Are you looking to Finish Big (exiting your business)?
Starting a business is exciting – it’s a time to dream and it feels like anything is possible.
Growing a business is hard work. Sometimes it’s frustrating and there’s not much movement… and sometimes you unlock one of the keys to growth, find some leverage and things take off! Exhilarating, exhausting and sometimes more than a little scary.
But what about exiting a business? The reality is that every business owner will eventually exit their business – but surprisingly not very many of them think about it… at least not until something forces them to. And according to Bo Burlingham, the author of Finish Big, that’s a mistake.
Finish Big – How Great Entrepreneurs Exit Their Companies on Top
Burlingham is a business journalist and longtime editor of Inc. magazine. He got intrigued with the idea of exiting and started interviewing dozens of business owners (and former business owners). He soon realized that there were ‘Good’ exits and not so good exits. And to be clear, a ‘Good’ exit isn’t just about the money – in fact, even if the money is good, there are plenty of other factors that can lead to a bad experience and outcome for an entrepreneur.
What are some of those other considerations that might turn out badly?
Complexity
Sometimes deals end up becoming extremely complicated and painful to transact. The sales process can sometimes take years to complete – and even when a deal finally closes, the cost of making it happen might well overshadow the end result.
Legacy
For some owners, it’s important that they are leaving behind a positive legacy – a brand, a culture, an ongoing entity that’s going to be around well past their departure. Not all exits will support that.
People
Other owners are worried about their people. After the sale, will their team be taken care of? Will they continue to have opportunities or will lots of jobs and careers be lost along the way?
What’s Next?
And other owners worry about what’s next for themselves. Are they really ready to move on? And do they have something viable to move on to? I thought this quote from the owner of what would likely be perceived as a very successful sale was telling:
“I’d built a really nice company I was very proud of. I had my own little kingdom, seventy employees, and was busy. I had a fulfilling, productive life. To go from that to staying at home and not having a lot to do, that didn’t feel good.”
Quote out of ‘Finish Big’ from a business owner who recently ‘successfully’ sold their business.
Bottom line, there’s a lot to consider if you want to ‘Finish Big’.
What to Focus on for a Finish Big Exit…
There are a lot of solid ideas presented in the book. And the author does a great job of using real world examples and stories to get his points across – so overall it’s well worth reading if you have any interest in the topic. Here are some of the big ideas that stood out to me:
Start Early… Start Now
A viable business doesn’t necessarily equate to a business that you can sell. A saleable business needs to be profitable, but it also needs several other components – things like:
- Not having too much of a concentration of business with one customer
- Having a meaningful track record of success over time
- Some aspect of recurring revenue
- Having a leadership team that functions without the owner
- Having proven, documented processes and procedures
All of those things will make a business much more valuable and easier to run – but they also take a lot of time and effort to create and perfect. Which means you need to start a long time before you’re going to be ready to sell. The sooner you can start thinking about building to sell, the better off you’ll be.
Get Clear on What You Want
The success of your exit depends on a lot more than just the financials but in order to have a shot at getting everything you want, you’re going to need to be really clear on what those others things are. One example of a sale talked about how the owner was advised to not tell his employees. The deal was completed – but not surprisingly the employees were really upset and felt betrayed. These were friends and coworkers the owner had known for years – and he burned those relationships in pursuit of a closed deal. And regretted it deeply afterwards.
What’s your minimum ‘take-home’ amount that you would be willing to accept? What are the intangibles that you need to meet to be successful? Do you need assurances that your team is going to continue to have a job? Do you need to think about an internal sale or some kind of Employee Stock Option Plan (ESOP)? Are you concerned about your brand or legacy?
What will you do next?
It seems like a frivolous concern. Hopefully you’re going to get enough money to make you set for life, you’re ready to stop working and building – does it really matter that you don’t have any major plans beyond golf, family and travelling?
According to the author (and dozens of business owners that he talked to), it matters a lot more than you might think. In fact, the message is clear – it’s critical that you have something that you’re moving towards rather than just moving away from your previous business and life. It could be building some kind of non-profit or giving back in some other way… or it could be embarking on a new idea – but without something to latch on to, that transition will be a lot more difficult than you expect.
What do you think? Have you given any thought to how you are going to exit your business? Have you read Finish Big? I’d love to hear your thoughts – leave a comment below.
Shawn Kinkade Kansas City Business Coach