In this episode of The Confident Exit Podcast, Pete Bush sits down with longtime friend and Baton Rouge attorney Mark Fry of Phelps Dunbar, who leads the firm’s Trust & Estates Group within its business practice. Together, they explore why estate planning and business succession planning must be addressed together, and why exit planning is not a future event—but an ongoing process that should start early in a business’s life.
Mark shares insights from advising business owners across industries, explaining where deals break down, why owners often overestimate value, and what buyers truly care about during due diligence. The core of the conversation centers on the “5 D’s”—Death, Disability, Divorce, Disagreement, and Distress—and how strong governance documents (especially operating agreements) act as a practical playbook when unexpected life events occur. The episode closes with book recommendations, personal reflections, and a glimpse into Mark’s upcoming holiday travels.
00:10 — Welcome
Pete welcomes listeners to the Confident Exit Podcast and introduces Mark Fry of Phelps Dunbar.
01:25 — Mark’s Role at Phelps Dunbar
Mark shares his background, his leadership of the Trust & Estates Group, and how his entrepreneurial small-firm roots inform his approach to succession planning.
02:51 — The Silver Tsunami & Consolidation
They discuss the aging baby boomer generation, increased M&A activity, and why consolidation is accelerating across professional services and business sectors.
04:58 — Trust & Estates Planning Connects to Business Succession
Mark explains how estate planning directly impacts business succession decisions while owners are still alive—not just after death.
06:45 — Focus on the Process, Not the Exit Event
Why planning early matters: it allows owners to identify gaps and create options long before a forced exit occurs.
07:41 — The Valuation Reality Check
Mark explains why many owners overestimate business value by focusing on EBITDA multiples rather than readiness and transferability.
08:15 — Readiness Shows Up in Due Diligence
How owner-centric operations, undocumented knowledge, and weak leadership depth surface during buyer diligence.
10:09 — Fix Issues Early or Pay for Them Later
When problems appear late in the process, owners often suffer price reductions and less favorable deal terms.
10:38 — Quality of Earnings as a Proactive Tool
Mark explains why forward-thinking owners use QoE reports early to strengthen weak points.
11:43 — Burnout as an Exit Trigger
Pete connects owner burnout to exit timing and explains why waiting too long erodes value.
13:20 — What Buyers Are Really Buying
Buyers focus on sustainable, repeatable cash flow and reduced risk—not just current profitability.
14:30 — Being Ready for the Unexpected Offer
With significant capital seeking acquisitions, owners may be approached unexpectedly—readiness preserves leverage.
15:30 — Introducing the 5 D’s
Pete and Mark outline the five forced-exit risks: Death, Disability, Divorce, Disagreement, and Distress.
16:23 — Death: Avoid the Default Plan
Without buy-sell planning, ownership interests can pass by default law—often creating unintended partnerships with heirs.
18:04 — Operating Agreements as the Playbook
Why governance documents should include clear triggering events, valuation formulas, and funding mechanisms that evolve with the business.
19:43 — A Real Example of Updating Agreements
Pete shares how even small firms benefit from updating operating agreements as ownership and complexity change.
21:41 — Disability: Define It Clearly
Mark explains why disability must be clearly defined (duration, triggers) and aligned with insurance provisions where applicable.
23:09 — Divorce: Community Property & Ownership Risk
How divorce can unintentionally create economic interests for a spouse—and why agreements must address it directly.
25:00 — The Must-Have Takeaway: Written Operating Agreement
Mark emphasizes that while not legally required, a written operating agreement is essential protection for owners and partners.
26:33 — Concentrated Net Worth Risk
Pete notes that most owners’ wealth is tied up in their business, making proactive planning critical.
28:17 — Disagreement: Planning for Conflict
Loss of alignment on vision, growth, or exit timing can derail a business without pre-agreed rules.
29:53 — Mediation, Arbitration, and ADR Tools
Mark explains how alternative dispute resolution can prevent disagreements from becoming destructive lawsuits.
30:55 — Drag-Along and Tag-Along (Plain English)
Clear definitions of how majority and minority owners are protected in sale scenarios.
33:04 — Decisions vs. “Biggies”
Most day-to-day issues resolve informally—but major life events must be documented in advance.
34:54 — Distress: Resilience Through Diversification
Customer concentration, weak balance sheets, and lack of leadership depth amplify distress during economic shocks.
36:42 — “Stay Ready” as a Business Mindset
Clean operations and documentation reduce both crisis stress and transaction stress.
38:24 — Capital Calls & Unequal Partner Capacity
Why agreements must address funding obligations, dilution, and fairness when partners’ resources differ.
40:21 — The “Messy Deal Closet” Problem
Outdated contracts, inconsistent financials, and poor enforcement create friction and distress.
41:30 — Book Recommendations
Mark recommends Finish Big by Bo Burlingham and references the Exit Strategy Handbook by Adam Coffee.
42:38 — Favorite Wine
Mark jokes his favorite wine is always “the next bottle that gets opened.”
43:05 — Personal: Leavenworth, Washington
Mark shares plans to visit Leavenworth, WA—“Christmastown, USA”—a Bavarian-style holiday village.
44:10 — How to Reach Mark
Mark directs listeners to Phelps Dunbar’s website and LinkedIn.
45:05 — Closing
Holiday wishes and sign-off.
• Estate planning and business succession planning must be addressed together.
• Exit planning is an ongoing process, not a last-minute event.
• Owners often overestimate value by focusing on profitability instead of transferability.
• Buyers prioritize sustainable cash flow and reduced perceived risk.
• Quality of Earnings reports help identify and fix issues early.
• The “5 D’s” can force unplanned exits if not addressed in advance.
• Without planning, default law determines ownership outcomes.
• A written operating agreement is essential—even when not required.
• Disability must be clearly defined within governance documents.
• Disagreements should be anticipated with ADR provisions.
• Drag-along and tag-along clauses protect both transactions and minority owners.
• Operational readiness reduces distress and improves exit outcomes.
“There’s not really a choice as to whether to exit your business. It will happen.”
“Cash flow divided by risk—perceived risk at that.”
“If you don’t have a written operating agreement… get one.”
“Those who stay ready don’t have to get ready.”
“My favorite wine is the bottle that’s going to get opened next.”
Mark Fry, Phelps Dunbar
https://www.phelps.com/
The views depicted in this material are for information purposes only and are not necessarily those of Cetera Advisors LLC. They should not be considered specific advice or recommendations for any individual. Neither Cetera Advisors LLC nor any of its representatives may give legal or tax advice.
Pete Bush is a registered representative offering securities and advisory services through Cetera Advisors LLC, member FINRA/SIPC, a broker-dealer and registered investment adviser. Cetera is under separate ownership from any other named entity.
The guest on this episode, Mark Fry of Phelps Dunbar LLP, is an attorney and does not offer securities or advisory services through Cetera Advisors LLC. The views expressed by the guest are his own and are not intended as legal or tax advice. Phelps Dunbar LLP is not affiliated with Cetera Advisors LLC.
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