process, the immense complexity that exists, the four key areas to be mindful of, how to treat obstacles as opportunities, and how to deal with not having enough time with Ahmie Baum, Founder and CEO of Interchange Capital Partners. 

Listen to learn why engaging with experienced professionals will save you time, money and aggravation over the long term.

You can learn more about Ahmie at InterchangeCP.com, Facebook, YouTube and LinkedIn.

Thanks, as always for listening!  If you got some value and enjoyed the show, please leave us a review wherever you listen and subscribe as well. 

You can learn more about us at MoneyAlignmentAcademy.com, Twitter, LinkedIn, Instagram, Pinterest, YouTube and Facebook or you’d like to be a guest on the show, contact George at Contact@GeorgeGrombacher.com.

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Our Guests

George Grombacher


Ahmie Baum

Episode Transcript

george grombacher 0:00
Come on

Welcome to lead flow. This is George G. And the time is right welcome today’s guest strong and powerful army bomb army. How you ready to do this?

Ahmie Baum 0:20
Yes, let’s do this.

george grombacher 0:21
Let’s let’s do this AMI is the founder and CEO of interchange Capital Partners. They’re helping people develop a clear vision for their futures and successfully transition their businesses. Me, tell us a little bit about your personal life’s more about your work and why you do what you do.

Ahmie Baum 0:40
Sure, well, thanks for having me. I am a very young 66 year old, I’ve been involved in this line of work in terms of transition planning, unlocking the lifetime of work for 42 years. I’m a father of three, and the grandfather of one. I enjoy taking care of my health. I enjoy biking and reading. And I think the thing I enjoy the most is helping people figure it out, whatever that may be. I’ve came from nothing and had to learn a lot over the last 40 plus years, and I wanted to be able to help others recognize that the complexity that exists out there, it can be resolved into bigger and better futures. So that’s what I’m passionate about. And my firm helps business owners and family businesses as well as professionals who are recognizing that it’s time to transition and unlock a lifetime of work.

george grombacher 1:56
Nice, Mike, I appreciate all that. So there’s a lot of really important stuff there. Certainly appreciate 42 years, dad, three grandfather gratulations. I’m sure that that is awesome. Yeah, that’s certainly taking care. Yeah.

Ahmie Baum 2:16
Everybody says it, but until you get there, there’s nothing better than grandchildren. That’s wonderful.

george grombacher 2:22
That is one of those. That’s actually true. Nice. All right. So when we’re talking about the world of finance, it’s it’s enormous. You said complex, I totally agree. It is a lot. And then you factor in owning a business. And that has its own incredibly complex and set of rules and problems. And then there’s family as well. So just talking about that, I’m thinking, Oh, my gosh, how in the world? How do you even get started? How do you how do you start unwinding all of that and thinking about a transition? Whereas the starting point, yeah.

Ahmie Baum 3:02
Yeah, it’s a it’s a good question. In the complexity is exactly what you talk about. I mean, there’s really four circles, of that complexity, it starts out as an individual, and then the individuals tied in with the family, then the families tied in with the business, and then the business is tied in with the ownership or the enterprise. Any one of those by themselves have complexity. And then when you start to put push them all together, it creates a homeostasis, sort of a balance point. And people say, Well, I can do this, but I can’t do this. And this seems to work and that, that. And so they The problem is that they’re dealing with an inevitable when it comes to this. It’s not it’s like the law of gravity. If you jump off a roof, you’re going to fall. There is a the law says it’s not if you’re going to exit or transition of your business. It’s when. And unfortunately, because of the complexity, people say, I don’t really know how to do this. There’s too many competing forces for my time and energy. So what do I do to your question, the first thing that you have to do is work with somebody who’s an expert in that field. And it’s not just the expert in the field of Exit Planning. It’s the expert in the field of recognizing that complex system of the four circles, and how to help you, your family, your business and your partners navigate through that system. In finding common ground too often. What prevents this from happening is all the historical baggage around all the things that didn’t work or the resentments whether it’s individually or again in the family or Things between various employees. So the first step is to begin to walk away from that, and start thinking out into the future. One of the things I love about future thinking is, most people never create a future with all kinds of difficulty. So it gives you this space to be able to say, well, what would I like this to look like, in three years, five years, 10 years, 25 years. And when you go into that space, and in you go there, you tend to only create something that’s very nice and beautiful. And it’s a great plan. It’s after you do that, that all the obstacles and all the fears start to come up. But the first step is, you have to figure out where it is that you want to be. After you figured that out, then you can start to go back and say, Okay, here’s all the reasons why I can’t do this right now. And you start listing them out. Too often in this business, what happens is people because it’s so uncomfortable, they tend not to do anything. And so what we’re trying people try to get people to recognize all that uncomfortability is really around the obstacles. So let’s start to reframe how we see obstacles, let’s start looking at them as a raw material for our future success. So if I’ve got this obstacle in front of me, it could stop me. Or I could take a look at that obstacle. And I could say, Wait a second, what would an ideal situation look like? Once we get through the obstacles, then we can go back into identify the opportunities that they want to capture. And then most importantly, this whole body of work is really about supporting the strengths, but the family, the individual, the business, and the ownership past. So the first step is to go out there and do what you did when you were a kid. Go out there and dream, what does your best future look like? And then we can work from there. Obviously, there’s a lot of technical information, you need to have a team, we’ll get into some of that around it. But the first step is to recognize that you are entitled to dream, when in conjunction with the fact this is inevitable. I know we all go to sleep at night with the hope that we’re going to wake up tomorrow morning and have the full day. We know unfortunately, that’s not necessarily always going to be the case. We don’t know when this is going to happen. But it will happen, something will happen that will cause the transition to be reality. And then it’s up to you to say, well, if I know it’s going to happen, why don’t I do what I do with everything else, let me plan for, let me look at the various options that are out there. And then let me proceed a

george grombacher 7:58
lot of really great a lot of really great stuff, too. Thank you. I love the the fact reality that when we do look into the future and think about what we want, it’s oftentimes really great. And we don’t think about all the all the impediments that that that will be coming along with that. So I appreciate that and come into the recognition that this is going to happen. And it is wiser to take positive action than simply to put our head in the sand and let things play out. Because you’ve worked so hard to build this. When when you’re

Ahmie Baum 8:33
into that point to that point, you never acted that way. In the beginning, when you started your business, you were very deliberate about you know, you did all your work, you did all your research, you found the appropriate opportunity and you went to work on. It’s just the fact that there is only so much time in the day and the complexity around all this. So that pushes you back. And I’m challenging everyone to say wait a second, this is inevitable. Just like in my case. And I’m like many business owners, I had no choice. You know, if I was going to create the life that I wanted to create, I had to figure out how financially what type of business I was going to be able to work with and build and develop so that I could build that bigger future. So it’s that recognition. It’s realizing you’ve done this before. The difference today is because you have so much more resources available to you. Because you do have the family, you do have the business you do have the ownership. It’s structuring it in a way around the system so that the system can support you and all of the stakeholders to move us through the inevitable and create that better outcome.

george grombacher 9:53
Nice. So once somebody embraces this and engages in the process, I wrote down sort of to triage of obstacles, but maybe that’s not the right way to think about it. Maybe once you get started with it, it becomes obvious what the major issues or obstacles are to address first.

Ahmie Baum 10:14
Sure, I mean, there’s all kinds of different obstacles. So obviously, let’s let’s just start with the individual. So what are the obstacles with the individual? In many cases, sometimes the major obstacle with the individual around thinking about selling their business or transitioning their business is their own lack of financial security. Most business owners have all of their wealth tied up, or the bulk of their net worth tied up in their business. And they really are concerned that if I sell this business, am I going to have enough to be able to cashflow my life for the rest of my life? That’s, that’s a major concern. And it’s interesting, because it doesn’t matter how much money we’re talking about, everyone seems to have that concern. So we’ve got that issue on the individual. Now we move into the family space. And then we might be in a situation like me, where I have one son in the business and two children out of the business. And how do I deal with that, and as we grow and build what happens to my family, when we may need to hire someone outside. So that’s the fit, there’s family dynamics, there may be issues that we’ve seen between families that are deals, let’s face it, family dynamics, by themselves, have lots of issues around them, then you move to the business. And now you’ve got all you start layering all the employees, the management, and all the nuances and complexity around that. So you’re right at every step of the way, there are going to be obstacles, but the obstacles are going to be different. And if we can get your listeners to recognize that all obstacles are, are the raw material for future success, they won’t be held back by the obstacles. In fact, they will go for them, because they’ll realize that these are the pieces that are going to help them build that bigger future. But the the problem with this whole area is it’s not like a an exact recipe. It takes different tangents. And it also takes a lot of time. And that’s one of the major issues is how much time do you have, you’re spending all your time on yourself, you’re spending time on your business, your family, your community, you know, most of our clients turn to us and say, I don’t have the time to go through. And that all the possibilities that I want, so that I can create these better outcomes I’m working on the urgent I’ve got to get, keep my business going, keep my family going, etc. So it’s a issue of time, it’s an issue of talent. A lot of business owners say I don’t know where to go, because to to create a successful exit or transition, you have to have knowledge around tax, get the law knowledge around legal banking protection. Most clients don’t have that most clients have a single trusted advisor, at best, or at least I should say, some of them don’t even have that. And so they’re really stuck. Okay, now I know this is inevitable. I know about all the obstacles, but I don’t even know how to do this. So you have to put together a team that can work collaboratively. And then you need to assign someone on the team to quarterback it, be the chief of staff so that if done correctly, it will create more time for you. Because they’re working on this behind the scenes and coming back to you on a regular basis to report here’s where we are, here’s what you need to do, here’s what they need to do, etc. In the plan the action plan is created. So in many cases, it’s a three step process, clarity first, once you get the clarity, immediately all those obstacles and things come in you need understanding, because people are not going to move into action if they don’t understand where they’re going. So there’s a whole bunch of understanding that needs to be done. And then finally an action plan around it. And it’s not always a straight line. It moves in various ways based upon what comes up once you work through that vision,

george grombacher 14:50
clarity, understanding and then action. I like it. So when he talks about the obstacles being the raw material, um Curious to know a little bit more about that. Let’s just use you as an example where your son is in the business and you want to, for lack of a better term equalize the benefits out of the business. Or maybe I’m thinking about that the wrong way for you to kids who aren’t in the business. How are you viewing though

Ahmie Baum 15:15
it’s, it’s it’s absolutely perfect. We just had this conversation with our Estate Planning Attorney yesterday, we’re working on updating our, my wife and my estate plan. And when they originally since again, I’m like most business owners, the bulk of my net worth is tied up in my farm interchange Capital Partners. And my son is a 10%. Owner. And I’m a 90%. Owner, I have two other children. So the way the estate plan was initially developed was to say my 90% is going to go equally to all three children. Well, my oldest son turns around and says, Well, it doesn’t who’s in the business? Because life doesn’t seem fair. It’s equal, but it’s not fair. And that’s one of the major issues around family obstacles, equal versus fair, it’s equal, but it’s not fair. Why isn’t it because he’s working to build and grow the business. And he’s really doing it for his brother and sister. So we had to recognize that was the obstacle, clearly, and now we realize, wait a second, this gives us an opportunity to do a number of different things, a fix it for Brian, but it also enabled us to recognize, we really need to have a family discussion about this, we need to open up the lines of communication within our family around money and wealth. And that’s like, almost taboo, in some cases, with families, they don’t talk about the money. They don’t talk about these kinds of issues. So here’s how we took that obstacle, and turned it into raw material for future success. Because we when we had the family conversation, his younger brother says, I don’t want it. I want to build my own. You don’t need to give me anything that. Well, his older brother never knew that was where he was thinking about. His sister said, Well, I may be interested in joining the company, we didn’t know that. That’s how, in a very small example, the the obstacle that we were being equal but not fair, which comes up all the time was turned into, was given the opportunity to become something more successful when in terms of figuring out a more fair approach rather than equal and some information that the family didn’t know, so that we can move the enterprise forward.

george grombacher 17:59
Nice. I appreciate you sharing that. So you mentioned that the the topic of monies is has has always sort of been taboo. I’m just curious, over 42 years of doing this kind of work, is the same problems. Is it harder? Is it easier?

Ahmie Baum 18:18
Well, I think it’s harder, because there’s just a lot more information. I think it’s harder, because there are a lot more rules and regulations. I think it’s harder because of all of this, finally, us realizing that we need to look at this as an entire system, rather than as four separate entities. Too often what happens is because it’s easier, not necessarily effective, or efficient, easier to just deal with one piece at a time. So let’s just deal with the family or let’s just deal with the business. Or let’s just deal with the ownership or let’s just deal with the individual. In fact, it needs to be seen collaboratively and collectively. And so one of the issues that needs to be addressed is how do you do that? So most people have a group of advisers around them. And the patriarch, the matriarch, the owner, tends to go and have separate siloed conversation. So if there’s a legal issue, they talk to the attorney if there’s a tax issue, they talk to the accountant, unfortunately, they only know a little bit. So they can’t really see how legal and tax and protection banking all come together and the family and the ownership and all of that stuff. So what they’re doing is they’re, they’re going back to that place of well, if I just pull it apart, deal with one I’ll make progress. Yes, you will make progress you will not make effective and efficient progress. So what we tell our clients is first you have to read look at your advisory model. Currently, you’re sitting in the middle. And you’re having those, as I said, Separate siloed conversations with your various advisors, not having the ability to synthesize and have enough knowledge to be able to see how they intersect. Our recommendation is to move you out of the middle of that, and put us in the middle, or someone like us in the middle, who can act as your chief of staff who understands where you want to go and where your obstacles are, because we did that in the beginning. And then work with your team of advisers tax and legal banking protection, etc. And come up and use the collective brain trust, to brainstorm and come up with a collaborative vetted process and ideas so that when you get it you can say wait a second, I really have the best opportunity for an effective and efficient process. So that’s where some of that issue comes in. And it requires them to change the way they’re approaching it, but when they do, it gives them much more time it gives them it actually creates less expense because they don’t go down individual rabbit holes with separate conversations to find out oh my god, that’s really not important or that doesn’t fit with everything else that we’re doing.

george grombacher 21:21
I love it makes sense. Ami thank you so much for coming on. Where can people learn more about you pleasure? How how can they engage with you and interchange Capital Partners?

Ahmie Baum 21:32
Well, first of all, they can go to our website www dot interchange, C as in capital P as in partners.com. That’s www dot interchange cp.com They can always email us at team at interchange cep.com And I will tell your listeners at the very first step is identify and quantify and we have some tools that they can have to help them identify and quantify their personal situation and how it intersects or hits that interchange between the personal the business, the family and the ownership and we’re out there to help people with this inevitable remember it’s not if it’s going to happen but it’s when and you work your entire life for this you might as well in you would normally want to create the best of outcomes

george grombacher 22:34
perfect well if you enjoyed this as much as I did, show me your appreciation and share today’s show with a friend who also appreciates good ideas go to interchange CP comm shoot me an email at team at interchange CP COMM And recognize that it’s not if it is in fact when thanks again me. Thank you, and until next time, keep fighting the good fight. We’re all in this together.

Transcribed by https://otter.ai

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