Transition Planning and Firm Valuation with Jeff Krieger | EP674

0:00Essentially, bringing on a partner, you have to think of it as though they are the principal owner of the business and they have to have the skillset required of a firm owner. Hello, architect nation and welcome back. This is the right place for you if you run an architectural practice. On today's episode, you'll discover the sellable firm Lytmus test. Five, signals buyers can actually pay for, hint your awardable is in one of them, and the simple way to turn last year's profit into tomorrow's valuation bump. The five to ten year buy-out playbook, how one owner's structured an internal sale, so that the successor could afford it and the seller still wins, including the annual revaluation twist that protects both sides. Goodwill, name changes and letting go. This, the invisible assets that add dollars to your deal, when to put your partner's name on the door and the counter-intuitive move that makes clients trust the transition. In today's episode, I sit down with Jeff Krieger, founder of Krieger Associate Architects and alum of Venturi Scot Brown,

1:04whose four decade career spans award-winning commercial residential and institutional work across the USA and abroad. A registered architect since 1985 and longtime Drexel design tutor, Jeff blends battle-tested firm leadership with a teacher's clarity. We dig into the lessons behind building a durable practice, the craft that ensures and what nearly 40 years at the helm teach about value, legacy and growth. BIM can be important for your next project, but it's not the only thing you need for your next project. That's why it's important that 95% of manufacturers who offer free BIM files on our cat also offer another type of data your project needs. That means 95% of the products with BIM also have cat files and are in a specification, in a patented spec wizard and or have product information to help you make the right selection. So stop going to a site with just BIM and go to rcat.com to get everything you need for your next project for free BIM without registering. That's rcatarct.com. Jeff, welcome to the Business and Architecture podcast.

2:11Yes, again, one of our one of our firm favorites here. How are you? I'm well, Ryan and thanks for inviting me. It's always good to speak with you and to pick your mind for the architectural business wisdom that you've accumulated over the years and share it with our valued audience and listeners here. So obviously you've been on the show a number of times. You've got an amazing history in your in your firm. You've got over four nearly four decades in practice. You worked at Venturi Scott and Brown. You've been running your own practice for over 30, 30 or so years. You've been architect developer. We had a very you gave us a really good candid description of that entire process last time you were on the show. That was very enlightening and very moving. And today the topic slightly different is we're going to be talking about maximizing your firm's value and actually talking about what does a transition plan look like?

3:16How do you find buyers? How do you what sorts of things you take into account to increase the value of your firm? But first, I'd like to just quickly touch base with you on on development. And last time we spoke, I think you were just about to sell the property or you just sold it. Yes, I sold the property just about one year ago, about a year ago. And at the time you were like not going to do it again, but there was a but has the but matured into anything else? No, not yet. As I may have mentioned last time, if I do any more real estate development, it will have to be without notifying my wife. You do on the slide. You do when the property sold and should have a nice about it. Right, right. Brilliant. It was a great experience. I learned a lot, which is why I would consider it

4:21doing it again, but I would have a different perspective now having been through it and having it turned out to be not a profitable undertaking. So it would be a lot more cautious the next time. It was a really good story that you told last time, because I think it really woke a lot of people up as well about the desire to be architect developer for a lot of people. And they have this for a long time. And my suspicion is that a lot of the time, that desire to be architect developer is not necessarily a desire to be a developer. It's more a desire to just have have a great client and do what you want to do. And maybe if there were better clients, or we were able to attract better clients, then maybe that desire would be quelled a little bit. Right. I would say it's not uncommon to find out that you may be your own worst client.

5:26And that's very insightful. So let's pivot to talking about transition planning and maximizing your firm's value. Perhaps you can give us a little bit of context about where you're at and kind of just remind us remind the audience perhaps this is the first time of hearing about you. It has a little bit about your practice and why transition planning has become something that you actively started to engage in and etc. Right. So if you're a firm owner regardless of the size of the firm, regardless of what niche you're in, whether you're an architect, a landscape architect, interior designer or engineer, you have the following options when it comes to exit planning. So number one, you can retire early, shut the door and just wait for

6:29those social security checks to roll in. Number two, you can die at your desk. Right. Someone else will then have to close the door for you and your beneficiaries will be left to dispose of your assets and clean up the mess that you've left behind. Number three, you can change careers entirely. Or number four, you can sell your firm and hope that there's a willing buyer out there. For me, looking at those four options, I just decided for a host of reasons that I wanted to pursue number four. And it might be good just to discuss what the motivation is as to why you may want to sell your firm. Yeah. Options one, two, or three. Yeah. Perhaps you could talk a little bit about why one, two, and three were discounted

7:29when you chose not to go with those. Right. So I still I love what I do and I wanted to keep doing it and I didn't want to retire early. On the other hand, I didn't want to do it until I died at my desk. You know, as you age, you have to start thinking about what what are your partners wishes? Maybe your partner has retired. That doesn't, you know, would prefer that you not work full time. Maybe you have some health issues. So for me, retiring early wasn't really an option. I certainly didn't want to die at my desk and I had no concept of what an alternative career would be for me because I've only done architecture and I want to stay with it. So that just left selling the firm as an option. And the reasons that anyone might consider selling your firm as

8:38opposed to the other alternatives is there is the possibility, but not the certainty of a financial reward and sell your business. Another compelling reason could be an altruistic one. If you have employees, you may want to ensure that they keep or kept employed or you may have somebody that you've brought along that you think would be a suitable candidate to take over the firm. So just having a sense that you don't want to just send out a pink slip and tell your staff that that they're you're done can can be a positive motivation. And lastly, I think for many architects and designers, it's also about leaving a legacy that you've worked for a long time. You've got about a decent body of work and that because we're in the built environment that work will endure

9:43for a long long time after we're gone after no longer practicing. And but if you want that work to carry on and then you need to find someone else to take the firm over. For me, it was all those things. It was the possibility of financial award. It's making sure that my staff is is taking care of and it's just this personal sense of leaving a legacy. So once you've decided that was the right strategy for you, what kind of things do you start needing to do to prepare your firm to make it sellable basically? And what's the difference between a firm that is sellable when one is not sellable? So there's a lot of reasons why your firm may have sufficient value to be acquired.

10:44And again, we can talk about this more, but you can have an internal sale meaning you sell the company to one or more employees or you can have an external sale where an outside entity purchases your business. But there has to be value there, real or perceived value, okay? And you know, essentially somebody else has to has to be willing to pay you for your firm and they may be the arbiters of what that value is to that. So you can generate value a lot of different ways. First and probably most important one is are you consistently profitable? But it can also mean involve, do you have really efficient processes that it would be valuable

11:48to someone else? If you have those processes that may be the reason why you're also profitable. But you might be profitable without having an efficient set of processes. Lots of repeat clients. That's that's the value, tremendous value. You have the type of work you do means that you have a lot of repeat clients because the firm owner may not be involved in acquiring new work. So that's really important to it for an internal or external sale. If you have a particular specialization, a really well-defined niche or certain geographic area that you work in that could be attractive to somebody trying to break into that niche or that geographic area. That can add value. I mentioned profitability and it has to be consistent and lots of good cash flow.

12:49Lots of work and process. It also has monetary value. Then the other thing that I learned going through this process was there's something called goodwill. Goodwill is essentially the value that someone applies to your intangible assets. These other things I mentioned can be measured one way or another. But your goodwill could be your intellectual property, your brand recognition, your ability to track future work. So the goodwill encompass things like your historic portfolio of work and the different. Yeah. Yeah, particular expertise, proprietary, software or processes. It's really hard to put a dollar value on. It's considered goodwill, but there are

13:52methods of putting a dollar value to goodwill. That's quite an interesting one. A lot of firm owners when they go through this process of valuing the company. They might be very myopic on focusing on the historic portfolio of the firm. Obviously, for an architect, that's what your heart and soul has gone into a lot of the time. But it becomes quite difficult to value that particularly, let's say you haven't got a pipeline of work right now and you've made any profit for the last three years. It doesn't matter how good the buildings were. When we're looking at it on a balance sheet, it's not going to be valuable. Exactly. So anyone interested in selling their firm or someone who's interested in buying into a firm, you need to understand what it is that creates value. What would you have to look at this through the buyer's eyes?

14:55Right. And as you mentioned, Ryan, a terrific portfolio of work and a design award you won five years ago, that that not likely to actually be perceived as valuable to a prospective buyer. That's I think that's really interesting as well because a lot of firm firm owners and interested to hear your take on this when they go through a valuation or when they might work with an external consultant to help them kind of put a formula to quantifying the value of the firm can often be surprised at what the actual valuation comes out at. If that's you could walk us through, did you were you working with an external consultant to kind of bring the value to the firm? Was it in alignment with what you were expecting or was it more or less? Right. So I knew enough to know that I was not the right person to do the valuation.

15:59And so we hired a consultant who did the firm valuation as you're aware. There's many different ways to to value a firm, but the key is simply that you select one and then you stick to it you're in and you're out. It's a valuation is it's not a one time thing. You do it and then you you redo it annually in post cases unless unless you're exiting in one go one go right. So we did hire a consultant after betting a couple and spent some time with them talking about the different valuation methods and when they did the initial valuation I was actually quite surprised it was higher than what I was expecting. So the good work had been doing, Jeff. Maybe so. Maybe not. So all those systems we spent ages implementing and the marketing funnels.

17:05Yeah. I mean, we did get credit for goodwill, but I'd say the primary reason that our initial valuation came in relatively high was we had we had a recent very banner year with a lot of profit and valuations typically look back at at least three and usually five years of prior profit and loss and balance sheet information. So if if you're break even or not profitable you're not going to get much in the way of evaluation number. We just we happen to have like one amazing one or two really amazing years recent years and the prior years not not so much. I think we actually even had we lost some money in 2021 during the pandemic start. But these profits are are weighted. So your most recent

18:10years are weighted much more heavily than prior years. Right. So our valuation just turned out to be higher than I had expected because the last two years were a lot more profitable than the previous three. And so you were saying there that actually that the valuation as well it can be done on a on a move is a moving target if the purchase is not going to happen all in one go. So I'm assuming here that what what you're looking at you would you were trying to find a buyer or most buyers that would be interested are either looking at buying the firm over five to 10 year period. If it's going to be internal. Right. And so the valuation might fluctuate. Yeah. So it might be a good time just to briefly explain my personal situation. Yeah. So I ended up doing an internal sale to someone who had been with me for 20 years. And I am I will no longer own any shares in the business from five years from the

19:19inception of the transition. So we're about two years in and each year my new partner buys more in more shares of the business until he owns a hundred percent after five years. In order to determine what those shares are worth we we do an annual valuation. So if we have a really poor performing year from a profit and loss standpoint the valuation will drop and what he requires the cost the cost of those shares that he's requiring will also drop. So it's incumbent on me to help make sure that that profit stays up because that money is flowing to to me. It's just quite it's quite a good safety mechanism for the for the buyer. I think so it is and because that my partner did not have a lot of

20:28outside resources to purchase the business once we had the valuation then we were able to look and see okay if if he buys a hundred percent of the business over five years and we continue to be as profitable as we had been then this is what this is what he would have to pay over that five year period. And that was that was an unfair burden for him given his financial situation. So at the recommendation of valuation consultant we we set up a scenario where he's actually paying me over a ten year period. And I won't go into the details but this means that it's not costing him as much on an annual basis to buy my shares and I'm getting income over a ten year period instead of five. And is he locking in a price for like the valuation of the shares

21:28so like let's say that you go you do really well in terms of profit that there's a kind of cap on how much the value of those shares might be. So that value changes annually based upon the valuation which is directly related to our profitability. There's also a good will factor as well. Right yeah so so I made it more affordable for a younger person to come in and acquire the firm and it also becomes part of my retirement income. When when when you were working with the valuation consultant did you hire them already knowing that you wanted to do an internal sale or did you hire them with the possibility that you know if it's a good number then maybe I might look externally as well.

22:30I was all but certain that I was going to do an internal sale and I had spoken with my now partner about this before we embarked upon the valuation and might be helpful for your listeners to know that more than 50% of our work is customer residential. We do have a mix of institutional and some commercial work but majority is customer residential has been for quite some time and getting an external buyer for a primarily customer residential firm is exceedingly difficult and I'm sure you know the reason why. It's a bit precarious on a number of levels right yeah yeah and I would say the single most important reason there is that you're you have very limited repeat work.

23:32If you're doing a residential practice you know you're lucky if you get to do two projects for same clients. Yeah so partly because of our emphasis on residential work and partly because I had a person who had been very loyal and dedicated and worked for me for a really long time I was almost entirely focused on an internal sale. And what sorts of preparation did the your partner have to go through in terms of being ready to purchase the firm and I'm assuming that you used one valuation company you didn't have a valuation and then the your partner had their own company doing a valuation that just starts to become a bit complicated but complicated and expensive. Yeah yeah so we had we had one valuation firm to the numbers and then we had a meeting with the person that prepared the valuation and my

24:35then-to-be partner where he explained sort of the whole methodology of the valuation and the timeline involved and how we were intending to structure the payouts over time. And then so for the incoming partner what's been some of the preparation that they've been going through in order to become an owner of the firm and how did and how have you sort of been bestowing the new responsibilities because it's been they've got the responsibility of being able to make the payments to buy the firm but then also being the owner from being an employee it's that's quite a transition. It is not everybody ready or willing I would say anyone contemplating an internal sale you have to identify candidates early and you have to matter them and you have to ensure that it's something they're interested in doing. You can have highly qualified people that just don't want the responsibility

25:42of running a firm. They make great employees but they just may not be great partners. But again you just you have to think about your own role as the firm owner of what you do and how do you impart those tasks and responsibilities to someone else. So that's why this takes years this is not something not a quick process and in our case I mean I've been working with this gentleman for a long long time so there was a basic rapport and understanding of how we do business and what our core values are and those I think he shared those core values. We talked about the type of work that we do. I discussed you know I said to him, imagine you're in charge. I'm on my way to

26:47Mallorca for six months. What could type of work do you want to do? How big of a firm do you want to have? How profitable do you want to be? We went through those scenarios so that I want so that I could be assured that our values and mission were in alignment. So I think that's an important conversation to have once you've identified someone could be a potential partner and then it became a matter of just slowly letting go of some of work that I do in getting him more involved in writing proposals and prospecting and I set up quarterly finance meetings and had him sit in on those finance meetings where we reviewed

27:48back our work and process and our P&L and our balance sheet and sort of gave him a crash course and financial literacy. Great. So that's one of the you know the the winning work aspect can often be a quite a big jump and particularly you know a firm like yours your names in the you know your names above the door the relationships your face it's a you know you're the there's a personal brand of Jeff which goes along with the with the firm and the clients have come to know and trust you what how was that like kind of taken into account with the valuation of the firm and then highlighted as a risk to the incoming incoming partner. Yeah well one thing that we are in the process of doing is actually changing the name of the firm okay okay so it has been Krieger

28:50Architects for decades now it's my partner's name last name will also be there I'm going to retain my name because that's what's recognized in a market but in five years or less he may drop my name that'll be that'll be his decision to make but changing the firm name I think is really important because when your partner's out there looking for work it's important for prospective clients to recognize that they're speaking with an owner. I don't want to sugarcoat this for any listeners it's not easy so finding a partner is hard letting go is really hard right especially if you have if you don't have haven't had a partner to this point you know I'm used to doing everything and all the weight and responsibility is on my shoulders and it's it's challenging personally to delegate

29:56right but if this is going to work I have to delegate and I have to become the strategic planner of the business and not the not the face-to-face contact the day-to-day contact I'm sorry I'm going to say not the day-to-day contact and not the face of the business that my partner has to start to assume that and it's it's very risky for both of us. What do you think this is going to work? For you personally what and it can's interesting you say that the delegation is actually really difficult because on the surface of it it sounds so logical and well of course I just hand over these tasks hooray I'm letting go I'm thinking about my orca what was it for you that was that's been so emotionally difficult in handing things over or letting go?

30:57Well some of it is just trusting your partner who that what you've been doing like when the when that job goes out for bid or for permitting like am I still checking over his work? I'm still responsible I am professionally responsible my name I'm still a part owner of the business and it's that's that's a hard one just to let go and know that my partner is sufficiently well trained that he probably don't I no longer need to check over his work and look over his shoulder but you know we just threw my dad into an assisted living facility in his in his

32:00early mid 90s and he said to me after we moved him in and then he also lost his driving privileges which was partly why we had to move him in to assist a living but he said to me in my siblings I don't like this because you're taking away my independence I'm losing control over my own choices of what I can and can't do and I've mentioned this because in some way that's what that's what this process is like okay I'm giving up my independence I'm losing control I just went on a an amazing trip to visit an architect friend of mine in Costa Rica who and we toured some of these incredible homes he's done at this resort and as far as the IRS is concerned it's a business trip

33:07but it's not fair to my partner claim that as a business expense so it's a personal expense that's that's a really hottest illustration but it just gets to the fact that you're no you're no longer making decisions without anyone else's input yeah and come but upon you to consult with your partner and that's again if you've if you've been a sole proprietor you've been the only owner of a small firm that's not an easy thing to do what would you do and abide by that person's intentions or desires if they if they differ from yours has it ever been a source of contention between you and your your partner has that I've ever been a point where he's been like Jeff seriously let go get out of the way let like I know what I'm doing I fully expect this to happen

34:10Ryan's and maybe he's waiting until he's 51% right now I'm still the majority shareholder and that but I think it also speaks to fact that we've just worked together for so long and we're just again we're highly compatible in terms of our mission and vision of our use so those conflicts will arise but and they have arisen but we've been able to resolve them anecdibly and date and you started to mention there a little bit about how you know it feels like there's a sense of loss or a loss of autonomy and you know in many of my conversations when we've we've spoken about transitions one of the one of the big sort of anxieties a lot of firm owners have had is is in the relinquishing of the kind of financial data and allowing somebody else to kind of just get in and see how the business has been run you know sometimes there is this complication when a business has

35:13been run by a sole proprietor that there are lots of tax deductibles that are no longer you know they might not be passed as tax deductibles anymore because now you've got the business partner well how did that process work of like opening up the books to your business partner or had they already been transparent for a long time prior of moderately transparent but not fully open and for me at least that was not a concern right if it if your personality is such that you've got to keep all that financial information close to the vest and not share then it's probably not a good idea for you to to bring on a partner it's going to be difficult yeah you're really challenging yeah because they they have to they have to understand the finances it's in your best interest that they know how the firm operates and what to do to to continue on a profitable path and the way ours is structured which I don't think is is unique

36:16it's I benefit when my partner benefits and vice versa finance there's a financial reward for both of us to pull up our ores in the same direction so as you're going through this kind of 10 year buy out phase how is your role designed to shift and change and does it mean that your your income is shifting and changing as a result of taking on perhaps a different role and your new partner he becomes the managing director and takes a different salary and then perhaps there's a point where you're you're just taking revenue which is as a result of the purchase how how has that been designed so after in terms of finances my partner will own 100% of the business at the end of our five-year transition right he would be paying me for five additional years okay okay after that five-year initial five-year period we've written into our shareholder agreement

37:23that I can be employed at will okay so like a consultant I would be not consultant essentially he would and so it it'll be his determination as to whether or not he wants to keep me on and then what for me okay but I would I won't share in any of the profits yeah bored so but in terms of my role I am shifting out of day-to-day project management and into more marketing and strategic planning if it rolls and just starting to think what's next what markets should we be pursuing I will take a more active role in marketing initially just because I will have less project management responsibilities and but I can't be the sole marketer or else I leave

38:23then it goes to goes to crap so that's it and I'll be I'll be a mentor that's the other part of this to the staff and to my partner because I have to teach him what I know about the ups and downs and the pluses of minus as a running as a small practice and in terms of firms going back to the the the winning the work again you kind of identified that one of the things that make a small custom residential firm undesirable to an external buyer is the fact that the pipeline isn't as robust as if it were you were working with a string of family developers multi-family housing developers where they're just kind of fast their profession and how has work been won historically with the firm and is it a product of kind of a good marketing presence and visibility and then there are systems in place which you're just handing over or is it your network and then you're

39:26having to hand over your network to your new partner and make personal introductions and how is it how are you kind of navigating that migration or is it a set of skills that he's got to go out and develop and build out his new network of people well it's sort of it's all of the above I have encouraged him to build out his own network but most of our work historically and has come from my network going back to like multiple projects for college roommates his college roommates were all architects so that's a lousy network for getting work so it's I'll be sharing you know my some of my network and introducing in with some of the people in my network but simultaneously I mean I've given him some specific tasks as far as expanding his

40:26network and finding potential clients and he has brought some work in right which is great you know but I again I think the marketing if the seller has been the principal marketer then you have to identify a strategy for what happens when that seller exits just to keep the firm going and as I said earlier you know part of the reason I I wanted to do this was to have established a legacy that the firm keeps calling but I I'd say that's that's one of the toughest parts of this is that finding a partner that also has a knack for marketing because I can teach I can teach

41:28everything that you will teach in your courses about how to market but person has to have a certain personality and willingness and desire to go out and do it yeah a hunger for it yeah yeah and that's not most people yeah until the mortgage is G that's normally quite a good yeah yeah no no not only it gets everyone up and running but again that's that's quite interesting right like you know you you started the firm and there would have been a point in the in the early days where you just had to go out and knock on doors and do whatever it was to take to keep the lights on and yeah there would have been a certain amount of pressure and in a lot of ways that experience of like where everything is depending on on you to go out and win work is is quite a for a lot of people that can be a very meaningful experience because you just you it just forces you to have to go and do it the diversity of it is the thing that kind of builds the resilience and

42:32forces you out of your comfort zone and it's something is it can be a little bit more tricky when we've got new people coming in and the business is already operating and yeah and and and running that it's easy to ignore the winning the work aspect of it or take your foot off it or kind of become complacent with it right no I mean essentially bringing on a partner you have to think of it as though they are the the principal owner of the business and they have to have the skill set required of a firm owner or other people that have those skills but you know you've got to have marketing capabilities you've got to have the financial wear with all you have to be able to focus on your firm's profitability and you have to have the processes to run run the firm efficiently

43:33in it it applies whether you're a sole proprietor you have a dozen people working for you and I would say to your point you kind of have to have an entrepreneurial bet right yeah right because it's it is about risk taking and deciding you know what type of work you want to do in identifying new markets and finding new clients and purchasing new software and hardware and professional liability there's you know I'm all here listeners know there's a there's a as a big risk involved in in running up practice and and that partner that you may be seeking has to understand that except that can be willing to assume that that level of risk mm-hmm there'll be worth I'm I'd be intrigued to have a conversation with Adam in a couple of years

44:35time on the podcast as well to see here's take on the um it's like what's it yeah yeah they had no idea I was going to be facing this level of stress and but uh we'll say I mean I I hope he succeeds I wanted to succeed and I need to do what is in my power to ensure that he succeeds mm-hmm on the the other aspects of running the firm so the kind of systems and the finances and you know checking in profitability and um and you know identifying where there might be systematized operations that are needed to protect profit how has you know how has that responsibility been handed over or again was it something that was already you were doing a lot of anyway I think we're doing a lot of it anyhow there's always room for improvement but I think a lot of our uh workflow systems were already set up although as as you know you know the

45:39software continues to evolve and so therefore you're always making new processes mm-hmm we're we're going through a multi-year transition from AutoCAD to Revit and um that is painful mm-hmm that hurt but um but I've made a wise decision to not get involved in that piece of it so Adam he's he's in charge of seeing what that transition looks like and what resources we need to make that transition and establishing all the standards that um and processes for doing doing work a hundred percent in in Revit mm-hmm and so you as you were saying after five years then the first five years Adam becomes hundred percent uh owner he has the complete freedom then to do whatever he wishes to do with the firm he could change the name and I mean in theory here he could completely

46:44change the direction of the company to working on health cares or circuses whichever he chooses correct yeah yeah um in fact he could probably do that as soon as he owns 51% of the firm right right great and is that something you guys actively talk about like his his vision or does he have um he's he's kind of been sharing with you what he what he what he wants his leadership to look like and the direction of the firm so I mentioned that I've involved him in our finance meetings quarterly and I've also set up monthly partners meetings mm-hmm so we have an agenda and and we go through plan quarterly planning exercises I don't remember who taught me that maybe it was some some consultant somewhere picture so some consultant with a funny accent

47:45but yeah so we we do so big picture stuff and then we do in the weeds thanks so yeah we're we're constantly having those conversations about what type of work to go after and I I have to keep reminding him what kind of work Adam do you want to do that's the type of work you want to do then how do how do we go about acquiring those clients and so it's you know I'd like to say that it's you know it's it's a mutual discussion and decision-making process at this point mm-hmm great and and it's kind of a start wrapping up the conversation here a little bit um for you what's what's what's next so after you have you hit year five let's say Adams has Jeff Seah sure he won't I'm sure he won but let let's suppose and he did what what happens for you then is

48:45it complete retirement or a new foray what's the next adventure for Jeff I think I am going to my orchard for six months and just cycle cycle the island every day um my wife is retired recently and she she would like nothing more than for us to travel and um spend time with our grandchild soon to be grandchildren amazing they'll be more along the way so I think that's what's next for me is is a family time and travel and I may continue teaching I may continue just being involved in the firm on a very part-time basis but I'm you know I'm looking forward to it it'll be a bittersweet for me I can't not do anything like I just have to be active I may volunteer for

49:56to have a tattoo for humanity and or just do something that's still related to architecture on volunteer basis there's plenty of community organizations zoning boards historical commissions that I've been asked to join so hey you won't find me with my feet propped up on the coffee table sitting on the couch drinking margaritas and watching reality TV what much I can be sure so still be still be active I've always found an interest in actually when we look at some of the architects who practiced well in well basically they're the ones who died at their desk like a like um uh oscanemia or iampay and interestingly how their firms I mean they they still go for a transition point in their firm and you know iampay was interesting because he I think his last one of his last projects was he was working on a chapel and they kind of reserve those nice cute little

50:59project not cute that's not wrong but like there's a nice very significant meaningful projects for the for the for the leader or for that personality of the firm and the whole firm is now operating by itself anyway and it's almost like a little firm within the bigger firm and and then and then they've got a small team around them and they could just be completely you know that's their their you know passion projects that they get to get to work on nemyra I assume it was a very similar sort of thing because it's very difficult you know at the age of 85 to be the head of a you know just dealing with all of the stuff that you got to deal with running an architecture practice yeah i mean i made do some projects like that and as we discussed earlier i wouldn't completely rule out another foray into real estate development yeah but um mostly it will be just spending spending time with our kids and their kids and my spouse and uh i think i'm i will be ready to let go

52:11i mean i but it's i won't know for certain till we get there but i i don't i don't think i'm going to have buyers well i guess what his case we call sellers remorse in the project at the end of the transition amazing amazing well jeff thank you very much again for you're always so candid and um uh you know we really kind of open up behind the scenes of the and the the details behind the you know these processes in your in your business so i really appreciate you uh sharing that with us it's very insightful and uh thank you so much and i'll be looking to get Adam on the show next then okay well you're very welcome Ryan and you're you know you're a great interviewer and i just i hope that what we've discussed today is a some value to your listeners um one thing that i would like to mention maybe work this in earlier in the talk but in addition to evaluation it's something i highly recommend that you hire an attorney

53:19that's not only do you need the valuation but you need a shareholder agreement you need a stock purchase agreement and you need a shareholder agreement and those are two different documents the valuation consultant can help prepare the um valuation portion but um the stock purchase agreement but you you really should have an attorney help with the shareholder agreement because what that does is it forces you to address the what ifs if if if if i am incapacitated before the buyout is completed what happens if my partner is incapacitated before his portion of the of the acquisition and you know what happens if there's a dispute that can't be equitably resolved so that's where the attorney's document comes into play it you have to have something in writing that that deals with the unanticipated unexpected uh events

54:20and i guess that was the first time that you were there ever structured such a document because it was the first partner that you've had on so yeah right yep wise very wise brilliant well thank you much so much Jeff you're welcome awesome as always all right scope creep thrives in firms without clear systems telling every change into confusion conflict to compromise when your staff sees you bending the rules after telling them to hold the line everyone loses the scope creep first aid kit helps you align your with your team with firm wide standards and gives in the tools to say no without the awkwardness get this small practice tool 100% free by going to businessvoctation.com forward slash career. BIM can be important for your next project but it's not the only thing you need for your next project that's why it's important that 95% of manufacturers who offer free BIM files on our cat also offer another type of data your project needs that means 95% of the products with BIM also have cat files and are in a specification in a patented spec wizard and

55:23or have product information to help you make the right selection so stop going to a site with just BIM and go to arcad.com to get everything you need for your next project for free BIM without registering that's arcad ARCAT.com thank you to our recent listeners who left reviews with podcasts on iTunes you'll reviews help others find podcasts with a rising tide raises all boats to be nice on the show open the podcast app on your iPhone search business of architecture and after clicking on the show scroll all the way to the bottom and leave a review today's episode of the business market show is sponsored by smart practice TM the world's leading step-by-step solution for architecture practice owners that want to structure their existing practice so they can flex to your business doesn't get in the way of the architecture because you see it likely is in your architecture skills that holds you back it's the business aspects of running a practice managing projects and people dealing with clients contractors and money so if you're ready to quit being a glorified administrator and get back to the architecture again go to smart

56:25practice method.com to discover the proven simple and easy to implement smart practice method that is revolutionizing firm management for owners and teens Ryan Willard here and I'd like to thank you of course for joining us today and remind you that the views expressed on this show by guests to not necessarily represent those of the host and we make no representation promise guarantee pledge warranty contract bond or commitment except to help you conquer the world carpe dm