Collaborating for Excellence The Board That PNG Built

Document Sample
Collaborating for Excellence The Board That PNG Built Powered By Docstoc
					                                                                                                        First Quarter 2006

          TABLE OF CONTENTS                                                     NETWORKING

Collaborating for Excellence
                                                              Collaborating for Excellence
                                                                        Ward Wieman Shows Us How
Joe Cobert                           1
                                          by Joe Cobert
The Board That PNG Built and              PNG’s catchphrase and mission is                While no official registry exists, we think
the Beauty of the Blast                   “collaborating for excellence.” It captures     that one story—which has led to at least
                                          the concept pervading our networking            19 PNGers being employed to date—is
Ron Hoffman                          1
                                          group that the optimal results are frequently   well worth telling (and repeating).
                                          those obtained by sharing the work with         Ward Wieman of PNG’s Encino chapter
Event Photos
                                          other professionals, each doing the tasks       began some five to six years ago what has
PNG Holiday Party                    2    for which he or she is best suited.             been a remarkable chain of professional
                                          Indeed, the term “collaboration” is well        service providers for a Santa Clarita-
Get Out of Your
                                          chosen because it contains within it two        based manufacturer. Contacted by the
Own Way at Work                           other words which reflect this theme of          client’s then CPA, Ward—a collaborator
Book Review by Rick Rhoads           4    optimizing the work results by sharing          extraordinaire—set in motion the process
                                          the work assignments: the words “labor”         of 18 other referrals. Some of the people
Are You “Invisible?”                      and “ration.”                                   brought in were already in PNG; and
Dennis McCue                         5    We all hear stories of clients who, pleased     others, not initially members, joined our
                                          with their first PNG professional, open          organization as they were added to the
Spotlight:“Cause, Good;                   their doors (and wallets) to welcome            client’s team and saw the dynamism of
                                          others performing companion services to         PNG contacts.
Destination, Secret”
                                          satisfy the clients’ various needs.                              continued on page 5
Interview with Attorney, Phil Magaram 6
New GLs Seek Generosity, Energy,
Tenure, Personality,“Trusted-                                    The Board That PNG Built
Advisor-ness,” Commitment                                                and the Beauty of the Blast
Juan Hovey                           8    by Ron Hoffman
                                          Several years ago, about the same time I        other high school students in the art of
PNG Membership:                           joined PNG, I was asked to serve on the         writing one-act plays. My daughter’s
Making it Count                           Board of Directors of Theatre of Note, a        creation was a one-act Shakespearean
Managing Directors’ Column          11    50-seat theater company in Hollywood.           comedy called Women Are the Weaker
                                          My purpose for getting involved was to          Sex. Her play went on to win state and
The “Inside Sale” of a Business           assist the theater by giving back for the       national awards and was performed
                                          opportunity they provided my daughter,          twice in Hollywood theaters. These
Alex Wilson                         12
                                          Courtney, by mentoring her and several                           continued on page 3
Visit the PNG Website at
                                            PNG Holiday Party, November 30, 2005

                Davis R. Blaine
             The Mentor Group, Inc.
   818/991-4150 •

             Gordon W. Gregory
                Mosaic Capital LLC
  818/728-7555 •

                  Renee Jacobs

                 Tuyen Nguyen

                  Nancy Wood

  Professionals Network Group, Inc.
          14925 Ventura Boulevard, Suite 312
            Sherman Oaks, CA 91403-5967

   Phone:           818/382-6496
   Fax:             818/382-6493
   Toll Free:       888/684-4437 (phone)
                    888/684-4435 (fax)

 This newsletter is published by Professionals
 Network Group, Inc. as a service to its members.
 It is distributed with the understanding that
 Professionals Network Group, Inc. is not engaged
 in rendering legal, accounting or other professional
 advice. If legal, accounting or other professional
 advice or expert assistance is required, the services
 of a competent person should be sought.

PROFESSIONALS NETWORK GROUP                     2                                  FIRST QUARTER 2006
      OC Holiday Party at the Nautical Musuem
                December 15, 2005                                                          NEWSLETTER TEAM

                                                                                               Jennifer Beever
                                                                                                      New Incite
                                                                                               Phone: 818/347-4248
                                                                                                 Fax: 818/475-1613

                                                                                          Joseph M. Cobert, Esq.
                                                                                        Joseph M. Cobert, a Professional Corp.
                                                                                                Phone: 818/986-4200
                                                                                                 Fax: 818/986-5584

                                                                                                  Juan Hovey
                                                                                        JVH Communications And Consulting
                                                                                                 Phone: 818/709-6420
The Board That PNG Built                                                                          Fax: 818/709-6421
continued from page 1

awards aced my daughter a place in the      was generated from PNG. We just had                  Rick Rhoads
                                                                                              Rick Rhoads & Associates
Tische School of Performing Arts at New     our first major fundraiser in the Theatre            Phone: 310/306-0088
York University.                            of Note’s 25-year history and this PNG-              Fax: 413/828-6037
So back to my story.…I decided              inspired board raised over $10,000 for
that the theater needed a board of          the company.
                                                                                              Deborah Rodney
directors comprised of entrepreneurial      So, for all you PNG newcomers, or you      The Next Level Marketing & Creative LLC
                                                                                                 Phone: 310/477-2119
professionals with strong and varied        veterans—don’t be shy, don’t sit on                   Fax: 310/477-2661
areas of expertise.                         that need, BLAST IT OUT! This valuable,       Email:

A fellow PNG member suggested that I        unique, and powerful tool can make
use the dynamic resources and power of      finding a match for your need, deal, or                  Lee Ryan
                                            want …a reality!                                   Ryan, Miller & Associates
our organization by “blasting” my needs                                                         Phone: 323/938-4768
for board members. I began “blasting”                        Ronald N. Hoffman                    Fax: 323/857-7009
this need monthly through PNG’s                              [WLA] of the firm
website. What happened was truly                             Hoffman         and
amazing. Nearly each time I “blasted” I                                                     Sonia v.M. Stoddard
                                                             Associates,    APLC,                Stoddard & Associates
would get e-mails or calls from generous-                    is an attorney at                    Phone: 310/390-2009
spirited PNG members interested                              law specializing in                   Fax: 310/390-6199
in learning more about serving the                           representing clients
theater company and giving back to the                       facing      criminal
community by helping this small theater     prosecution for the full range of           Submit all articles to PNG
                                            offences including all felonies and
raise money and grow.
                                            misdemeanors      and    white-collar
 I’m proud to say that over the last ten    crimes. Mr. Hoffman may be reached
months, the board has grown from two        at 323/655-3900 or 818/908-1288 or            Newsletter Production
to ten members, and 80% of the board                 

    Call Toll-Free:         Northern California & Orange County P 888/684-4437                     F 888/684-4435
FIRST QUARTER 2006                                                                     PROFESSIONALS NETWORK GROUP               3
                                                       SKILL BUILDING

                                      Get Out of Your Own Way at Work
                                      Review of a new book by Mark Goulston, M.D. [SM1]
by Rick Rhoads

Forty self-defeating behaviors get a mini-   out of touch. Not listening. Lacking         A reviewer on wrote,
chapter each in this book by psychiatrist    self-discipline. Wasting time. Let’s face    “Goulston was talking me through my
Mark Goulston, each complete with a          it, even with the way-above-average          self-defeating behaviors the way the
“Usable Insight” and “Action Steps” to       personal and social skills of PNG            supportive parent (I never had) would
help you — or the people you lead,           members, if everybody improved in            have.” In the book, Mark quotes from a
coach, or work with — overcome them.         a few of these areas, we’d have better       speech by Warren Buffett at a university:
Mark placed the chapters in the order        troikas, better meetings, and more and       “Everybody here has the ability to do
of prevalence of each behavior that he       better referrals.                            anything I do and much beyond.…For
encountered in the workplace. The top                                                     those who won’t, it will be because you
five? Procrastination. Getting defensive.     “How Self-Defeating Behavior Develops,”      get in your own way, not because the
Staying too long in a job you should         a chart in an Appendix to the book, traces   world doesn’t allow you.”
leave. Taking the bait. Not delegating. If   the influence of childhood experience
these strike a chord when you look at        on life as an adult. The concepts are        Enough said.
yourself and the people you work with,       further elucidated in the Introduction,
                                             called “Potential Is a Terrible Thing to                      Mark      Goulston,
run out (or log on) and buy this book,                                                                     M.D. [SM1] works
which is published by Putnam. Don’t          Waste.” If you have young children, a few
                                             minutes considering the implications of                       with executives and
procrastinate.                                                                                             senior management
                                             the chart could go a long way toward
Not sure? Here are the next five: Talking     helping your kids. I wish I had thought                       to quickly resolve
over or at others. Being competent but       more about the differences between                            people     problems,
                                             “coddling,” “critical,” “ignoring,” and                       using his skills as
                                             “supportive” when my daughters were                           psychiatrist and a
                                             young, although as adults they have          former FBI/police hostage-negotiation
                                             largely forgiven me.                         trainer. For more information, see
                                                                                 You can
                                             This is Mark’s third book, and applies       reach Mark at 310/998-1150 or
                                             the concepts he developed in Get Out
                                             of Your Own Way to the workplace. Get
                                             Out of Your Own Way at Work reflects                             Rick Rhoads [WLA-
                                             Mark’s transition from clinical psychiatry                      GL] helps professional
                                             to corporate consulting. For the way                            service firms and
                                             that developed, starting with house calls                       nonprofits stand out
                                             on dying patients, and the “stunning                            by writing compelling
                                             parallels between spouses and business                          newsletters, brochures,
                                             partners, parent/child problems and                             websites, and other
                                             boss/subordinate problems, sibling and                          marketing tools. You
                                             co-worker conflicts,” see Mark’s website,     can reach Rick at 310/306-0088 or

PROFESSIONALS NETWORK GROUP       4                                                                              FIRST QUARTER 2006
Collaborating for Excellence
continued from page 1                                                      Are You “Invisible?”
The group of professionals ultimately           by Dennis McCue
included three different bankers, two           When a colleague, Sharon Berman, first         at least once—of the necessity of
computer experts, two insurance providers       suggested that I join PNG, it caught my       attending your group meetings regularly,
(health and commercial lines), three lawyers    attention, but I really didn’t understand     the importance of the troikas, the value
(labor, intellectual property and corporate),
                                                what she was directing me toward. At          of a personal one-sheet and the benefit
another accountant, two real estate
                                                the time, I was very resistant to getting     of guesting at other groups. These are
consultants (a broker and a space planner), a
temporary CFO, a human resources person         involved in activities which would take       the tools and methods that our PNG
and two other consultants.                      me away from clients and my life. My          community uses to grow and support
                                                business was strong and I was getting         one another.
Pretty amazing. However, for Ward, there’s
                                                regularly referred from one client to
more to come. Having helped the client                                                        However, there are other tools available
grow from annual revenues of $10 million        another, so I saw no reason to join a
                                                “leads group.”                                to members that are just as powerful: the
to $25 million in the five to six year stretch                                                 weekly e-mail blasts that get messages out
involved, Ward is now trying to combine
                                                Almost a year later, while engaged in         quickly to a very wide group, the boot
the resources of this highly grateful and
                                                conversation with Jennifer Beever             camps and training programs that teach
successful customer with another of his
clients in an allied business. Watch for the    [WLK2] at an Institute of Management          you how to utilize PNG’s resources and
Wieman referral machine to crank out            Consultants meeting, PNG was suggested        opportunities, the social events where
another host of opportunities for PNGers.       to me again. I was looking for an expert      you can relate to others on a personal
                                                to help one of my clients, but I had no       level and discover common interests,
Ward, you’ve raised the “high bar.”
                                                strong relations with a larger professional   this newsletter where people can share
Collaborating for Excellence is PNG’s
watchword; and, for a great guide, we           community. In effect, such people were        ideas and concepts as well as become
suggest that you watch Ward.                    invisible to me and I was invisible to        educated in our communal philosophy,
                                                them, as well. Jennifer pointed out the       and the two most powerful tools of
                 Joseph M. Cobert
                                                value of an organization where you            all—the printed directory and online
                 [ENC ~ CC2] A
                 Professional Corp              could find experts that were known and         database. These make every member an
                 Managing       Editor          respected by other professionals and          immediate resource available to you and
                 of PNG’s Network               who had withstood the test of time. (I        your clients!
                 News, is a real estate         am slow sometimes, but I believe that
                                                if messengers keep showing up, you            For many members,the printed directory
                 attorney. You can
                 reach Joe at 818/986-          should at least consider the message.)        sits beside their telephone or in their
4200 or                                                                 briefcase as the primary referral source
                                                This time, I visited,       when a client has a need beyond the
                    Ward Weiman, [ENC-          called the PNG office, got an invitation       expertise that they or their firm can offer.
                    DAM] founder of             to attend a meeting in Orange County,         In my case, the online database (which
                    Management                  and took the plunge. I attended the           is more current) serves this need. I can
                    Overload, specializes       meeting and the ensuing troika, and           call upon it anytime and anywhere—
                                                thereby lost my “networking virginity.”       from my computer, in a client’s office,
                    profit development.His
                                                Through the troika experience, I had          and even on my smartphone. This is
                    practical no-nonsense
                    approach provides a         my first experience of what PNG really         normally extremely helpful. However,
                    fresh prospective to        offers—the opportunity to get to know         on occasion I am disappointed
optimize operations and build powerful          other professionals and to become             by the results of my search. Why?
organizations.Ward is a long-time member        known by them!                                ...Because of our /invisible/ members.
of the Encino group and can be reached at                                                     “The Invisibles” are the people who
310/207-5572 or            If you’ve been a member for any length        join yet never bother to write their
                                                of time, you have undoubtedly heard                           continued on page 10
FIRST QUARTER 2006                                                                                 PROFESSIONALS NETWORK GROUP         5

                       Phil Magaram: “Cause, Good; Destination, Secret.”
   Rick Rhoads interviews estate             seen cars crushed at a huge scrap-metal    my roommate in San Diego. He was a
   and tax attorney Phil Magaram             facility on Terminal Island, and had a     litigator; I was a business and taxation
   [WLA], senior partner of Valensi          guided tour of the Cathedral of Our        lawyer. The firm stayed together for 20
   Rose Magaram Morris &                     Lady of the Angels when it first opened.    years and grew to about 10 lawyers.
   Murphy, PLC.                              Secret Saturday lasts until about 5:30     Then I broke it up.
    Rick Secret Saturday is so intriguing,   p.m. and includes lunch and an auction.
                                                                                        Rick Why?
    let’s start with that, and then talk     Volunteers do the work; all the money
    about your law practice.                 goes to leukemia research. A committee     Phil I was bringing in major cases,
                                             of doctors, most from Childrens Hospital   including the sale of the Bel-Air Hotel,
    Phil My wife and I, together                                                        settling probate disputes related to the
                                             Los Angeles, decides which grants to
    with eight other couples founded                                                    estate of James Copley ( owner of the San
    Couples Against Leukemia in the                                                     Diego Union-Tribune), and representing
    late 60s. My father had died of          Rick I’ll be taking my granddaughter       one of the executors of the J. Paul Getty
    leukemia at age 50; I wanted to          again. Cassie really looks forward to
                                                                                        estate. My partners did not agree to
    do something to fight the disease.        being one of the few kids among so
                                                                                        what I felt was a fair distribution of the
     Couples Against Leukemia has            many adults. Perhaps we can organize
                                                                                        income. I became a partner at a large
     raised several million dollars for      a PNG bus. When is the next Secret
                                                                                        firm, but I was used to being a big fish
     leukemia research, through all          Saturday?
                                                                                        in a small pond. In 1984 I joined what
     sorts of events. For the last about     Phil May 13, 2006. Busses leave from       was then Valensi and Rose. Valensi Rose
      10 years we’ve focused exclusively     the Westside Federal Building and from     Magaram Morris & Murphy now has 20
      on Secret Saturday.                    Huntington Beach.                          lawyers, 10 of whom specialize in tax-
      Rick What makes it “secret”?                                                      related matters and/or estate planning.
                                             Rick Now let’s talk about your law
                                                                                        We plan and handle estates ranging in
      Phil When participants board           practice. First of all, what led you
                                                                                        size to over $1 billion. Valensi and Rose
      the busses at 9:00 a.m. they don’t     to specialize in taxation and estate
                                                                                        have retired; I am the senior partner.
      know where they’re going —             planning?
      except that they will experience       Phil As an undergrad accounting major      Rick Can you give us some examples of
       four or five places they’d be                                                     the larger estates?
                                             at UCLA I enjoyed and did particularly
       unlikely to visit on their own.       well in income tax classes. At UCLA law    Phil Joseph Brown, who owned the
       We’ve seen aspiring professional      school I had the highest grades in tax     Bel-Air Hotel. Leonard Green, who was
       wrestlers beat up on each other       classes and was known as “the taxman.” I   a pioneer in leveraged buyouts (Thrifty
        at a training school near LAX;       began to practice law with a leading tax   Drug Stores, Big Five Sporting Goods,
        toured JPL in Pasadena and           firm in San Diego.                          among others). Leonard was a pioneer
        heard a lecture by their board                                                  in leveraged buyouts. His partners
           chairman about their deep         Rick But you returned to LA.
                                                                                        bought the firm for over $1 billion. We
                    space monitoring         Phil I’d been in San Diego for six         are now handling the estate of a well-
                        probe;               months when my father was diagnosed        know musician/composer.
                                               with leukemia, and told he had a
                                                year to live. I returned to LA to be
                                                                                        Rick Could you describe an interesting
                                                                                        tax case?
                                                 with the family. In 1962 I founded
                                                 a law firm together with a law          Phil I had negotiated a $10-million
                                                 school classmate who had been          settlement from the Getty Museum for

PROFESSIONALS NETWORK GROUP       6                                                                            FIRST QUARTER 2006
my client Ron Getty, a son of J. Paul
Getty. I took the position that the $10
million was nontaxable and the client
so indicated on his tax return. The IRS
disagreed. I tried the case in tax court,
where Judge Cohen ruled against us. We
appealed to the 9th Circuit and won a
unanimous reversal. By that time, with
interest and penalties, $15 million would
have been owed.
Rick You’ve built two successful laws
firms. The first lasted for 20 years until
you ended it, and your current firm is in
its 24th year and growing. Other than
being astute about taxation law and
estate planning, what has enabled you
to create and sustain these firms?
Phil Primarily good fortune and
the ability to build strong referral        Phil with his wife Sally and two granddaughters Mila (oldest) and Ani (bottom left).
relationships with quality people.          matters to me and I have referred                                 to the organizations or causes the client
Rick Good fortune?                          important business to him.The same with                           has chosen to help. A little planning
                                            Gordon Gregory. Other PNG members                                 in this area can go a long way toward
Phil My first client was the man who         with whom I have a mutual-referral                                multiplying the power of a gift.
delivered the conference table to my        relationship are bankruptcy attorney
new office. “Do you handle adoptions?”       David Kupetz [WLA, LA1], accountant                               Rick Returning to your own philanthropy,
he asked. “I specialize in them.” True —    Ken Deakins [WLA], and life-insurance                             I know that you have devoted yourself
adoption was about to represent 100%        broker Joel Kabaker [SM1, CC2].                                   to a number of endeavors in addition to
of my caseload. I helped him adopt                                                                            Couples Against Leukemia. Could you tell
his wife’s child. A wrong number that       Rick When did you join PNG?                                       us about those?
awakened me in the middle of the night      Phil Gordon Gregory asked me to join
resulted in my first major client.“Do you                                                                      Phil I’ve headed national and local
                                            about 12 years ago. I was initially skeptical,
handle contracts?” Another specialty.                                                                         planned giving programs for the Arthritis
                                            then pleasantly surprised to discover
This client had a proposed contract to                                                                        Foundation and I’m a lifetime member
                                            others who were in the same playing
sell movie rights Warner Brothers.                                                                            of the board. In 2004 I was honored
                                            field. Relationships with them have been
                                                                                                              to receive the Foundation’s national
Rick I’m going to prolong this interview    good for me and for them.The other four
                                                                                                              planned giving award for having helped
so I can absorb your karma. What about      shareholders in our firm are also PNG
                                                                                                              raise about $10 million. I serve on the
relationships?                              members: Michael Morris [BW], Laurie
                                                                                                              boards of the UCLA Foundation and
                                            Murphy [SM2], Wayne Johnson [SM3],
Phil I look for people whom I can                                                                             the Cal State Northridge Foundation.
                                            Arlen Gunner [SBAY, SM1].
confidently recommend to my clients                                                                            My first wife earned a Masters Degree
because they are competent,trustworthy,     Rick You often guide your clients with                            in food science at Northridge, taught
and dependable. I have given several        regard to charitable giving, right?                               there, and practiced for many years
such people significant help in their        Phil A lot of my work is in the area of                           as a registered dietician. After she
careers, and they have done the same        charitable tax planning, using charitable                         passed away I established the Marilyn
for me. Reciprocity is important to         lead trusts, private foundations, donor-                          Magaram Center at Northridge to
me. Investment advisor Cam Davis            advised funds, and other devices to                               memorialize her and her work. The
[SM2, SM3] referred some very large         minimize taxes and maximize support                                                    continued on page 11

FIRST QUARTER 2006                                                                                                    PROFESSIONALS NETWORK GROUP     7

                   New GLs Seek Generosity, Energy, Tenure, Personality,
                         “Trusted-Advisor-ness,” Commitment
by Juan Hovey

PNG depends on its members to inject           members of her group, she identifies         way he would conduct himself in his
new blood into the organization—a              two as fitting into this category—Nickie     own business.”
crucial task, and hard to do. But not          Kubasak, an intellectual property
                                                                                           Rocky Mills
impossible, if you take a lesson from          attorney, and Rebecca Nassi, who
three of PNG’s newest group leaders—           with her husband David Ackert (WW)          Rocky Mills, who took over Woodland
Deborah Shames, Rocky Mills,                   runs Ackert Advisory, a coaching and        Hills I last year, looks for three
and Gary Saenger—each of whom                  communications firm.                         characteristics in a new member—
approaches the job with passion and                                                        tenure in business, personality, and what
                                               “Nickie secured the copyright for the
discipline.                                                                                Rocky calls “trusted-advisor-ness.”
                                               name of our business, Eloqui,” Deborah
                                               says. “She asked how we were going to       “Ten years is a threshold; the average
Deborah Shames
                                               use the name—in print, in electronic        in our group is 15 years,” Rocky says. “I
“Let me give you an example of the kind        media—and made sure that the                want my members to feel comfortable
of principles that I look for in prospective   copyright gave us coverage in all of        when making referrals, and that can
members,” says Deborah Shames, who             those areas. She was fabulous.              come only with tenure. I also want my
launched PNG’s Calabasas group in June.                                                    members to be charismatic, enthusiastic,
                                               “Rebecca and David also give more
“Judith Perez and Caren Nielsen are                                                        lively—and you can’t tell these things
                                               than they get. They’re very aware that
both estate planning attorneys in my                                                       about a person by looking at a resume.
                                               the PNG model is to give referrals and
group, and each refers work to the other.      connect people.What I hear from others      “The third item is the toughest to
I call that the ‘generosity principle’ and I   about these two is, ‘I may be twice their   judge—trusted-advisor-ness,” Rocky adds.
look for it—as distinct from the ‘scarcity     age, but I listen to their advice.’”        “I made that word up. If you’re just a
principle’ (shying away from another                                                       vendor, you’re not a trusted advisor. If you
                                               Deborah likes to stimulate discussion by
person in one’s group with the same or a                                                   have relationships with clients formed
                                               asking questions designed to delight and
very similar specialty).                                                                   over years through repeat business and
                                               surprise her members. Once she asked
“I look for other things, too,” she adds.                                                  consultation, your clients will seek you
                                               about the worst jobs her members had
“Someone told me, ‘You know, it’s really                                                   out for introductions to other people.
                                               ever had and the lessons they learned
a long way from my office to the room           from the experience.                        That’s what we want in our group.”
where we meet, but the people you                                                          Rocky and the members of his executive
                                               “Richard Rosenberg told us about
gather here are people I want to work                                                      committee—Mike Balikian, Steve
                                               running a cash register in a restaurant
with, so I have no trouble getting here.’ A                                                Green, Sheryl Mazirow, and Dan
                                               when he was young,” Deborah says.
prospective member said, ‘I like it when                                                   Bergman—always meet one-on-one
                                               “He saw dishonesty all around him,
a client asks me to help find people who                                                    with prospective members.
                                               including one man who didn’t always
can help grow my client’s business.’That’s                                                 “We tell them what we want them to
                                               let Richard know when he sold a hot
the kind of person I want in my group—         dog—and pocketed the money. When            commit to—time and energy,” Rocky
someone who will look around and ask,          Richard asked him what he was doing,        says. “We expect them to attend at least
‘Who can help my client?’”                     the man pushed Richard against the wall     three quarters of the meetings. This
Deborah seeks out people with energy,          and threatened him. Richard decided         means attending troikas, too. We expect
enthusiasm, and confidence. Among other         then and there that that was not the        them to guest at least three times a year.

PROFESSIONALS NETWORK GROUP         8                                                                              FIRST QUARTER 2006
We expect them to go to at least one          Gary asks prospective members why            Eloqui. She specializes in presentation
PNG event each year. We expect them           they’re interested in joining a networking   coaching for business professionals
to have a picture on the PNG website          group and what success they’ve had           and has trained executives at
                                                                                           financial, pharmaceutical, legal, and
and to have a one sheet.”                     with other networking groups—or not.
                                                                                           technology firms. Contact Deborah at
As a senior vice president at RBC Dain        “I ask what deals they have done, what or 818/225-7991.
Rauscher in Woodland Hills, Rocky             business they have referred out,” Gary
manages people every day, and he brings       says. “I ask whether they will show up                          Rocky Mills [Group
the same philosophy to his work as a          for the meetings, because participation                         Leader WH1; WK2]
group leader for PNG.                         is crucial. I want to get a good feel for                       draws on his 28-
                                              the prospective member, because I                               year tenure to
“You don’t command stockbrokers,”                                                                             hire/monitor/
he notes. “You provide them with              know that the successful ones will be
                                                                                                              replace world-class
an environment conducive to what              more interested in what they can give                           private investment
they want to do. As a group leader, I         than in what they get.                                          managers for his
want to provide my members with an            “I also want to understand what              “two-comma” clients. He’s a Certified
                                                                                           Investment Management Analyst (a
environment that will enable them to          dilemmas they have had in business and
                                                                                           credential held by less than 1/2 of 1%
accomplish their business goals.”             how they handled them.”                      of all brokers in the U.S.) and Senior
Gary Saenger                                  Gary entices his members into lively         VP at RBC Dain Rauscher in Woodland
                                              discussion with questions that probe         Hills; or
For Gary Saenger, who started the                                                          818/313-8788.
                                              under the surface.
Santa Clarita Valley group a year ago,
the key to attracting good members was        “I keep it on the light side—and fast
                                                                                                             Gary L. Saenger
to stock his executive committee with         paced. Getting participation from                              [SC] is Founder and
solid professionals.                          everyone is really important, even                             President of the
                                              when we concentrate on two or three                            executive recruiting
“I knew I had the right people                                                                               consulting firm
                                              members and drill down into how they
when we talked about the subject of                                                                          Saenger Associates,
                                              do business, what kinds of deals they
exclusivity,” Gary says. “My folks didn’t                                                                    p r o v i d i n g
                                              have done and how they provide added
want exclusivity. They wanted to foster                                                                      professional services
                                              value to the client.”                        to client companies for their key
competition and look for ways to
differentiate themselves.”                    Three new group leaders, all from            executive needs. You can reach Gary
                                              different professions. What do they          at or
In recruiting members, Gary and                                                            661/284-3818.
                                              have in common? Why are they
his executive committee—Calvin
                                              already perceived as successful group
Hedman, John Shaffery, Frank Di                                                                           Juan Hovey [SO1],
                                              leaders? Each has found a unique way
Tomaso, Robert Schwartz, Randy                                                                            a former columnist
                                              of emphasizing to his or her chapter
Moberg, and Adrian Simon—sought                                                                           for the business
                                              members that we all benefit when we                          page of the Los
people like themselves. “We wanted
                                              are striving to attain the PNG goal of                      Angeles      Times,
players with energy and connections in
                                              “collaborating for excellence.”                             offers ghostwriting
the community, people who make deals,
                                                                 Deborah Shames                           services         to
who are interested in helping others,”                                                                    professionals who
                                                                 was a director of
Gary says.“And we ended up with a good                                                     want to see their bylines in print
cross section, with some members early in                        independent films          and don’t have time to write. He
their careers and others fully established.                      and a producer            may be reached at 818/709-6420 or
It took us five months to get there, but our                      of corporate and
current membership stands at around 32.”                         educational videos
                                                                 prior to founding
FIRST QUARTER 2006                                                                              PROFESSIONALS NETWORK GROUP      9
The ‘Inside Sale’ of a Business
continued from page 12

CEO and other management. That                  to leave him/her in place to drive the       The choice of how best to sell a business
new management is often given stock             company to higher performance (with          usually comes down to meeting the
and other up-front benefits to attract           generous funding for expansion). What        specific needs of the seller and the nature
qualified candidates, lessening the              a win/win arrangement! The owner             of the individual business. A qualified
amount that the seller will receive.            gets needed liquidity now, a trailing        business broker can help owners sort
Finally, if a bank loan is required, the        ownership portion, a continuing job at       through their options to decide which
seller is often required to guarantee it.       what he/she knows best, and financial         approach is best.
As a result, ESOPs are not for everyone         support for growth.The fund gets a well-
and account for only a tiny portion of          performing company with the expert                             Alex Wilson (SM II)
sales done in the US.‘Tis a pity.               leader incented to execute an aggressive                       is a business broker
                                                growth agenda. After three years or                            serving the owners
PARTIAL SALE                                    so of growth, the company is sold at a                         of private companies
What if a company owner is too young to                                                                        when they want/
                                                higher valuation with strong rewards for
retire, still loves the business but needs to                                                                  need to cash out.
                                                the majority (fund) and minority (old
                                                                                                               Alex’s partner is a
take some money off the table to cover          owner) stakeholders.                                           financial      wizard
looming college expenses, etc.? Rather
                                                                                             who is adroit at arranging growth
than sell the entire business, there are        Moral of the story: a seller need not        capital, a complimentary service. You
buy-out funds that love the prospect of         rush out into the great outdoors to find      can contact him at 310/312-6004 or
acquiring a major portion (say, 75 - 80%)       a suitable buyer. MBOs, ESOPs or partial
of a company, providing a management            sales should be considered before relying
contract for the key executive/owner            on the kindness (or not) of strangers.

Are You “Invisible?”
continued from page 5

Member Profile—a brief description               “The Invisibles” intend to get around        Who knows...You might get a nice referral!
of their practice for the PNG site and          to it some day, but believe that they are
                                                                                                                 Dennis McCue, CMC
directory.When you look them up, there          too busy right now. However, to me it
                                                                                                                 [LB] is the principal
is nothing to help distinguish them from        says that they don’t realize the pervasive                       of Dynamic Firm
their peers. The Invisibles don’t upload        power of PNG, or that they don’t care                            Management (www.
a picture of themselves to help me              to help my clients, or that they are                   ,
connect their face with today’s client          “too busy” to be of value to my client.                          dedicated to serving
need. Maybe I met them a year ago, but          Basically—for today—to me and my                                 professional firms
don’t remember their names today.               client, they are Invisible.                                      (law, accounting and
                                                                                             business service) in practice building,
“The Invisibles” don’t have links to their                                                   partner relations, communications and
one-sheets on the PNG website, so I             If you, dear reader, are one of “The
                                                                                             organizational development. His high
can’t pass this along to my client. Often       Invisibles,” please take the time today
                                                                                             impact consulting helps complacent
they don’t have a website or don’t have         to become a part of the larger, visible      firms break out of the status quo and
it listed in their profile. This keeps me        community of professionals that are          achieve dramatic growth. You can
from learning more information to make          accessible to all PNG members. We’ll         reach Dennis at 949/640-2220 or
wise recommendations to my client.              have more resources available to us.

PROFESSIONALS NETWORK GROUP          10                                                                             FIRST QUARTER 2006
                                                                                               Phil Magaram: “Cause, Good;
                                                                                               Destination, Secret.”

                PNG Membership:                                                                continued from page 7

                                                                                               Center is a research and education facility

                 Making it Count                                                               for nutrition, dietetics, and food science. I’m
                                                                                               also on the board of the Paralysis Project and
                                                                                               involved with Childrens Hospital and City
                                                                                               of Hope.
                                by Davis R. Blaine &                                           Rick And when you’re not doing law or
                                Gordon W. Gregory                                              philanthropy?
                                                                                               Phil Sally and I keep up with our
                                                                                               grandchildren. Our daughter, who lives in
                                                                                               LA, has two daughters, ages 4 and 7. Our son,
                                                                                               in Seattle, has two sons, ages 5 and 8. We’ve
                                                                                               gone on about 20 cruises; on most of them
                                                                                               I win the ping-pong championship. I’ve
                                                                                               recently started taking lessons. For 20 years
   Why do some members succeed early in their first year while others struggle                  I played chess with a group of four men.
   and struggle? We all desire more business, recognition, and opportunity to help other       One had been Washington State champion;
   members, whether personally or professionally. This year we would like each member          another ran a chess club. I won infrequently
   to realize 10% of his/her new business origination through PNG referrals. That goal is      but learned often. Now I play mainly on the
   attainable. Here are some suggestions to make your membership count:                        Internet. Before I injured my knee I ran a lot,
   1. Show up at your home group. You won’t be known or remembered if you attend               including five marathons. Sally and I have
      sporadically or rarely.                                                                  season tickets at five theaters. We like music
                                                                                               and have Thursday and Saturday boxes at the
   2. Not only attend your troikas, request to join other troikas and/or arrange troikas
                                                                                               Hollywood Bowl and a season subscription
      with PNG members from your group or other groups. At a minimum, you should
                                                                                               at the Disney Hall.
      know each member of your group and how best to match him/her with your client.
      Make a conscious effort to make a valuable introduction—referral, referral source, or                      Phil      Magaram
                                                                                                                 [WLA], senior partner
      professional resource—at or following each troika.
                                                                                                                 of law firm Valensi
   3. Recruit into PNG your best referral sources and professional resources. When you let                       Rose Magaram Morris
      fellow members know your guest is a good friend and great professional with whom                           & Murphy, PLC,
      you regularly exchange referrals, they will want to get to know and do business with                       specializes in estate
      him/her. When you contribute to the betterment of PNG, you also help yourself.                             planningandtaxation.
                                                                                                                 You can reach Phil at
   4. Communicate. Communicate. Communicate. From mastering the testimonial (an
                                                                                               310/277-8011 or
      opportunity to explain the business of the referrer, a description of the business and
      particular matter being referred to you, and the why/how you add value) to sharing                         Rick Rhoads [WLA-
      valuable information and insights at PNG meetings and troikas, you can attract the                         GL] helps professional
      positive attention of your fellow members—all part of personal branding.                                   service firms and
                                                                                                                 nonprofits stand
   5. Make it easy for other members to understand and remember what you do. Focus                               out by writing
      your message/elevator speech. If you cannot articulate within 15 to 30 seconds how                         compelling newsletters,
      you add value or benefit your clients,you make it difficult for others to remember you.                      brochures, websites,
      And develop a quality 1-sheet, which you can pass out at PNG meetings and troikas,                         and other marketing
      as well as have linked on the PNG website.                                               tools. You can reach Rick at 310/306-
                                                                                               0088 or

FIRST QUARTER 2006                                                                                  PROFESSIONALS NETWORK GROUP            11

                                      THE ‘INSIDE SALE’ OF A BUSINESS
by Alex Wilson

When discussing or contemplating the            broadening of ownership of US enterprise     some–what expensive, on the order of
subject of selling a business, the normal       beyond a narrow club of “fat cats”. It was   $15 - 50K in up-front money.
and natural concept is to find a buyer           designed to allow the company to be
so the seller can leave the business to         purchased by all of its employees. After     So, why would a seller put up with such
retire or move on to another business.          the transaction, all of the employees        a complicated and expensive process?
But there are at least three management-        share in the ownership of the company,       Because the tax provisions—or, better
continuation transactions available; the        usually based upon their compensation        said, the excuses from taxes—are
MBO, ESOP and partial sale.                     and length of service. By contrast, a        significant! The seller gets a “fair” (less
                                                Management Buy-Out is often done             than full market) value for the company
MBO                                             by a small group of senior executive         and any attendant real estate, paid at
                                                employees who retain sole ownership          closing or over time. If the seller then
MBO stands for “Management Buy-Out.”            of the company.                              takes the proceeds and immediately
In this scenario, where management                                                           invests in “qualified” funds (often long
includes non-owners, those non-owners           ESOPs have had an up-and-down                term bonds), the sales proceeds are not
make a deal to buy the company from             popularity since inception. The first         taxed. The seller can often borrow up
its owner. Many owners overlook the             ESOPs were done using employee               to 90% of the proceeds against the note
fact that the natural buyers for the            pension funds that bought up the             and the interest received on the bonds
company may be the people who                   company stock. When the company did          may offset some of the borrowing costs.
are currently running it, his/her top           not succeed, the pension fund became         The seller’s basis in the company is
employees. Sometimes it is assumed              worthless and the government’s Pension       stepped up on his death, so no estate tax
that the employees would not have the           Guarantee Fund had to bail them out.         will be incurred if the note principal is
financial ability to make the purchase.          Before too long, retired owners were         still unpaid at such time.
However, there are lenders (including           required to give back the money if it
                                                did not work out and pension funds or        The tax-friendly provisions do not end
the SBA) who see a loan to a successful
                                                other retirement funds were used. ESOP       with seller benefits, either. Normally, only
management team as a safe bet, especially
                                                regulations were revised in the 1990’s       the interest portion of a loan payment is
if the owner/seller provides the vote
                                                to make them more attractive to selling      deductible as a business expense. In the
of confidence of holding the paper on
                                                owners, while still providing protection     case of an ESOP loan, however, both the
an amount of money equivalent to the
                                                for company employees.                       interest and principal are deductible.This
down payment and agreeing to take
                                                                                             is a tremendous benefit to the buyers
second position behind the bank debt.
                                                The heart of an ESOP usually is a bank       of the company who are doing the loan
The buying team or individuals typically
                                                loan. Since the welfare of employees         repayment. The yearly administrative
must agree to pledge their homes and/
                                                (some not the most financially               oversight expenses of audit and valuation
or other assets to demonstrate their
                                                sophisticated) is involved, there is         are deductible as well.
commitment to the process. The buyers
                                                heavy oversight provided by, essentially,
take a risk, the seller takes a risk, and the                                                Unfortunately, the complexity and
                                                the same governmental agency that
lender takes a risk—yet it can be done.                                                      setup charges seem daunting to most
                                                oversees employee pensions. To make
                                                the oversight as absolutely foolproof as     business owners. The idea of getting
ESOP                                            humanly possible, there are initial and      less than the maximum value for the
                                                annual audits and valuations, extensive      business irks some. Others do not trust
ESOP stands for “Employee Stock                                                              their employees to run the business on
                                                legal documentation and paid overseers
Ownership Plan.” The origin of this                                                          their own and have to bring in a new
                                                who are vetted and qualified. All this
scheme is the US Congress, which                                                                             continued on page 10
                                                makes the initial setup of the program
created the ESOP mechanism to foster a
PROFESSIONALS NETWORK GROUP          12                                                                             FIRST QUARTER 2006

Shared By: