Zero To A Hundred – Episode 1: Profits, Exits, And Tax Efficiency With Bill LaPiana!

Zero to a Hundred - Jarrod Guy Randolph | Bill LaPiana | Tax Efficiency

 

Hey there, Accelerators! 🚀 Welcome to “Zero to a Hundred,” where we take your business from zero to hero! This week, we’re chatting with Bill LaPiana of Paxton Financial. We’re diving deep into the nitty-gritty of making your business more profitable and tax-efficient.💡

Bill, a former college athlete turned financial wizard, spills the beans on how his competitive drive has shaped his career in wealth management.

🔹 What’s on the Menu:

  • Boosting your business profitability 📈
  • Crafting killer exit strategies 🚪
  • Smart tax moves to keep more cash in your pocket 💵

🔥 Why Tune In?

  • Real-world financial advice you can actually use
  • Practical tips to up your business game
  • Insight into managing and maximizing your business value

💬 Gem from Bill: “Cost is only an issue in the absence of value.”

📞 Get in Touch with Bill:

  • Phone: 212-967-4284
  • Email: wlapiana@paxtonfs.com

Don’t miss out—hit that subscribe button and let’s take your business from zero to a hundred! 💪🏽

Watch the episode here

 

Listen to the podcast here

 

Zero To A Hundred – Episode 1: Profits, Exits, And Tax Efficiency With Bill LaPiana!

Welcome, everybody, to Zero to A Hundred. We have Bill LaPiana of Paxton Financial, and we’re going to talk a little bit about creating more profitability in your business. What an exit could potentially look like? How to be tax efficient? All of the little tidbits that make your business worth more money. Bill, welcome.

John, how are you?

It’s great to see and have you. I had a long weekend and went to a Luke Comb’s concert. Tailgated in the parking lot. It was fun.

I was at bleak one and two last night. Got home a little password bedtime, but go out to boys, you’re coming with the men. That’s what we’re saying.

You get to a certain age in your life where you cannot hang. I will say, I’m very proud of myself. As are my friends at 40 years old, I shot-gunned my first beer on Saturday. Apparently, I did it like a pro. I am very proud of myself, but you have to find those times to relax and have fun, especially with family and friends with these crazy businesses that we run.

I agree.

Let’s dive in. I want to talk first. You were a competitive athlete in college. Let’s talk about how that competitive drive has translated into your financial business and wealth management as you are a wealth manager.

Competitive Drive And Financial Management

I appreciate that. I actually think it started before that. My parents, I didn’t want for anything, but I grew up very middle class and my father did not do well with money, actually followed chapter 11. There were a lot of things that he did financially that I look at looking backward, which drove me to that standpoint. Being a two-sport captain in high school and then playing college football at the University of Albany, that drive brought me to how I can help my colleagues and how I can increase their profitability. How I can bring value to their bottom line, most important.

Psychology Of Money And Managing Finances

That’s interesting that you say, because there’s so much psychology that goes around money and financial management. It’s one of the reasons why we have these conversations on Zero to A Hundred is to have a safe place for entrepreneurs who are successful in their businesses, but want to take them to the next level can have those real conversations. It’s something I struggled with for many years because growing up money to me was insert here, it was tough to get. Only certain people have had money. It was a struggle. It was a hustle.

My money management skills for the first decade of my career were awful. Even though I made great money, I wasn’t investing properly. I wasn’t dealing with my taxes properly, but now as an adult and a business owner of several businesses, I know what to do. The mindset has changed. When you’re dealing with your clients, the businesses that you advise, because you advise some pretty big businesses and you do some cool things with helping them exit, helping them wrap their head around tax efficiency, how do you help them set the right mindset to make sure that they’re managing their money well?

Tax Efficiency And Retirement Strategies

Very punchy. First of all, I’m a certified Exit Planner or a CEPA. One of my niches is helping clients with highly appreciated assets look to help the firm or mitigate at an exit, whether it’s some real estate, whether they’re selling the business, or whether they’re selling a multitude of strategies. My big philosophy in methodology is not what you make, it’s what you keep. When you’re talking about big to business owners, and through the biggest issues that come across in my experience, our employees and taxes. How do we help mitigate some of those strategies? Depending on the business owner and profitability. The first thing I’ll always ask is, do you have a pension sale?

They might say, “I have a 401(k).” I’m like, “That’s great. You’re putting away X amount of dollars a year, but what if I told you, let’s say the business owner is 50 years old, I could put you’re willing to put away 200,000-plus.” Now, like, “How come I never heard of this strategy before?” We talk about a risk approach, the time of the strategies, setting up a pension, whether it’s a profit-sharing plan, layered upon incomplete on top of it. Then that’s the first step into how I help litigate taxes through my business, A and then B I’m giving my ranking trial and giving my team a little bit of access here. It’s from that standpoint, that they appreciate that. It’s a way to bridge that gap from A to B.

You said that you have plans where a small business owner and small business owner relative, it could be. $3 million a year could be $30 million. Is that $200,000 that you would be putting away tax-free?

Nothing’s tax-free because I’m tax-free municipal bond next year or triple tax-free municipal bond. What happens depends on the size of the business, how many employees, and the demographic, there are a lot of things that go into it. We bring in a TPA, Third Third Party Administrator, and what we do is we take a census of the company. Say the company’s got 10 employees, 50 employees, whatever it may be.

We look at the demographic, the name, the job classification, salary, and so on and so on. We’ll then come back to them with the solution. “Here’s how much based on your age and demographic of the company you can put away and then you got to give to the rank and file.” Again, you could be keeping it over from 80%, 80%, probably to 90% of that, which are all tax deductible. It goes into a retirement account where you’re getting a tax deduction in front and it grows tax-deferred in a later chunk.

Common Mistakes In Financial Planning

That retirement account is actually really important because I know that a lot of the business owners that we work with just on the payment processing side always come and ask us questions. We have great relationships with them. They ask us how to create more efficiency. If we’re saving the money, it’s how do I invest this? Setting up a program like that, how long does it take? What do they need to prepare to be able to do it? Are there certain things that qualify for them? Like what’s the base level for a business owner to look at adding that program? I’m ass ing it’s not the only thing you do. It’s just an add-on.

Correct, that’s just one vertical. All it starts with is the conversation. I need you to tell me about it. Then it’s for them to give the census to the CFO or the outsource CFO of the company, they’ll come back to us with again, a spreadsheet of the breakdown of the company. Then we’ll give it to TPA, a third-party administrator, who then come back with an orissa or a little true plan, meaning that this is all done through the IRS. Here’s the max that we can do. Then we can back into that. Maybe I want to give a little bit more to Jean, maybe I want to give a little bit more to John, or whatever it may be but it’s all based on the demographic of the company.

Then from that standpoint, as the business owner, I get to put away the line of share. From that standpoint, again, depending on there are some formulas that go into it, but the older you are, the more you can put away. We can get more granular later juncture, but for a business owner who’s 50 years old, it has maybe 10, or 15 employees, depending on the demographic, they could put away 200 and maybe 300,000. It depends on the demographic, obviously, but it’s another way to mitigate and defer and invest their assets versus paying the angles and the IRS.

Real quick for those who are not familiar, with ERISA, give me the acronym, and give me a quick explanation.

ERISA is, it’s basically an IRS-approved strategy. I can email you the actual acronym, but it’s really based on when you have an ERISA-approved plan, it’s done by the IRS. For example, I say it’s tongue in cheek, but not really. OJ when he was alive, because he had his defined benefit plan from the NFL, was still getting payments in jail. If you get sued by an employee or employee or whatever it may be, those assets are saved from that standpoint.

It’s funny that you bring up OJ. Somebody else said that because of the retirement plan the insurance plan, and you might not be an expert in this, so forgive me, you can say past. He also had a lot of money coming in from his insurance policies that he had set up that they couldn’t touch.

Again, depending on how you structure the plan, some people believe you can put insurance in a plan. Now, if you look at most pensions like the FDNY, and the NYPD, the reason they get a guaranteed rate of return, and obviously I cannot say guaranteed in any investors we do based on rules and regulations, but that’s because it’s based on what the insurance companies are doing. Whether it’s annuities, whether it’s whole life, whether on that standpoint. Again, that’s a G word is not a word I like to use and cannot use due to regulation. To answer your question, yes, that’s typically how that works through insurance products.

I just looked it up because we like to do things in real time. The Employee Retirement Income Security Act of 1974. These are the minimum standards of the most voluntary established retirement and health plans and private industry, etc, etc. That’s getting way too complicated for me to try to explain over podcasts with this following the ERISA rules, you have the opportunity as a business owner that say is 50 years old, just as a benchmark to potentially be putting two, $300,000 away a year, and that’s creating more tax efficiency and allowing them to build for retirement. More quickly, correct?

Again, based on the demographics, always consult your accounting and your CPA, your tax team. Again, it all depends on the size of the business. You have 300 people. I don’t really consider it a small business at that point. It might be a different conversation, where if you have ten. If you have a younger staff versus an older staff, it might come at this in some things, but again, typically the older you are, the more money you can put away based on a risk of rules just by mathematics.

Let’s switch gears a little bit. By the way, great answer because I know you’ve got your securities licenses. Good job. You passed the test.

Helping Businesses Exit

Always consult people. There are no guarantees in general. Let’s talk a little bit about one of your expertise that you’ve done hundreds of times, which is helping businesses exit. A lot of the merchants that we work with, again, they’ve been in business for 5, 10, 15 years. They’re either looking to grow their business or some of them are at a stage where they’re saying, “I might want to exit this.” Not because they’re done with their entrepreneurial journey. They might want to try something new. They might believe that it’s the right time in the marketplace for them to sell their business.

Value Acceleration And Business Growth

If you want to create a successful exit, what is the best way to approach it for a business owner? It’s probably one of the biggest questions I get. The question always is, but you just said it. Do you want to grow or do you want to exit? We’ll bring people through a value acceleration methodology plan. If anything at the variable minimum, you’ll get clarity on where they are. For example, you might have a company doing 20 million in revenue, but their EVADE is really $2 million. Let’s say 80% of the client’s business comes from three clients, so they’re highly concentrated.

Their internals are a little messed up or they’re that on part. Their multiple might be say four. I’m choosing simple math here. “Bill, I’m doing 20 million a year in revenue, but if I have a two million dividend in my multiples four. I have an $8 million business.” That business owner might be making a million dollars a year through the business. Then I’ll say, “What’s your value gap or your profit gap?” If you’re pulling in a million dollars a year and you have $8 million and let’s say we defer all our taxis at 5% or 6%, you’re not hitting that benchmark.

It’s okay, like you said, do I want to grow it or will it exit? Now let’s get that EVADE from 2 million to 3 million and let’s try and get that multiple to turn four to 5 to 6, 7, 8, and now all of a sudden exponentially over a 2 to 3 year period exponentially tripled by business in essence. It’s going through those conversations and how to get those streamlined verticals in place.

I think this is one of the really important aspects of business. We hear, and I’ve got a book on my shelf behind me, Adam Coffey’s, The Private Equity Playbook, a great book. If you want to understand what exits look like, however, he talks about what I believe to be a lot of unicorns in that book, still a great book to understand how to create more value in your business to increase multiples. Obviously, it’s different for every industry, but how are multiples determined when you are valuing your business?

A multitude of ways. Where’s my revenue coming from? Where’s my working capital? Where’s my social capital? How my processes are in place and then getting into the X. These are all different areas that we focus on that we’ll have a conversation with the client and then we’ll talk about is your say your EVADE is a $2 million number, but really it might be 2.75. Why? Put my color on my country club, whatever it may be goes through the business.

You want to show that on your numbers from that standpoint. Again, getting from a four to eight multiple where now you’re the best in class. Again, I’d say rigorous, but it’s about a year-long process to get to that point to understand what we need to do. It’s taking 90 days sprints, it’s having workshops, it’s going through these processes to get to that next level so we can actually grow that business to have a higher mold.

When you create that multiple, your baseline, your EVADE, you’re looking at what your EVADE is at the end of the year, but you also have to define everything that you are currently expensing under the business. Your car, your country club membership, and your private jet are not there yet, but working on it. You have to add those back in because if you’re looking to exit the business, then somebody who’s valuing the business is going to look at that as income because they might not be considering that an expense.

When I sit down with clients just take a step further, let’s say, after we’re doing $2.5 million of EVADE. After it’s done, now I’m on multiple stores, that’s putting me at a $10 million valuation. I’m making a million dollars a year and I’m putting all of that through the business and then it’s from that standpoint.

Now at $10 million, and let’s say I now, I have solutions, which we do, and we can get into that next, how to defer taxes on the sale. 5% percent on $10 million, just a conservative number, that’s half a million dollars. Now, I have a massive value gap or profit gap of where I need to get to. How do I get to that million-dollar number so I’m feeling more comfortable?

Most business owners, when you look at it, I have what I call a Pacman effect where 70% to 80% of their net worth is in their business versus somebody else who says 50, 65, they’re diversified amongst different asset classes, but most business owners, 70% to 80% of their net worth is in that business.

Strategies To Increase Profitability

Before we go to the deferred taxes, let’s just talk about if there are any other strategies that business owners can employ to increase profitability when they’re looking at that one to three-year exit in their business.

There are solutions individually a business owner can do to help mitigate tax. Specific investments and things like that, which again, I don’t want to get into on this call, but that’s a conversation you can have offline where we have a solution where clients can get what’s called an above-the-line deduction. I see the above-the-line deduction, that’s W2KY Capital Deans, 1099. Get into an investment and they get passive income at a later structure. If they’re real estate owners and there are ways to do the TKZMD jobs act. There is depreciation. It’s not a one size fits all. It’s customized solution based on what the business owner is looking to accomplish with their time period. It’s about getting clarity and like we said before.

Growing and exiting a business is not a one-sided switch. It's truly customization based on what the business owner is looking to accomplish. Share on X

Deferred Taxes When Exiting A Business

Let’s touch on the deferral of taxes when you do look to exit a business. Give me in general, how you look at that. Then we can talk about some specifics if you would like.

Again, everything is customizable. I have a client, let’s say you have two parts, right? I had this happen to me, I had one client, who sold the business for X, and one client did what’s called a deferred sales trust with me, which we can get into a little more granular. Other clients wanted to pay some taxes and free up some cash, and then they put the rest into opportunity zones. Mind you, this was a couple of years ago. There is so much flexibility here that you can, if I need cash upfront, I’ll pay tax on that. With certain trunks, I can now have the flexibility to put as much as I want or as little into these trunks to help defer my taxes.

Then again, is getting your taxing, your attorneys and the key is you want everybody working for you. In my experience, a lot of times you have an insurance guy, you have a financial guy, you have a stock guy, you have a seat. Everybody’s not talking to each other. You want everybody on the same team blocking for you. Like I use a football analogy, you want to have your offensive line blocking for you. You want your tight end and your wide receiver, your running patterns, and are better than are going to work to get that first down. Then eventually get in the end zone. It’s working with the right team when you’re looking to get into the next round.

I think you just gave the audience a really key takeaway. That key takeaway is, that your team should be communicating with each other.

100%.

Your insurance broker, your financial advisor, your accountant, your banker, and it is not their job. It is your job to pull them together. It can be each quarter, it could be biannually, it could be once a year but everyone needs to create a strategy together. You already run a business, you have a lot of employees, you boss people around all day, exactly what to do. If you get one takeaway, all of your team members need to be communicating with each other that’s great advice.

You hit it around in the head. One thing being a CEPA, a good Certified Exit Planner, it’s not just financial advisors, there are CPAs or investment bankers or insurance brokers. Everybody in the CEPA world from the Edu Planning Institute, we all speak very similar languages. We understand specifically what is in the best interest of the claim. That’s the most important thing. It’s not about what my goal, his goal, her goal, whatever goal it is, it’s the business only goal. Then we got to come together and formulate that solution. Then execute.

I love it. Team teamwork makes the dream work. Let’s talk a little bit about getting granular on the options with the exit strategy. You talked about the DST. Is that the Delaware statutory stat? There are two DSTs, right? I’m not losing my mind.

Deferred Sales Trust And Tax Efficiency

No, you’re not. When we first met, you see, the Delaware statutory trust was a big part of my practice. Then obviously as you get more granular, as you start learning, and building more relationships, you realize there are other solutions out there. The Delaware Statute of Trustees is specifically designed for 1031 exchanges. Let’s say the business owner with a business and they have a piece of real estate attached to it and they don’t want to manage it, it gives them the ability to sell that property, defer their taxes, have it institutionally managed, and then collect cash flow.

When I say, not to deal with the time, tenants, and toilets, doing all the managing property, which most business owners don’t want to do. The second option, which is more thorough, can be done, which is much more flexible is the deferred sales trust. In a deferred sales trust, you can actually use this for your primary residence, you cannot buy another paying residence within the trust, full disclosure, useful artwork, you can give us for stocks, you can give us for it. It’s really any type of highly appreciated asset to look into for tax.

In a nutshell, it’s a structured installment sale. We use section 4-53 of the code. Then what happens is you set up a trust prior to the asset being into trust, the trust buys the asset in a cashless transaction and then he was ever buying that business instead buys the trust let’s use the number $10 million for this conversation. They’re just simple math. Now $10 million goes into the trust. There are fees that go into it across the board and then from that standpoint. Then now the trust owes a promissory note to the business owner and the legal leads pre or deed, whether it’s 9%, 8%, 7%, or 6%, they decide what the promissory note is.

At that juncture, I and a trustee who almost liked the way we designed and customized a portfolio specifically designed for that business owner. Now think of that trust like a supercharged IRA. Now I have $10 million in this trust. Everything is brain tax-deferred within the trust. Most people, when they sell their business, they need income. Then I’m going to design it. Let’s say that Cong gets 5% a year or half a million dollars in this conversation from that $10 million exit. I design it so that they’re going to have money coming in on a monthly and quarterly basis. Everything internally will be tax-deferred. There will be taxes on the money coming out, but that’s on the gross number where that $10 million number versus that $6 million-ish number what they would get if they did nothing in your plan.

Managing Multiple Owners In Exit Strategies

That’s a way to create some substantial DST, Deferred Sales Trust. Deferred Sales Trusts create more tax efficiency for your existing assets. This is something that is good for business owners. Speak to your financial experts or call Bill LaPiana. He can tell you exactly what to do. Bill, let’s talk a little bit before we get into a conversation on real estate and how they’re real estate is a value add for owning real estate, because of the depreciation for the owner.

I want to talk about partnerships. We’re not talking to new business owners for the most part. We’re talking to existing owners. When the conversation of exit comes up and you have multiple owners of the business, they’re not always on the same page. How do you deal with and really efficiently deal with or create boundaries or structure around getting to an exit or buying a partner out where it doesn’t become contentious? How do you get ahead of that?

Gently. Catch the monkey gently is my friend, pitiful. This is always up to doing your mental gymnastics. Again, depending on the dynamic, whether it’s a family business, or if it’s a family business, there might be some inter dynamics where you might have the grandfather who ran the business, and the father ran into another level. There all different types of dynamics. Let’s say you have two partners or three partners in this exam where you mentioned real estate in a 1031 transaction, you’ll see they’re all on an LLC, they have to go lock stamp into the next, into the next property.

I’m listening to what’s called the drop and swap. Jotting to a little tick, ten in common, and go separately. Then they can go to separate ways with selling a business, by using a deferred sales choice, each owner can go their separate ways. Have their separate trust. Then again, it’s not an all-or-nothing proposition. Let’s say I’m coming into 10 million. I want to 2 million upfront. I like I can pay the tax and I have other solutions.

You could talk about how to mitigate that a little bit. From that standpoint, everybody can say, “I only want to pay this tax. I don’t want to do this or whatever it may be.” Again, talk to your advisors, and talk to your tax team. Again, as we get granular and we’re into that point, that’s where we get very creative and use the red attorneys who know every nitty-gritty of the heavy solutions work.

What you’re saying is with an exit and you have multiple partners, each partner can do what they want to do with their proceeds. Let’s say we’ve got a situation where there are three partners, two partners want to exit, but one partner does not want to exit. What is the best way to value the business and structure a buyout for those two partners?

Again, one of the main things you want to do when you’re starting a business, and it even might be the back of a napkin, is to structure initially. The next thing that happens is we all look, I had a port now. We were a handshake tree in 2004. We grew it to a certain point. Then I got screwed eight weeks of Sunday because I wasn’t properly structured. Full disclosure. I could tell you everything not to do. Same personal experience.

That’s what I was alluding to Bill because I feel like a lot of entrepreneurs out there have built success and it wasn’t necessarily planned and they don’t actually have a real structure to solve problems or to create an exit with their partners. We’re midway through a business. We’re 10, or 15 years in, and one of the partners wants to exit or does not want to be involved anymore. How do you create a situation where everybody can get what they want without causing a legal battle?

Valuing A Business For Partner Buyouts

You’re going to have your tax team and your attorneys in place. You have to understand that. That’s number one. Then it’s okay. Let’s sit down. Let’s have a conversation. John and Jean might want to sell, but Joe doesn’t. Like you just said, how do we get to that? It’s understanding the value of the business going back to the multiple questions, what’s my social capital? What’s my working capital? What have you brought in? How has everything broken down? Do I have the proper processes in place where I’m being brought in? That’s attractive to somebody.

All these processes are great, but if it’s, “John Doe’s going to climb a mile in 12 years, that’s 80% of the revenue.” We don’t have any different conversations because private equity, as you know, is bonding up everything now, especially in the accounting world. It’s a black or white, it’s a little red. It’s like, “We want to do this, we want this many hours, we need to build, build, build, build, build. That’s the endpoint.” That’s the conversation you need to have. Then if John and Jean want to buy out Joe, then they have to come up with a number, what’s that number? It’s all based on an independent valuation. That’s the whole branch.

Partnership Dynamics And Equity Distribution

One thing that I have learned over the years is that no partnership is equal. The equity ownership should not be equal. It is really tough to go into a 50-50 partnership with anyone, even if it is your husband, wife, brother, sister, best friend. Be very careful. Make sure you clearly define what everybody is bringing to the table. In the beginning, figure out what that is worth so you don’t have issues over the long term.

Listen, I cannot introduce it more. I went through it personally. Back in the year 2004, I brought up with my partner at the time, I was 24 years old. I was like, “Here’s what we’re going to do.” Then you have a business crew, and then all of a sudden and he screwed me with Sunday and stole 80% of my book. I have to rebuild and you live and learn and it’s all about relationships. I cannot do anything more. Let the attorneys do that, pay the extra fees to make sure that it’s set up properly, and then how the process is in place. If the business doesn’t grow up, we anticipate it to at that exit juncture. We know exactly where vertical one, vertical two, and vertical three stand.

Tax Efficiency Through Real Estate Ownership

Sage advice from Bill LaPiana. Bill, I want to touch on real estate and then we’re going to go into our rapid-fire session. In terms of real estate, you’re a business owner. Obviously, as a business owner, you’re to 99, unless you’ve gotten to a place where you’re W2ing yourself. Talk to me about real estate ownership and how you create tax efficiency, the real estate ownership.

The reason I’m asking this question is, I listened to a great podcast that Alex Hormozi did, and he was talking about the founder of Panda Express, how he’s basically bought all of the real estate through depreciation and they’re making a billion dollars a year. He owns all his real estate on top of having the franchise, which I think he’s the only owner of the franchise. He basically pays no taxes because of the cost segregation and depreciation of the real estate asset. How does a business owner use physical real estate to create more tax efficiency?

You hit on the head. If you do watch the movie, The Founder, Michael Keaton, talks about all of you read Rich Dad, Poor Dad, and all these. There are different solutions out there on the green card down. There are so many different people out there that do that. Again, if you’re using geo-underdwining real estate you mentioned close to that, depending if it’s residential or commercial, you’re accelerating the depreciation schedule from 39.5 to 357. From that standpoint, you’re getting all that tax depreciation up to you depending on how much money there is in the building, you can then depreciate that down and collect income.

That income is highly tax efficient. When I’m talking to clients about real estate investments, we’re going to talk about whether if it’s fully taxable, we could put that into an IRA. If it’s not, let’s take advantage of the tax efficiency because say 7% of the time, the guys that you want in our clients might more be like 11% a tax equivalent yield, because we get that depreciation past you to me as a “direct owner.” That accelerated depreciation allows you to offset your income. Correct me if I’m wrong, you can carry that forward as well. Correct? Again, I would always talk to your tax sheet tax team on that, depending on the solution, that could be the case, but I have always been saying, I’ll do your tax accountant from my standpoint.

Depending on the amount of money invested in the building, you can depreciate it over time and generate income, which is highly tax-efficient. Share on X

Talk to your tax accountant. If you’re not familiar with accelerated depreciation or cost segregation, it can be a massive value add. Especially if you’re looking to invest in real estate where you are operating your business or invest in real estate period. It’s something that could potentially offset your income, but speak to the experts. Let’s dive into our rapid fire. We’ll go quick here. I want you to just give me the answers off the cuff. Here we go. PH balance water or diet Coke?

Warp.

Rabbit or turtle.

Rabbit.

Little green plastic army men or Sega Genesis.

Sega. NBA Jam was much better on second team and it was on Super Nintendo.

Was Grand Theft Auto originally on Sega?

I think it was PlayStation.

That was PlayStation. If you can only grab one weapon or item during a zombie apocalypse, what would it be?

Yes, the machine gun.

Quote or phrase that you think about often.

Cost is the only issue in the act of value.

Cost is only an issue in the absence of value. Slam dunk. That’s awesome. Favorite movie or streaming series?

'Cost is only an issue in the absence of value.' Share on X

Good shows are up there. Godfather, Wolf of Wall Street was a favorite of mine growing up, obviously. Streaming. House of Dragons and Game of Thrones.

Wait, hold on. First of all, yes, that’s a must. Godfather. Tell me you’ve seen the offer. It’s a series.

I had not seen that and I’ve heard about it. A couple of years ago came out, right?

It was about a year ago. It was the story of the making of the Godfather. It is absolutely not what you expect. It was one of the coolest streaming things that are out there that I’ve watched in a long time. I highly recommend it. It’ll have you at the edge of your seat because apparently it’s a pretty real account and you’d be fascinated to hear how it went. Watch.

It’s funny, I ran up on it. My daughter’s 12, my son’s 10, we’re running up, we’re in his blood. There’s not a lot of downtime. We’ll be looking to that, yes.

Put it on your list.

100%.

Dead or alive, if you could pick anyone, who would you have dinner with tonight?

George Washington.

Why?

His father or country.

Good answer.

The Constitution is the greatest document ever assembled. The fact that what it’s done and now with everything that’s going on, I’m going to stay apolitical here, but it’s a document that’s 200 plus years old that still stands today. It’s giving power to the people. It’s a really brilliant document and I would love to be George Washington who’s the father of our country.

The Constitution is the greatest document ever assembled. It is a document that is over 200 years old and still stands today. Share on X

Beautiful. Awesome. You’re a small business. You’re doing 10 million in annual sales and someone walks in and hands you a $300,000 check. What would you advise them to do to 10X their business with that $300,000?

10X their business?

10X their business.

Reinvest in the practice.

Where would you reinvest it in the practice?

As an investment advisor, I cannot tend it to business without taking on significant, significant risk by venture or whatever it may be. As a business owner, like we said before, if I’m doing 10 million a year revenue, got two million EVADE, my multiple’s four, let’s get that multiple to eight and then EVADE up, and that could exponentially grow that profit. How do I do that? Invest in my team.

That’s fascinating. It’s not necessarily dollar for dollar. It’s creating more residual value. When you are a value company based on a multiple actually gets you to that 10 extra.

Social capital and working capital is really what comes into play here. It’s like, how do I grow my business? I’m looking at Mr. Polity if I’m private equity and buying your company. Like I said before, 80% of my revenue is changed in three clients. That might be a big red flick. If I’m the judge, jury, and executioner, I’m the top sales guy in the company, and I’m running the company, that’s a red flick. What happens if I’m not there? The key is that when you’re having a higher multiple if I can step out and not be a wound, can my business run without? Having the right processes and team in place, you can now expedite that growth and that’s the point with me not being in the picture. That’s what private equity is looking for.

To grow your business, social capital or working capital is really what comes into play. Share on X

It’s investing in that infrastructure of the business from an operational standard to help you exponentially grow that business. That’s how you would take that $300,000 reinvested in the business. Beautiful answer.

If I’m looking to do that, yes. That’s what exactly would happen.

Last but not least, let’s talk about one of the biggest obstacles that you had to overcome. Be in your business, it could be in one of the business owners that you advised and what you learned from it.

Look, I said before, I had my business partner steal or get to 80% of my practice. This was Memorial Day of 2012. Just forward three months into October of 2012. I think we all remember Superstorm Sandy. I was on 26 Broadway, I had 2000 square feet. I had to let go of my stamp. I had burned through hundreds of thousands of dollars of cash. My income went from here to here. My expenses went from here to here because everything was in my name. My daughter was one. We had multiple like, what do we do next? I helped her down and I reinvented myself again.

That’s why I started getting involved with networking and understanding more value and that’s how we met. Having my relationship be transactional, be more relationship-driven, and much more deeper root. There are going to be ups and downs, but in my personal experience, and to me, feels like five minutes ago, but from that standpoint, it’s getting what you need to do to get to where it would be. Now when I’m not here, how do I scale to the next level? How do I get my business where my business work efficiently without me? Be next to next to where we are. It does, but obviously, I’m on the main card in my practice.

One of the things that I’ve found in business and thank you for your candor and being vulnerable and expressing that because that wasn’t something that I knew, but I’m sure our listeners aren’t going to know that either, but it’s helpful because we’ve all hit those walls. We’ve all hit those points where things weren’t working. What it comes down to at the end of the day, you’ve got to get out there, put your big boy boots on and your salesperson hat on and sell.

What you were able to do to restructure your practice, bring in business, and build those relationships? That chest-to-chest is so incredibly important. Those deeper relationships are what drive your business to the next level. No matter where you are, whether you’re in business for a year, or you’re in business for 20 years, it is building those relationships. Bill LaPiano, that was incredible. Thank you for spending some time with us and being an amazing guest on the show.

No, I listen to Jarrod, I appreciate it and I appreciate the time. Looking forward to catching up again. Thank you.

Thanks.

Bill, it was great to have you. Thank you for joining us for the show. If any of the listeners out there who want to get in touch with Mr. LaPiana, you can reach him at 212-967-4284 or WLapiana@PaxtonFS.com.

 

Important Links

 

About Bill LaPiana

Zero to a Hundred - Jarrod Guy Randolph | Bill LaPiana | Tax EfficiencyMr. LaPiana began working in financial services after a winning collegiate athletic career. He brings that same competitive attitude to find winning investments for his clients. Bill provides comprehensive wealth management services using a holistic approach that goes well beyond the numbers.

As a husband and father of two young children, he understands the importance of helping families plan safely for their financial future. Mr. LaPiana holds the following certifications: Series 7,63,65 FINRA approved licenses along with Life, Accident and Health Insurance licenses.

He graduated from the University at Albany.