We're now about halfway through football season, and the competition among the elite teams is getting fierce. If you are an elite team, everyone is gunning for you. And your success or failure is being played out in a very public forum. Imagine the intense scrutiny coaches and players experience each week. Sort of makes you thankful that your job performance isn't telecast, right?

However, your career direction is no less important. If you are an avid fan, you likely commit 10-15 hours per week to watching the big games that you follow. So how much time do you spend thinking about your career and where you want to be in the next 5 to 10 years? That's what I thought.

This brings us to the crux of the issue. If you are a younger, aggressive producer, how can you become an agency owner or practice leader? Perhaps that's a vague goal on the other end of the playing field that you have for yourself. But with appropriate planning, preparation and sacrifice now, you can make that a reality in the future. You can, in fact, not only play the game, but also take home the trophy. But it requires preparation and dedication.

"Football is like life - it requires perseverance, self-denial, hard work, sacrifice, dedication and respect for authority." - Vince Lombardi

So where should you start? Well, first, is this an important goal for you personally, either from an achievement perspective or for your family's financial security? If it is, you will be more likely to be realistic about how driven you will be to achieve your goal and about how much you are willing to sacrifice. Be honest with yourself, and seek the advice of your spouse or significant other since you will need their support. Ask for candid input from any trusted advisers you may have.

Next, prepare yourself for a frank business discussion with the current owner of your firm or the current practice leader. You need to have your thoughts organized in a logical and rational manner. And this conversation will require some tact and diplomacy. Consider that for the current owner, any discussion about the disposition of the business is both a financial and emotional issue. You don't want to appear too anxious to have that person out of the picture, nor do you want to offend them with your intent. You want this to be a collaborative discussion about what's in the best interests of the business as an ongoing business enterprise, as well as what's best for the owner(s), employees and clients.

Be prepared to have a discussion about the future of the firm over the next 5 to 10 years. What are the "big picture" strategic goals? Is there a possibility of a merger or sale? What are the plans for the disposition of the business asset? Is there a succession plan in place? What are the expectations from a business continuation perspective? And what is the "exit strategy" of the owner(s)? I suggest drafting bullet point notes so that you are mentally prepared with succinct, well-conceived questions. In addition, you will want to effectively articulate any ideas that you have to contribute to the discussion relative to the future disposition of the business.

You also need to be prepared to talk about the option you might want to propose. After all, the owner might surprise you and say: "Why are you interested in taking over this business?" You don't want to be unprepared if this opportunity presents itself. And consider that your prompting this discussion might come as a surprise to the owner, since the perception might be that you are quite content being an employee with no ownership aspirations. Consequently, "watch what you ask for." You need to realistically evaluate whether you want the personal and financial responsibility of ownership. This will require some soul-searching on your part.

You also might consider creating some financial projections. In other words, you are going to have to invest some additional time, thought and effort into developing a plan for the orderly transition of the business that has some realistic, financial underpinnings. After all, no one is going to turn over their business to you and not have an expectation about "what's in it for them". So it's going to take some effort and sacrifice on your part to develop a realistic plan. However, as with everything in life, if it's worthwhile, it's worth the effort.

"The dictionary is the only place that success comes before work. Hard work is the price we must pay for success. I think you can accomplish anything if you're willing to pay the price." - Vince Lombardi

So what are you going to propose? And what is your rationale? Hopefully, you have some idea of the value of the business or book of business. If not, seek professional advice; feel free to contact us for additional insight. You really don't want to embark upon your most significant financial transaction of your life without being informed. Remember, it's never about the price; it's always about the terms. If you don't understand that concept, then you really need expert counsel at least to start.

I'm assuming, quite logically, that you do not have the financial wherewithal to consummate an all cash transaction today. So what are your options? Well, there are several that immediately come to mind

You might be in a position to pay a sum of cash immediately that would represent a down payment toward a purchase with the balance paid-out over a number of years as an earn-out.

That is frequently a deal structure in these types of transactions. Or the business might lend you the money, or co-sign a commercial loan, to purchase the business, and the loan would be paid from future earnings. In either case, the owner would need to have confidence in your ability to manage the firm as they would be sharing in the business risk going forward.

Alternatively, you might propose freezing your current compensation level for the foreseeable future, and paying 50% of any excess commissions generated over your compensation toward the purchase of equity in the business, based on the financial projections you create. You and the owner would be committed to a long-term ownership transition (perhaps over 10 years), and you would eventually become a majority shareholder.

At that point, you might consider obtaining a loan and buying the balance of the owner's equity (a balloon payment). In this instance, there is less risk for the current owner as the ownership transition period will generally be longer.

Another option would be to discuss the creation of an employee stock option plan (ESOP). You and perhaps other key members of the management team would purchase equity in the business during the course of the year with regular and systematic payments (often payroll deducted) in exchange for an increasing ownership interest over a number of years.

An ESOP can also provide the current owner with significant tax advantages when structured appropriately. On the other hand, there are ongoing, administrative expenses associated with an ESOP and the attendant plan trust that is established.

As you can see, there are a number of options that you can consider and then mutually explore with the current owner. As a reminder, the terms are always more important than the price in any transaction. Structuring an equitable deal that is fair to both parties requires measured thought, artful creativity, and an understanding of human nature. But it is entirely possible to structure an ownership transition plan that is mutually beneficial.

"The difference between a successful person and others is not a lack of strength, not a lack of knowledge, but rather a lack of will." - Vince Lombardi

Where there is a will, there is a way. So focus your energies and think about creating a winning formula for success for the current owner, you, the employees, and the clients. Now that's a win-win-win-win in any game.

Kwicien is managing partner at Baltimore-based Daymark Advisors. he can be reached at jkwicien@daymarkadvisors.com.

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