The Psychology of Tax Planning

Ep.#2 [THEME NINE] 

Are you thinking like an owner or an operator? 

Many entrepreneurs—even billionaires—can find it difficult to wear the "ownership" hat due to their involvement in operations, lack of knowledge about valuations, or because the boardroom doubles as the family kitchen table.

In this episode, join us as we explore the art of thinking like an owner with our special guest, and dear friend of mine, Brandon Henry, Founder of Mosaic Advisors. With extensive experience in managing over $3.5 billion in wealth for 25 families, Brandon has unique insights into the challenges and opportunities that come with wearing the "ownership" hat.

Discover how thinking like an owner can help you set clear goals, determine target equity valuations, and decide on income distributions. Learn how to align with partners, investors, and leadership teams to create a unified vision and work together effectively to achieve your business objectives.

Our conversation reveals that private businesses, regardless of size or resources, face similar challenges, and emphasizes the importance of clarity and goal-setting for successful alignment.

By adopting an owner's mindset, you can gain a deeper understanding of how your present decisions influence alignment with partners, contribute to long-term goals, and ensure that ownership objectives are effectively aligned with the leadership team's resources and capabilities. This is the essence of true alignment in a business.

// WATCH THE INTERVIEW ON YOUTUBE: Intentional Growth™ Podcast

What You Will Learn

• What it means to “think like an owner”.
• Why so many business owners - even the ultra wealthy - feel like they are not wealthy.
• How a good Board should work and why you should have one.
• Why so many entrepreneurs are “allergic” to a liquidity event (cash).
• The difference between an estate plan and a long-term wealth plan.
• Achieving ownership and leadership alignment is crucial for business success, and this can be done by setting a target equity valuation and determining income distributions.
• As an owner, you need to align with yourself, your partners, and investors, and ensure this alignment is communicated effectively to the leadership team.
• Clarity of goals and effective communication can help prevent conflicts and tensions arising from misalignment.
• Family-owned businesses face similar challenges to other businesses, but often have more dynamics and tension, which can make it a deterrent for A-Player executives if there is not a clear ownership strategy.

// Sign up for the Intentional Growth™ Starter Kit: the kit has intro videos on each of the 5 Intentional Growth™ Principles, the Intentional Growth™ Financial Scorecard along with videos reviewing a case study on how to project out the value of your company, and the entire Intentional Growth™ Podcast Library.

Bio:

Brandon is a founding partner at Mosaic. Prior to forming Mosaic, he was employed by some of the largest financial services firms in the country. This experience provided Brandon with the opportunity to work with hundreds of business owners, their families, and their professional advisory teams and, in turn, helped hone his skills in the areas of business, tax, charitable, and asset protection planning. He utilizes his intimate knowledge of the challenges facing successful families to help our clients deal with the myriad of issues and complications that come with success.

Born in Southern California, Brandon relocated to Houston in 2006 after completing his studies at California State University, San Bernardino. He has continued his professional development by participating in industry study groups, regularly attending technical conferences and earning multiple professional designations. In addition, Brandon has taught courses in business succession planning at Southern Methodist University & estate planning at the University of Houston. He also serves as a business mentor for the SURE™ Program – a non-profit sponsored by the University of Houston.

When not in the office or at the gym, Brandon is likely looking for his next action-packed adventure in a remote part of the world.

Interview Quotes:

15:19  - “As the philosopher Biggie Smalls said, ‘Mo money, mo problems.’” - Brandon Henry

19:09 - I’m always surprised how in-depth their [clients] questions are when transitioning into a family business. - Brandon Henry

23:54  - “When you wrap the legacy and the identity issues into the business, It becomes very difficult to analyze this like you would any investment.” - Brandon Henry

27:20  - “We’re getting really high value because we’re focusing on the outcomes, we’re not focused on all of the trappings of the board.” - Brandon Henry

29:54 - “To accomplish our goals, we need this much cash showing up as income.” - Brandon Henry

32:08  - “So build a good business–and then have choices.” - Brandon Henry and Ryan Tansom

33:08 - “Our average client has an allergy to cash.” - Brandon Henry

49:20 - “Our job is to help them narrow down the universe of unlimited options so they can make yes or no decisions and be actionable instead of becoming experts themselves.” - Brandon Henry

56:03 - “Make an effort to disentangle your ownership, board and CEO roles.” - Brandon Henry

1:11:09 - “All the tax and legal stuff, all the finance and business stuff is simple compared to the human dynamic in the family and amongst the executive crew.” -  Brandon Henry

1:11:15 - “Acknowledging emotional dynamics is a good first step [when estate planning].” -  Brandon Henry

Links and Resources:

Mosaic Advisors

brandon@mosaicadvisors.com

Intentional Growth™ Vision Board

Intentional Growth™ Online Training

Reach out to me if you have questions about the Intentional Growth™ Training or Fractional CFO services