Every business owner should be proud of his or her business. If you are the founder, you built every system, and probably landed the biggest customers. If you bought the business, you took what was in place and made it fit your vision and style.
But there is a dividing line between pride in what you’ve created and thinking that you are the business. Taking pleasure in seeing people add value and produce wealth is justifiable pride. Thinking that it exists only because of you is “sinful” pride.
(This is the eighth in a series on The Seven Deadly Sins of an Entrepreneur. It starts here.)
Pride has characteristics that are easily recognizable in some owners. In meetings, do you do all the talking? Do you complain that you are the only one who has new ideas? Does everyone come to you for the solutions to any and every problem? Worse yet, do you insist on it? Do you reprimand employees for making decisions that, while they might work, aren’t exactly the way you would have done it?
My friend Kevin Armstrong in Vancouver says “The more you work in your business, the less it is worth.” Building an organization that is dependent on you to operate it has one drawback.
You can’t leave…ever. If you are the business, then it is worth nothing without you.
In the worst cases, you can’t take a vacation. Even getting away for a few days requires that you be tethered to electronic communications. Perhaps you’ve built sufficient managerial capacity to keep things going for a few weeks, but upon your return you have to jump-start activity again.
Here’s another axiom, this one from John Brown of the Business Enterprise Institute in Golden, Colorado. “Sooner or later, every business owner leaves his or her business.” In stark terms, you can think about how you want to exit, or you can let it be a surprise.
The virtue that counteracts Pride is Exit Planning. An exit plan differs greatly with the owner’s age, his or her personal goals and the size of the business. In every case, it requires consideration of finances, career objectives, lifestyle ambitions, management development and self-maintaining systems.
Ah, but you are still young. You are still healthy. You still enjoy running the business. Why would you want to think about leaving?
Because thinking about how the business will function without you leads to greater profitability, a higher value for your company, and more personal flexibility in your life. Aren’t those reason enough?
Professional investors craft an exit strategy before they buy into a company. For most entrepreneurs, especially in their first five years, leaving is the furthest thing from their minds. If you are beyond your fifth anniversary as an owner, you should have one eye on the door, even if it’s still a long way off.
Thinking about the business as a separate entity, something that will survive after you’ve moved on, will help make you think in longer, more strategic terms about things like new products, target markets, and developing other decision makers in your organization. It brings up questions many owners ignore, especially “What does my company look like to a buyer?”
Long, long ago I was a manager for a national chain restaurant. They taught me a trick that I still use today. Once a week or so I’d walk out in front of my restaurant and stand with my back to it. I’d close my eyes and think “I am a new customer, who has never been to this establishment before. I’ve never even driven past. I am seeing it for the very first time.”
Then I’d turn around and look at my business for the very first time. I always saw something that could have been better.
Selling a business is a bit like selling a house. You spruce things up so that it looks good. In a business you make sure your financial statements are up to date and easily understood. You tighten up on expenses. You refresh operating procedures.
If you start seriously thinking about your exit now, you’ll naturally regard your business through your buyer’s eyes. To quote one of my own favorite axioms, “The things you should do to get the best price for your business are the same things you should do every day that you own it.”
Thanks for reading “Awake at 2 o’clock”. Please share it with other business owners.
You are guilty of Envy if you think everyone else has better employees than yours. If you believe that other owners are making more money, or have a better work/life balance than you, envy is a problem. The common envious phrase that I hear is “My problems are different. No one else has a business that’s as difficult as mine.”
Greed in your business isn’t the quest for material success. That’s presumably why you own a business in the first place. Greed is a trait that prevents success. Greed is a foolish quest for more without knowing what more is. It’s focusing your efforts on cost and savings in the belief that you never have quite enough…of anything.
Leila and I have been married almost 42 years. We worked separately, then in the same company, then owned a company, then worked separately again for a decade, and now again as working co-owners for the last 15 years.
Forget the dictionary definition of Wrath, although depending on how your employees see you, the part about “referring to divine retribution” may be appropriate. <grin> Wrath is, by anyone’s definition, created by a surplus of adrenalin.
Nicely done!
LOL! Love it that you have to have the last words!
My wife and I have worked together for almost all of our 21 years of married life. Works for me! And, if we disagree, she allows me to get “my say” into the conversation/discussion, before agreeing to do it her way. (Usually.)
Good stuff, John. Thanks for putting it out there.
My wife and I have co-owned (literally) a small software company for 20 years. I am the technical architect and a developer, plus the sales person. She does the accounting, designs the marketing materials and sometimes the QA person from (well you get the idea). We met working in a bank together. Between the bank where we met and our current company were 6 other companies between us. In 3 of the 6 we still worked together at the company. While it has not always been smooth sailing, a pet phrase between us is, “We build things together.”
Interesting insights to contemplate. Thanks.
Love this and yes, you two are a dynamite couple. Such respect and gratitude for my my time with you!
Thanks Julie. I hope you’re doing well.