Are You Building A Job Or A Company?

Jan 12, 2020

How desirable would it be for you to increase the value of your business? How would you one day like to exit it for a good sum of money? Truth is, most people don’t think about an exit strategy when they build their company. It’s their baby, their identity, their hard work, why would they ever want to sell it? But think about it. All of us have to exit a business one day – even if it’s just to pass on the baton to the next generation. It only makes sense that you have a plan for that business to be a valuable as it possibly can be at exit, and to start that planning right from the start.

Having raised more than $1B in startup and growth funding for 11 different businesses in multiple industries. I am here to guide you, towards rapid value growth — growth that exceeds your – wildest expectations. In each of these episodes, I share ideas that help you identify and address blind spots that you may have about your business and develop actionable strategies to weed out the issues that keep your business from being as valuable as it possibly can be; all along the way, but especially at the exit. I offer you invaluable insight into triggering explosive growth for your company. Because if you don’t build your dreams, someone will hire you to help build theirs.

Today I am going to tell you how you can get your company into top shape for the highest level investors and lending partners. Now I’m sure you love your company. You’re probably thinking – I didn’t nurture this enterprise just to sack it off to the highest bidder – right?

“Someone said” – “If you have an exit strategy, it’s not a passion…” – but that’s thinking small and here’s why:

Of course you’re passionate about your company; but think about it – no matter how you cut it, whether you take your company public, sell it, turn it over to employees or family members and retire, or, heaven forbid, keel over dead at your desk, there is going to be an exit. And the bottom line is this; whenever it occurs, no matter the circumstances of its occurrence, you have every proper motivation, in fact the responsibility, to have made that business worth as much as it can possibly be worth. And, there just isn’t anyway for you to do that, without an exit strategy. I like to say, the exit strategy is not about the exit, it’s about the strategy. In fact, I would tell you that everyone, every company needs an exit strategy – that you need to think of an exit strategy before the first dollar of investment goes into the company.

In other words, there will be a point where you do let go. Why not plan for this now? Why not give your company the kind of solid valuation that will enable you to walk away when the timing is perfect? Why not increase the value of your company – for you and for its future growth beyond you?

Planning for your exit strategy is not about being unfaithful to the company you worked to create. In fact, it is the opposite. Planning your exit strategy is paramount to being faithful to the company you created and everyone involved.

Think about this: Are you the heart and soul of your company?

Maybe your company is going really well right now – your revenue growth is great, your bottom line is healthy, you have a great team of people working with you and lots of loyal happy customers, but ask yourself – are you critical to the running of your company? Do your customers want to deal only with you? Would your company be able to manage without you if you took off for a month with little or no notice?

If you found yourself nodding in agreement to all or most of those questions, then here’s a newsflash for you: you’ve built yourself a job, not a company!

As an entrepreneur, it is your job to get things done, not do everything yourself. If you are the main, indispensable cog in the wheel of your business, you’re the principle constraint to its success and value growth.. Remember you don’t just build a business. You build people. And then those people build the business. Resist the urge to do everything yourself – remember you’re building a company, not just a job

You get together a great team of professionals, make sure they know their job and have your systems in place. You then delegate and make sure that you have an organization that is equipped to function. One which doesn’t need you to be the energy that powers it. Each member of your team should know their job and pull their weight. They keep things on track, they interface with the customers, they keep things chugging along.

Keep this in mind. Your company does not die off and disappear when you sell your share of it. All those people who helped you get it to the point of grand intrinsic value should have the opportunity to reap the benefit of their contribution too. Those people should be afforded the opportunity to work for the healthy, vibrant and existing company they helped create. And it’s your responsibility to make that available to them.

Your company must have intrinsic value – value independent of you.

So, plan on being a growth driver! Be an Activated Leader that steers the company in the growth direction. This is good for you and for your company, your employees, the shareholders, and all of their families and communities.

As an Activated Leader myself, I help companies develop and execute an exit strategy that benefits all, and gets their valuation up 3-10x from when they walked into my door, and usually I see five common limiting beliefs that have blocked them from their highest possible valuation. Five universal belief barriers that hold most people back from building that successful, sustainable, scalable owner-independent company rather than an exhausting owner-dependent one.

Belief barrier no 1 – It costs too much.

There is this belief that hiring the extra people and paying them is expensive; that staffing, training, sub-contracting, outsourcing costs more and these are avoidable costs. Instead of considering the cost of freeing yourself up, consider the true cost of the status quo. The opportunity cost of lost growth and reduced value of the business. When you hire the right talent for your business, you’re actually adding value to your business, not subtracting it.

Belief barrier no 2 – It takes up too much time.

Many business owners make the mistake of just doing it all themselves, because they feel delegating, training others and showing them the ropes takes too much time and effort. But this is shortsighted. This will end up with a stressed, stretched-out you. Let others in your team take on more, make more decisions. You don’t have to do it all at once. Divest gradually. Work in a way that the day to day running of your company relies on you less and self regulates more.

Belief barrier no 3 – No one can do it like I can.

Grandma probably taught you that “If you want it done right, you have to do it yourself.” So do you think no one can do it like you can? But grandma grew up in the industrial age where keeping a steady job was her lesson to share. She was right — in a job, you should make yourself indispensable. As a founding entrepreneur, as a company, you should make yourself scalable so you can grow. Train others to do what you do so you can scale up. You have to have the flexibility to realize that someone else can do the job; that there can be more than one way to do the job. I have seen a lot of business owners blow up a good deal at the last minute when they are selling because of that belief blocker, that only I can do this. 99% of people, when they are made a good offer for their business, they blow it up, they go apeshit. I have to calm them down. They lose it. They think they want more money, or that they don’t deserve so much money, or worry about what they are gonna do next if they aren’t that smart guy in that smart company anymore. I’ve had to sit them down and explain the merits of letting go; of moving on and reassuring them that their lives will continue to have meaning even if they are no long heading that company.

Belief barrier no 4 – It’s too complicated.

Actually it’s not! When you learn not to do it all yourself, you realize that it is all a lot simpler than you think! When you know what actually drives the value of your business up, you gain access to motivations, and beliefs that actually get you the results you’ve always wanted. I get that it’s difficult relinquishing control. Right now, you have so much on your plate that it is difficult to see beyond that. And that is why I have always shown business owners how to reorient that thinking; to give them a road map out of a situation that seems complicated, but really it’s entirely doable.

Belief barrier no 5 – Right now is not the right time.

I’ll do it when the time is right, they say. What I hear is fear of the unknown. It is coming from a space of not wanting to let go of what is known, or perhaps an uncertainty of the future. But this belief could cost a lot. Waiting for the right time to create an exit strategy is like waiting for a drought to hit before drawing blueprints for a reservoir. Very importantly, this waiting and putting off more often than not means a decline in the valuation of your business. Draw up the blueprint today to enjoy a better future.

Your company has value. Let’s just ramp it up further.

So this is what I want you to think about right now – what are the limiting beliefs that have been holding you back? Are you unable, or simply reluctant, to make your company less owner-reliant and more intrinsically valuable? Introspect and identify these limiting beliefs and habits. Once you do, see if you’ve passed it onto others in your company. Look around to see who else has caught this limiting belief from you. Who has become used to taking direction rather than making decisions?

Now replace these self sabotaging beliefs with new forward looking empowering beliefs. An activated leader will not only evaluate themselves for his or her limiting beliefs, they will also take action, look to see where they have corrupted or constrained the culture of the company, and make the necessary course corrections with a new set of super-empowering beliefs. Activate and empower your team to become more self-reliant and autonomous. Permit them to take action independently of you, replacing that old mindset with this new mindset. Be willing to allow them to do it their way; even if it fails the first time or two. Let them learn to take the reigns of responsibility. Let them grow into the leader the business needs them to be.

In one instance I had to persuade the CEO of a company to slowly relinquish decision making even for things like which CRM the marketing team should use. In the end he was actually surprised at how empowering decision makers led to a huge increase in the amount of time he freed up for big picture thinking, and he slowly came to terms with the novelty of letting others take on bigger and bigger decisions. Once he felt that freedom, he quickly started to see himself in a more visionary role with his team taking over more of the day to day nitty gritty. This divestment empowered and grew his people, grew the quality of the company, the quantity of dollars generated in revenue and profit growth and most importantly added very significantly to value to his company.

Don’t wait. Right, now, work on your business in a way that will work for you.

If it seems chaotic and busy and burdensome right now, then right now is exactly the right time to make this change. Right now is the time to start to distance yourself and divest yourself of some of your daily responsibilities. Right now is the time to delegate creative authority,, streamline operations and automate. Start small if you have to, but muster up the courage to do this now. It’s the only way you can go from a successful but exhausting, owner-reliant, low value business to a successful, high-value, owner-independent company. A company that is sustainable, scalable, valuable and sellable.

In another episode, I’ll give you the four-step plan to get started on the path to an owner-independent company: a company that yields higher value for you while giving you the freedom to try something new. But first things first, identify your limiting beliefs, so that when you get to that episode, you already have an idea about how to deconstruct, distance and divest.

I’ll close with this: – Chase the impact, not the money. Do this, and the money will end up following you. That’s the way of the Activist Capitalist.

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