He wasn’t born rich. Started his career as a sales person selling a line of industrial products. Finally got the idea that he could do it better and struck off on his own when he was young enough not to know any better. That’s Barry. His story mirrors that of thousands of boomer generation business owners in America today.
Exit and transition planning is not a concept they knew about
At Capitus Group, we’ve come to know them. For the last two years now, we have been focused on helping business owners like Barry prepare their companies for sale or transition. These owners are mostly boomer generation. Many, unfortunately for us and them, are already former business owners like our new friend Barry.
To be honest, there is real frustration for us in our business development efforts. Our best potential clients are those who have already sold their companies. They now have the gift of hindsight. They now understand how we could have helped them. In fact, if I had a dollar for every one of these former owners who responded to our description of our services with an “if only I had known about you before I sold” comment, I’d be able to retire rich.
Baseball, apple pie and Chevrolet.
The early years were a struggle, of course. For most who live this independent business owner story, it didn’t come easy. Long hours, sleepless nights full of head noise and constant uncertainty. But, the business grew and he raised a family.
Also, like so many of his generation, Barry had a phenomenal work ethic. At the office by 6:00 a.m. and usually there until 7:00 p.m. Lots of weekends, too. Did this for over 3 decades.
As is often the case in this classic American story, the work paid off. His business grew, he hired employees, diversified so that he had business lines in both B2B and consumer markets. Then, added even more sales people.
The fairy tale comes true
Seriously, this really happened. Out of the blue, 2 guys in suits walked into his business. They asked for a meeting and offered to buy the company. Right there, on the spot. They were private equity guys. Big money. Doing a roll-up in his industry. They had the money and the business model to justify an extraordinary multiple of profits. They wanted to move fast.
Barry had no interest in selling. He was doing well now. In fact, like so many, he had never really even thought about selling. Not seriously anyway. Certainly, he had nothing even close to resembling an exit plan. After all, the business was his life. Literally. Think about it. 5 to 7 day weeks, 10 to 12 hour days for over 30 years. Didn’t leave much time for hobbies. Sure, there were nice dinners, good cars, big house, great vacations. But, no hobbies, no other real interests besides family. Plus, the prestige and social stature of being a successful business owner. Of course, the kids were grown and gone. No interest in dad’s business either.
But, the deal was irresistible. He knew he’d never see that number again. The buyers were in a hurry. There was just no time to think about it or the post- sale ramifications. It was a dream negotiation and diligence process. It was done in no time. Something like 2 months. And, there was the obligatory consulting contract for a smooth integration and transition.
Again, like so many stories we hear. That consulting thing did not go well. The new owners immediately started changing everything. It was tough for Barry to watch. His employees’ loyalty immediately flipped to the new owners. Barry wasn’t the boss any more. In fact, many weren’t even very friendly. They felt that Barry had either abandoned or betrayed them. Some felt that they deserved a share of Barry’s windfall and were resentful.
Barry’s consulting contract ran its course although the need for Barry’s assistance ended well before that. Often left him sitting at a desk (not in his former office) with no authority and little to do. These agreements are almost always a matter of decreasing need at an increasing rate over a matter of months.
For the first time in his adult life, Barry was no longer needed. He didn’t know what to do with that.
In fact, he suddenly realized that he was lost.
He tried to find himself. Actually moved to Mexico for a few years and lived in a hotel. His wife wasn’t too crazy about that so she would come and go. So, he finally moved back.
Still couldn’t figure out what he wanted to do so he went to work sorting mail for UPS. Then, moved to a lake house several hours from home and worked some more for UPS in a local office.
The travel back and forth from the lake to home was taxing so he moved back home for good. He seems to have found himself now. He’s a house flipper. Buys homes, fixes them up and resells them. Does 4 or 5 a year.
He doesn’t have the pressure of running a business anymore. But, somehow, I get the sense that he really misses that pressure. And, the sense of being in “the game” every day. Running the show. Calling the shots.
As the old saying goes, “be careful what you wish for, you just might get it.”
At Capitus Group, we work to help our clients with every aspect of the exit and transition planning process. This often includes an evaluation on what life looks like on the other side of the deal to help them to avoid experiencing Barry’s story.
Note: If you have an interesting and/or educational CEO story of Head Noise caliber, write to me at firstname.lastname@example.org. I’d love to speak with you and share your story in my Head Noise blog. You can tell your story either on the record or, without attribution.
Cameron Bishop is a partner with The Capitus Group. The firm provides comprehensive business value enhancement, exit planning and transition planning and strategy solutions. Partners and Advisory Directors comprise an experienced team of business professionals who have successfully owned, run, grown and sold companies. Capitus utilizes proven value enhancement and risk reduction techniques to enable superior transition options