Have you ever thought about expanding your business beyond your practice? Ever wondered how you could level up your business through podcasting? Maybe you are thinking about selling your business, what do you need to do?
In this podcast episode, Joe Sanok speaks with JP McAvoy about how he stepped outside of traditional law, how a podcast is helping him grow his business and reach more people as well as how to position a business to be sold.
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Meet Jeffrey (JP) McAvoy
Jeffrey (JP) McAvoy is the founder and managing partner of Conduct Law. He practices corporate and commercial law. JP assists his clients with a wide range of transactions including financings and acquisitions, re-organizations, and corporate entity structuring matters. He acts for clients buying and selling businesses and represents a diverse range of corporations in Canada, the United States, and Eastern Asia.
JP is also the host of The Millionaires Lawyer, a five star rated podcast on a range of topics from business, legal and accounting perspectives. In his spare time, JP can be found on the golf course. or spending time with his wife, daughter, and son at the cottage
In This Podcast
- Springboarding from traditional law
- Outside of the practice
- ROI for the podcast
- Starting a podcast specifically to build a local business
- Positioning a business to be sold
Springboarding from traditional law
So I signed up, I started becoming a champion for him, and I’ve certainly started taking some of the lessons he taught me and applying it to my own practice.
A college professor and author reached out to JP and asked whether he would be the Canadian, and North American go to as a legal expert for a philosophy he was espousing. The philosophy for him was for startups, a different method of organizing companies to split equity amongst the participants. Instead of issuing equity as a lot of companies traditionally do, he’s developed a model where people just simply record what they call their ‘inputs’. They record them for a period of time to delay the actual equity issuance. And it was a concept that a lot of lawyers wouldn’t buy into.
Outside of the practice
They think a diploma on the wall is enough and and frankly, in these days, it’s not enough anymore. And those that adapt, are going to expand their businesses. They’re going to expand their followers, are going to expand their presence and make a difference in a far great capacity.
JP put himself out there by participating in podcasts attending the New Media Summit and he also launched his own podcast. Not many attorneys are taking part in those spaces, expanding his own practice and his own knowledge base has allowed JP to bring that to his own practice and start teaching people to do the same thing.
ROI for the podcast
If it brings in one person it’s likely going to pay for for the investment.
Spending time and money doing the podcast is a worthy investment for JP. He immediately saw the ROI when his first significant client started working with him as a consequence of the podcast. There is also the following and the SEO created as a direct result of hosting the podcast.
Starting a podcast specifically to build a local business
- Imagine what you want your business/podcast to look
- Establish yourself as the expert
- Participate in events and make yourself visible to the people you are wanting to serve
Positioning a business to be sold
The real key thing is having structures and processes in place that allow you to actually exit the business. A lot of people are so involved in the business and running the day to day but that they don’t think about that.
JP advises that you have to think about the day where you are no longer a part of the business. If you’re able to do that and put processes into place that allows that to occur, your business is going to be worth more. It will also be more attractive to others, others are going to want to purchase it. If this is not something you are focusing on, you’re devaluing your business and making it less attractive to others.
Other things to look at are that 2 years prior to a sale a structure needs to be put in place, of which 50% of the assets of the business are being used for active business purposes. And then 90% of those assets need to be in place on the date of sale. You also have to ensure that the financials are in good shape as well. Most purchases are going to look at least three years of financials prior to a sale.
Watch below for some tips on selling your practice:
- Adam Schaeuble is on a Million Pound Mission | PoP 431
- Slow Down School
- Podcast Launch School
- Killin It Camp
- Free resources to help you start, grow and scale
- Join Next Level Practice
- Apply to work with us
Meet Joe Sanok
Joe Sanok helps counselors to create thriving practices that are the envy of other counselors. He has helped counselors to grow their businesses by 50-500% and is proud of all the private practice owners that are growing their income, influence, and impact on the world. Click here to explore consulting with Joe.
Thanks For Listening!
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Well, I am Joe Sanok, your host. Welcome, welcome, welcome to the Practice of the Practice podcast, the now award-winning podcast. Well, I mean we were, we won the last two years, but just won the third year in a row through the Brighter Vision Best Therapy Resources Awards. Man, thank you so much for voting. We won best podcast, best consultant, and Killin’It Camp one best conference. First time out. We did that and I’m pretty excited about it. We’ve been doing tons of interviews. You know, at the time of this recording, actually I’m only recording this a couple of weeks ahead of time. Oftentimes I batch way ahead. I’m really excited because we just opened up Slow Down School tickets and the early bird prices are going and we’ve got a bunch of people signing up for that.
So Slow Down School is the event we put on here in Northern Michigan on the beaches of Lake Michigan. We bring in an executive chef that has partnerships with local farms. In fact, I’ve said this before, but it’s worth repeating we had a lady who vegan two times in a row. She said it was some of the best vegan food she had ever had. And then last year we also had a lady that was on the keto diet and she stayed in ketosis all week. So, I figured if we can serve both ends of the spectrum with that kind of eating, man, if you start with good food, so much else is easier, right? So, if you want to hang out on the beaches of Northern Michigan, slowing down and then running full tilt towards your big ideas, you know, it’s just so exciting. But Jessica actually sent me one of the best thank you notes I’ve received in a long time. I get a lot of thank you notes, which is so appreciated.
And you know, like children, I don’t want to have my favorites, but I actually asked her if I could read this. She said “Joe, as 2019 came to a close, I thought lot about how much Simplified has grown and how we got here. The truth is I’m living a dream I never would have even thought of without you. So, thank you for your guidance support, and friendship. The work you do truly changes lives and I’m excited to keep partnering in 2020.” Thanks again Jessica Tappana. Tell Christina I said hi and happy new year. You know, that’s what I love about this work. It’s that even though, you know Jessica is a sponsor, it was me texting her and saying, “If you want to get to that next level, I think that we could do some sponsorships together and get you just more clients and that whole living a life that you never expected.
I see that over and over with our Slow Down Schoolers, with the people that are doing the Done For You podcasting, or mastermind groups. It’s hard to not oversell it because, you know, I don’t want to be that person that’s just pushing what we do. But over and over we see people just level up so dang quickly with what we’ve figured out and it feels like we’ve kind of cracked this code. And as we tell our consulting clients the code and kind of what we figured out, it’s really cool to see them just launch and get out there. So, we’ve got Slow Down School coming up. Those tickets are open now over at slowdownschool.com and we’ve got some webinars coming up as well and you can find out about those on our website.
And then the Killin’It Camp tickets. So those will have opened up when this goes live. It’ll actually have opened up and then closed for all of our founders who are people that came in the very first year. So, they get very first access to the cheapest tickets to all the volunteer spots. And if there’s any of the volunteer spots leftover, then those go to other people. But those tickets are going to be opening up I think in late February for the general public and so we’re expecting to have 250, 300 clinicians that own private practices that are starting things hope everything is going to go great in your world and you can join us. So, make sure you’re on that list over at killingitcamp.com. And, yes, we’re going to get to it today. Today JP McAvoy is on the show and we’re going to be talking about how to level up your business and how to prepare to sell a business.
As many of you know I sold Mental Wellness Counseling in 2019. I had been building that since 2006, is I think when I filed the LLC, but it was really just a side gig for a while and probably from 2009 until when I sold it. Was it so for about 10 years there? Was when I was really actively going up and working on that and I learned so much in that process. In fact, the YouTube series this month on our YouTube channel, I have four videos all about selling your practice. And so, if you’re interested in that we’re going to put those in the show notes and those would be super helpful for you as well. So, without any further ado, I give you JP.
Well today on the Practice of the Practice podcast, we have JP McAvoy. JP is the founder and managing partner of Conduct Law and practices corporate and commercial law. In addition, JP is the host of The Millionaire’s Lawyer, a five-star rated podcast on a range of topics from business, legal, and accounting perspectives. In his spare time, JP can be found on the golf course or spending time with his wife, daughter, and son at the cottage. JP, welcome.
[JP MCAVOY]: Hi Joe, thanks so much for having me on the show.
[JOE]: Yes, I love hanging out with people that I’ve met in person. I know when we briefly connected out in San Diego it was one of those moments where it’s like, “Wait, you’re like a lawyer doing Practice of the Practice type stuff for people, for lawyers?”
[JP MCAVOY]: Yes. Very much. You and I think we’re seeing wavelength right to, so we were just riffing back and forth and we knew it would make it for a great podcast as well. So, I’m happy to be here today.
[JOE]: Yes, absolutely. So, you are practicing law and then at what point did you start doing this more kind of consulting angle? Because you know, there’s lots of attorneys out there that we could interview about kind of the legal stuff. But today I’m more interested in when you kind of springboard it out of just traditional law.
[JP MCAVOY]: Yes, yes. Great question. As you say, I mean, there’s so many attorneys and attorneys maybe like counselors are sort of the, a lot of them are stuck in a sort of a traditional space or the way that they’ve always done it. And for me the light bulb went off when actually a college professor and author reached out to me and asked me if I would be the Canadian and North American go-to, as a legal expert for a philosophy he was espousing. The philosophy for him was for startups on different method of organizing companies to split equity amongst the participants. So instead of issuing equity, as a lot of companies traditionally do, he’s developed a model where people just simply record what they call their inputs and have recorded them for a period of time to delay the actual equity issuance.
And it was a concept that a lot of lawyers wouldn’t buy into because again, the, it is contrary to sort of the traditional way of thinking. And he spoke with me about it and I said, “Oh, now, I get it. I’ve done a lot of startups. In fact, I’ve been a lot of involved in a lot of SOPs in Silicon Valley where they weren’t ready to issue equity, but they wanted to make sure that they were recognizing what each was doing or contributing towards a business endeavor.” And so, when I told them from a legal aspect, I was willing to champion what he was saying he signed me up for that, or I’ve been sort of his, one of his champions for that sort of model. And I could see how he was doing it in a way that was different than when attorneys are doing it, because through writing, through podcasting, and through his online courses, he’s been teaching these methods. And again, he’s not a lawyer. He’s a college professor. So, he’s been teaching these methods and then realize, “Hey, there’s a lot of lift here.” He’s doing business differently. He’s educating people and allowing them to do business differently. And I think in so doing, everybody’s improving the way they’re doing business. So, I signed up I started becoming a champion for him and I’ve certainly started taking a set of the lessons he taught me and applying it to my own practice.
[JOE]: Wow. So, what were some of the first kind of steps you took as you went outside of just your own practice?
[JP MCAVOY]: Well, the first thing is actually getting out there, right? So, for me, and not a lot of attorneys are actually spending time podcasting and spending time in media. There are certain, and in certain areas, media lawyers for example. But for myself as a corporate lawyer, I’m certainly stretching the boundaries by saying, “I’m actually going to get out there.” And in doing that I started participating in podcasts, I launched my own podcast, and I started participating in things such as the new media summit, which is where you and I met. `So not a lot of attorneys are taking part in those space. For myself, expanding my own practice, my own knowledge base has allowed me to bring that to my own practice and start teaching people to do the same thing in theirs.
[JOE]: Now I guess I wonder if part of the reason that people don’t jump into that space is, they’re fearful of maybe legal implications of, you know, going out there. Because I think for therapists the whole kind of borders and licensing, they’re worried oftentimes about, “If I go on these podcasts across state lines, man, like could I get sued? Could I all these other things, was that part of it for you or was there something else that you think might hold people back from going bigger?
[JP MCAVOY]: Yes, great question Joe. I mean I think that’s a very, very small part of it. And it’s the same thing that applies for the counselors, I think. I mean, I think there is, that you need to be aware of what you’re seeing for anybody and certainly a professional when you’re speaking to the media or you’re on a media platform. And that holds true and has always held true for lawyers. So, as I say, I think it’s a very small part of it. I think that the bigger part is that people either don’t know or they’re afraid or they don’t understand. Attorneys are notoriously slow to adapt. They’re dinosaurs, frankly in industry. And they figure just by virtue of their degree that they have a monopoly over the market, you know, that a business is going to find its way to their door. And I —
[JOE]: Counselors can’t relate at all to that.
[JP MCAVOY]: Exactly [crosstalk] And frankly, in these days it’s not enough and it’s not enough anymore. And those that adapt are going to be able to expand their businesses, they’re going to expand their followings, are going to expand their presence and make a difference in a far greater capacity. So, by reaching out and touching other people, they’re going to allow their businesses to expand. And so that’s what I’m trying to teach. And I know that you’re doing the same way yourself.
[JOE]: Well, I think that what I’m seeing is that, you know, kind of the younger generation of people coming out of college that are in their twenties and early thirties, you know, they’re fully embracing Instagram or Pinterest or you know, even other platforms like Snapchat or TikTok as a way to get the word out about their practice. And some of the kind of more established practices are really feeling threatened by that. I remember there was this PhD psychologist that I had heard through the Grapevine was really pissed off that I was charging so much more than like PhD level psychologist because I have a double master’s degree. And he was all up in arms, like, “How dare Joe Sanok charge that much.” It was just like, “Are you kidding me? Like, just because you don’t have your junk together, it doesn’t mean that these newer clinicians should suffer.”
[JP MCAVOY]: Yes, absolutely. And I mean, the market will bear right to your rates. I mean, you’re teaching things and your knowhow is actually, I think, much more impressive than all of these people that have been doing things in the traditional way. I look at some clients of mine who may be an expert in their own specific industry, but they’re practicing it in a very old way that’s not allowing them to leverage their time or allowing them to leverage their network, allowing them to leverage even their own staff and in so doing, they’re actually minimizing the amount they can charge and the amount that they are actually earning. They shouldn’t be limited by that. I mean, certainly if you don’t want to do it or you don’t want to earn, that’s your choice. But if it’s available to you, I would suggest perhaps you ought to take advantage of it.
[JOE]: Now, I would love to hear how you’re monetizing the podcast because we have a bunch of people that are going to be joining the Podcast Launch School e-course, we have some Done For You Podcast we’re launching in 2020, and one of the questions I always get is, “How am I going to make money off of this?” And what I usually say is the easiest way to make money is off of your own products whether that’s a membership community, a consulting mastermind group, things like that then sponsors and affiliates. I’d love to hear how you’ve approached your podcast from kind of a monetary standpoint.
[JP MCAVOY]: Yes, great question Joe. And I think the way you describe it is certainly of paramount importance for people to understand that because the biggest way is to leverage of course and monetize is, it’s producing traditional legal work for the law firm. So, I mentioned that I’m the managing partner of Conduct Law, which is a traditional legal law firm, a corporate law firm and so, in so far as somebody connecting with us or finding us through The Millionaire’s Lawyer, in the podcast that’s certainly the main way that it’s being monetized. But we’re also selling sponsorships on the podcast. And so, a sponsor, for $495 will get four mentions on the podcast throughout a six-week period.
So, we monetize it that way but specifically and the best return of course is what it’s able to translate to in the traditional legal sense. So if I’m speaking to somebody and they realize, “Yes, I actually do like this lawyer, I like some of the things this lawyer is saying, I want to learn a little about what he’s taught some of his other clients and I need to do some legal work,” or they’re moved over to the law firm, the Conduct Law, and from there we’re able to either service them or refer them to our network where they are serviced.
[JOE]: So, I like that because a lot of people that want to start a podcast, they don’t necessarily want to do consulting like me or mastermind groups. They want to just keep doing therapy. They just want to get new clients that way. They want to grow. So, what would you say is unique since you’re using the podcast to kind of grow your business, your practice that you already have? How have you structured the podcast to fuel that business?
[JP MCAVOY]: Yes, great question again. So, I mean, what I’m seeing, and I’m fascinated by this. I’ve always, I practiced for a time in Asia, I practiced for a time in California and, I now have an office in Orlando and an office in Ottawa. From all those locations I’ve got a little bit of a following and I continue to service clients from each of those individual locations. And what I’m finding by virtue of that original work and now the reach of the podcast is that people are reaching out to me from all over the world, specifically North America and Asia. And I’m either able to do work or service the work through entities that I’m a member of or a part of a network of. And so I’m fascinated by the reach of the podcast, the way that people come in through the various channels, either through the podcast itself or find me in any of the other various social media platforms I’m available on, reach out to me and if it’s something that I’m not able to service myself, I’m able to connect them very quickly with somebody that can. And in that way, as I say, create a greater following, a network of people that if we’re able to help each other, we’re able to do sometimes even business down the road in a way that we’ve never been able to do before.
[JOE]: Now when you say networks, are those networks that you started or that you have an affiliate relationship with or tell me a little bit more about those kinds of networks.
[JP MCAVOY]: Yes, affiliate relationships. So, certainly as a lawyer it’s quite common for lawyers to be members of affiliate networks where you’re servicing the work. And so, by being a member of the network, there’s, I won’t say it’s not a requirement but they are, the networks are interested in active members and those that refer from within the networks. And as you refer, things are referring kind of return to you by way of referral. So, as I’m active in some of these networks and it’s simply connecting, right? So, people have reached out to me through, again, through the media, through the podcast and if I can service it and if it serves through my own law firm, of course we can do it. But if not, I refer it to the network and I almost gather points for doing it that way as well.
[JOE]: Now, is that like a BNI group or like what kind of network? Yes.
[JP MCAVOY]: Yes, it’s a bit more involved than a BNI and in fact I’m not sure if a lot of your members or a lot of the people that you work with are members of the BNI. For myself, as I say, I get quite a few requests to join different things and the BNI I’ve found have been time intensive and not ones so I, well I’ve always turned them down, the BNI type things. They’re a little more formal than that. So, it’s generally networks of law firms. So, networks of law firms will form affiliations and you know, there is an application process for those, but it’s not an individual. So, it’s not at a BNI level. It’s at a firm level and then the firms refer work to one another.
[JOE]: And the points, because, the reason I’m asking some of these questions is that, you know, in our counseling code of ethics there’s a very clear line regards to fee splitting. So, you know, if I refer to a chiropractor, I can’t get like a $50 referral fee for that. That’s considered unethical. They want you to just refer to whoever’s best for the client. And I’m not saying that you wouldn’t do that ethically as a lawyer either, but I’m just trying to differentiate if that’s something that we could do or if it falls coming into that fee splitting type.
[JP MCAVOY]: Yes, I know you’re a, Joe, great question. And I think as lawyers, we are held to, if not the same, probably even a higher standard. So, as I say, points, it’s more brownie points or they say that there’s certainly normal compensation. So yes, there’s no, so the legal, I guess the legal of equivalent to, and certainly from an ethical standpoint, most law societies will require, well there’s first of all, there is no fee splitting and there’s no referral fees. So, there’d be no fees paid and if there is anything to be considered of any benefit, it’s got to be disclosed to the client and so it’s more, as they say, sort of brownie points. We say points, it’s scoring points. So, you know, if I refer somebody four or five clients, they might refer me three or four clients, but there’s certainly nothing else other than referrals exchanged.
[JOE]: So, it’s more of that just recipro … I always script the word, reciprocal relationship type of thing where you’re building kind of connections with people that are good fits for people that aren’t a good fit for you and then they’re more likely to refer back to you?
[JP MCAVOY]: Yes. It’s very much that and, I would even add to it. It’s the relationships that form around it because, especially because of the nature of the international work that I’ll be involved with if I’ve got a client that is doing business in Ohio and Shanghai, in fact, I’ve just done a transaction, that’s why it jumps to mind where I’ve got a client that’s selling and they own, have satellite offices throughout the world. In the course of the sale process the purchaser wanted and needed opinions on some of the foreign jurisdictions. And by virtue of the networks and the introductions I’ve made, I was able to contact a lawyer that I knew in Shanghai and say, “Can you give an opinion for a client of mine for this particular purchaser,” and made a connection that way that I wouldn’t have been able to do if it wasn’t for the reach that I’ve been able to establish.
[JOE]: That’s super interesting. When you think about the podcast, how do you determine whether it’s worth your time to do that? And maybe, you know, if it’s like, “Oh, that’s totally worth my time, I’m not sure if it’s worth my time.” Maybe there are certain periods of the podcast where you questioned that. How do you figure out the ROI and your time for your podcast?
[JP MCAVOY]: Wow. Powerful question. This is so good for your listeners and for the people you’re helping develop podcasts. I mean, it’s totally worth the time and it’s totally worth the investment. It’s hard to measure, I think in some sense it’s, but for myself and for the law firm, the reinvestment was returned almost immediately with the first significant client file that came in the door as a consequence. So, there’s certainly return for your listeners and for a counselor, somebody that is looking to measure their return of investment. If it brings in one person it’s likely going to pay for the investment, the monetary investment. The second —
[JOE]: Let me pause you right there because I think one thing you knew was the worth of a client. And so oftentimes, even just that basic number for therapists they’re like, “Oh, I just, I’m glad I have a therapy client.” But it’s like if somebody comes 10 times and they pay $150 per session, they’re just as a baseline worth $1,500. And then if you go on top of that and say, “Well, how many people does your average client refer?” Even if it, you know, out of every three they refer one, being able to run those numbers and just say, “You know what, if I get just three clients out of this podcast, that’s going to be amazing for my business.”
[JP MCAVOY]: Yes. Yes, you have to do it that way because as you say, it is who they refer as well and the following that’s created as a consequence thereof. Even the SEO. So, you know, even the SEO, this created podcast, content is generated, connections that are made, like this conversation that we’re having right now. It leads to other things. So yes, if you want to monetize it, you can back at it the way you just described but there’s many other ways and as many of the returns on it as well. So, I’m a big, big supporter, obviously, of the platform and I think it’s the way of the future. I think that it allows, and I’m sure for counselors, ways to reach people that they hadn’t before. For a lawyer, it’s a way to actually reach people and actually compete with major law firms. The major law firms are actually at risk by not just participating in this space. And a lot of them don’t realize it right now.
[JOE]: Yes. I mean I just think about as an attorney your hour is worth so much and so if I can hear you talk about a subject for an hour that’s really valuable to me. And I don’t have to sit down in your office for that just as a potential client to say, “Oh my gosh, JP is giving away this information that he could be charging me for.” That’s a huge value added even if you know, a client says, “What should I do in this situation to say, here’s a podcast that I did about that and that’ll save you a little bit of money?” I feel like that adds value but then even beyond that, just the format of a podcast, you think about, you know, how long the typical YouTube video is. I think it’s, if it’s over six minutes, people tend to piece out. You know, looking at a tweet or Instagram or Facebook. I mean, how often do you sit down and read a blog post or half an hour or an hour, or people like Joe Rogan who have like a two-hour podcast? When else can you have your ideal client kind of captive for whatever period of time you want to have them captive? It’s amazing that the people still have the attention span for podcasts and if anything, it’s growing that they want this deeper content.
[JP MCAVOY]: Yes, absolutely. I mean, I don’t know about you or where you’re listening to yours, but mine come on automatically as I get into the car. And so, I designed my podcast around the commute and I know a lot of my clients will listen to me on the way to my office. It’s really powerful and when you talk about that, I mean, my hourly rate is 400 bucks an hour. I’ve got many of my guests that charge at least that. And so, we’ll sit down and talk for 40 minutes, you know, the length of an average commute about a subject matter that’s probably quite relevant to a business owner who, you know, is just somebody looking to develop their business. And, they come into the meetings with me where they’ve actually perhaps listened to a subject I’ve talked about. So, there’s someone educated, it makes the process more efficient, and they have had the benefit of myself and perhaps one of the experts I’ve had on my show as well.
[JOE]: And I would imagine then they’re more primed to work with you if it’s a, you know, initial call or initial meeting if they’ve listened to your podcast and saw all the work you’re doing. I would guess that your conversion rates are much higher than maybe they were before the podcast.
[JP MCAVOY]: Yes, that’s one I’ve thought about and tried to measure because I find the difference is that people walk in and they feel as though they know me already. I mean, we, it’s almost become a cliché where people say, you know, no, like, you know, trust the person you’re going to work with. I feel like a lot of people have come in and they’ve listened to a couple of things that they’ve heard me say on either my show or another show and perhaps they found me through that. Or if they found me through some other ways, they’ve had a look at things and they walk in and it makes the time more efficient, certainly, it makes it so that as I say, there’s sometimes even educating in the process so that there’s not a requirement for me to educate to get to a decision. When you talk about conversion, I find that a lot of times people come to see me they’re already committed. In fact, for most times if I’m sitting down with somebody, they’ve actually already paid a retainer to sit down with me. So, it’s the retainer process, is sped up. Let’s say it’s become more efficient because they realize they do want to do the work and they’re getting to the yes point much quicker than they might otherwise.
[JOE]: Yes. So, what, what maybe three tips would you give people that specifically want to build a local business? I’m picturing someone that, you know, say they have a practice in New York or LA or Idaho, some random place that they’re saying, “I don’t, I’m not going to expand to multiple states. I’m going to mostly stay in my state because of maybe licensure but I want to attract kind of higher-end clients through my podcasts.” Are there maybe three tips or so that you’d say they definitely should focus on these types of guests, they should focus on this type of SEO? Like what advice would you give them if they’re starting a podcast specifically to build a local business?
[JP MCAVOY]: Yes, great question, Joe and, it’s the type of answer that I give to clients that are looking to develop any type of business in a specific area. I say to them right from the beginning, imagine what you want your business to look like. Imagine what you want your podcast to look like and then become that or start acting as that and then go to those types of people and go to where those type of people are. So, if a counselor is looking to let’s say develop a practice that actually caters to professionals, then design yourself as that counselor. You know, brand yourself that way, develop your podcast that way, and then go to where those people are, participate in their networking events and advertise to them specifically. So, in that way, holding yourself out to be making yourself known and then participating there, what will occur is, what we described before is you’ll start getting some of these the specific types of person that you’re looking for. They’ll tell a few other people as well and your presence will be created and continue on from there. So that’s one way. Go to where these people are after you’ve created yourself as the go-to person for them.
[JOE]: Now, that’s so awesome. Now I know one area of expertise that you have is in selling a business. Last June I sold my counseling practice and walked through that process. What tips do you have around kind of positioning a business to be sold?
[JP MCAVOY]: Yes, great question. And you know, this goes back to the, you know, the power of the podcast because as I say, as an attorney certainly assisting people grow, but it’s the sale of the business that is potentially the most lucrative time for the seller for the, the professionals participating, and the purchaser if they’re able to take the business to the next level and do it again. And so, for myself as I coach people through that kind of process it’s, and I know for yourself you did this, you have to think about the day, the eventuality where you are no longer a part of the business. If you’re able to do that and put processes into place and a structure into a place that allows that to occur, first of all, your business is going to be worth more and secondly, it’s going to be more attractive to others. Others are going to want to purchase it.
So, the real key thing is to put structures and processes in place that allow you to actually exit the business. A lot of people are so involved in their business in running the day to day, but they don’t think about that. And as a consequence, they’re actually devaluing their business and they’re making it less attractive to others. So that’s the important thing. It’s to make sure that you think yourself, “As a CEO, as a potential seller of the business, what does that look like and how do I extricate myself from the business at the appropriate time?”
[JOE]: Yes, I know Alison Pidgeon, one of our consultants, she hasn’t sold her business, but she has retired from doing counseling. She just realized that the consulting and growing other businesses was more exciting for her, and so even just saying, “I’m going to step back from my business and stop in once a month or, have a weekly phone call with my admin,” really figuring out how to step back from it, I think is so important. For me, the year or so before selling the business I got down to about one client a week and it was a client that kind of needed that extra help, but you know, the money was coming in through the clinicians, not through myself. And so, it was a lot easier to say, “Well, let’s value this company and I’m not really part of the equation in regards to this company.”
[JP MCAVOY]: That’s right. As you go to sell, you might consult. Teach the processes that you put into place for a period of time to ensure there’s a healthy transition. But yes, making it clear that the business will go on without you. That allows you to actually sell it.
[JOE]: Yes. What other things can people do to prepare for selling if they’re, say three to five years out from wanting to sell their business?
[JP MCAVOY]: Okay, so I mean, from, I put my legal hat on as you asked me that question right away, and structured for sale, is obviously another very key thing. So, ideally somebody is incorporated depending on the level of, I guess the valuation of the business and the potential sale, they can structure it by way of a holding corporation or family trust and multiply capital gains. So again, if there’s a significant event, a significant value to the business. There’s a way of structuring things. Those structures typically need to be put in place two years prior to a sale. So, two years prior to a sale, a structure needs to be put in place which, 50% of the assets of the business are being used for active business purposes and then 90% of those assets need to be in place on the date of sale.
So, when you say three to five years, certainly ensuring that the structure is in place, ideally well, ideally at least two years in advance and even longer. And then similarly on the accounting side, we do a lot of work with the accounts as we’re going to sell businesses, is ensuring that the financials are in good shape as well. So ideally and most purchasers are going to look to at least three years of financials prior to a sale. So, when you’re saying that three to five, making sure there’s at least three years of good finances in place for a potential purchaser.
[JOE]: Man, it’s such good advice covering podcasting, covering selling a business, leveling up your career. JP, if every private practitioner in the world were listening right now, what would you want them to know?
[JP MCAVOY]: Great question, Joe. For me, and this is the thing that I had the most difficulty with making people understand, is consult your advisors early, earlier in the process. People always wait until they have a problem and it’s always reactionary. Especially as an attorney, I hear from people when there’s a problem or they have a potential purchaser. And as we just described, ideally, I’m talking two to three years in advance. So if there’s one thing I could say to people is get advice early, get it off and get it early so that you’re establishing the proper foundation and you’re putting the steps into place very earlier on that are going to allow you to have the success you’re looking for. So, if there’s one thing that I’d say to somebody is get advice early.
[JOE]: Awesome. And JP, if people want to follow your work, hear more about your podcast work with you, what’s the best next steps for them?
[JP MCAVOY]: Oh, thanks so much for the show. Yes, so of course the podcast we’ve described here, it’s called The Millionaire’s Lawyer. So, you’ll just see The Millionaire’s Lawyer. It’s available on all platforms. You can also find it on my personal website, which is jpmcavoy.com. JP McAvoy is spelled J P M C A V O Y.com, jpmcavoy.com. We’ve got Millionaire’s Assessment, some other reference materials on there for people that are interested. Of course, feel free to listen to the podcast. And if they’re more traditional law feel free to go through the law firm, which is conductlaw.com, traditional corporate law practice. And then we also do some business consulting advice through CPLSPA. That’s C P L S P A.
[JOE]: Awesome. We’ll put links to all of those things in the show notes just in case you’re out for a run or doing dishes or something. JP, thank you so much for being on the Practice of the Practice podcast.
[JP MCAVOY]: Joe, it’s been an absolute pleasure. I look forward to the next chance we get to connect.
Awesome. I just love when interviews go like that. You know, to have someone that’s just so authentic, so down to earth, and has such a great way of viewing the world it’s just so exciting because I feel like we were putting this box of you’re just supposed to do clinical work in this way, but the reality is we can create whatever we want to create and we can use these amazing skills and education we have to impact the world beyond just sitting in the chair. So, if you’re interested in any of our Done For You Podcasting, we’re helping people launch podcasts. You’ll be hearing more about practiceofthepractice.com/network, the Practice of the Practice podcast network where, this year we’re doing eight podcasts that we’re launching in the beginning of 2020. We’re doing interviews right now for the next cohort of Done For You folks.
And you know, we do everything. You basically get to show up, record your podcast and then be as involved as you want to. We do consulting each month together to make sure you stay on track. We have kind of a basic formula of what is going to help you get there fastest. And so, if you’re interested in that, go over to practice [coughs] I’m sorry, tried to hold back that cough and it got really weird there for a second like … Go to practiceofthepractice.com/apply and you can apply there and then we’ll chat about if the Done For You is for you.
Also, if you want to rank higher in Google, you have to go over to simplifiedseoconsulting.com/joe. They are amazing, Jessica is amazing, her whole team is just doing so much to help clinicians’ websites rank higher. She is someone that sat on the couches at Slow Down School, just helping people with their SEO and discovered that she had a business in front of her and to see her go from sitting on the couches in Northern Michigan at Slow Down School to this is just amazing. So again, simplifiedseoconsulting.com/joe.
Thanks for letting me into your ears and into your brain. Have an awesome day. Special thanks to the band Silence is Sexy for your intro music. We really like it. And this podcast is designed to provide accurate and authoritative information in regard to the subject matter covered. It is given with the understanding that neither the host, the publisher, or the guests are rendering legal, accounting, clinical, or other professional information. If you want a professional, you should find one.