…that many never get past.
In a recent dialogue with the founder of a manufacturing company I wrote the following note:
We recommend starting to plan for a sale at least 2-3 years prior to the time you want to exit. Two of the most critical value drivers to develop are (1) stable and growing earnings, and (2) a qualified management team and operating systems that allow the company to operate without the owner to the greatest extent possible…
In response to my note the owner said the following:
The management team is the first hurdle which has been the hardest for me to apply. We had a consulting group come in and after a few days it became apparent to me how miserable I was trying to do everything myself, the entrepreneur’s juggernaut that many never get past. So, I stepped aside and put a very capable man in charge as President. That was the best thing I ever did because I truly hate running the business. I like the sales/marketing and in particular, technology development.
This astute business owner realizes that growing to a multi-million dollar revenue level means that he needs to delegate and form a second layer of senior management. His experience stands in contrast to some business owners who get burnt out while trying to do it all. Lets read again what he said above:
…it became apparent to me how miserable I was trying to do everything myself, the entrepreneur’s juggernaut that many never get past.
Let that be a lesson to each of us. It could change your company’s direction and your life.
Not only does a qualified management team release the owner who is trying to juggle everything. It also drives a significant value premium when the owner eventually sells or transfers ownership.