Bo Burlingham, an editor-at-large of Inc. magazine and the author of several books about business ownership, said: “Every entrepreneur exits. Assuming you’ve built a viable company, you can choose when and how but you can’t choose whether. It’s going to happen. You can count on it!” Burlingham’s book “Finish Big” is based on extensive research and captures narratives of entrepreneurs who have gone through the exit process of selling their companies. The text provides practical guidance to others, but even more importantly, it serves as a critical prompt in framing the context for finishing big in the cycle of business ownership.

Identifying ways to finish big involves a process of authentic personal reflection and, as such, it can be relatively subjective in nature; however, in all cases, the process must be preceded by developing an operational definition of what a desirable outcome looks like as well as what its polar opposite is in order to determine a relative degree of business success. The necessity of engaging in this process is evident based on Burlingham’s research finding that out of more than 75 interviewed entrepreneurs, a staggering 50% were dissatisfied with the nature of the sale of their business. Moreover, many of those interviewed were entirely despondent upon the finalization of the transaction. The existing literature on the topic provides assistance by summarizing the five key elements of a desirable exit:

Business owners should experience fair treatment, including proper compensation, taking into account the early risks they have taken to build up their companies.

TWO: Business owners should feel a sense of accomplishment tied to the recognition that their contributions produced an outcome of value to others and that the process of building up their companies included a level of personal satisfaction.

THREE: Business owners should feel at peace with the treatment of those who came along the way to contribute to the success of their companies, including the rewards they received and the lessons gained from working with those individuals.

FOUR: Business owners should discover a new sense of purpose outside of their businesses. They should establish new endeavors they can get engaged in and excited about.

FIVE: For some business owners, the companies they built are moving on without them and thriving to a greater degree than before, which can be a source of pride for them in the way they handled the challenge of succession.

Burlingham’s research embraces this best-practice approach by suggesting eight common characteristics to assess the business owner’s overall state of mind and level of preparedness at any point in the company’s existence in anticipation of the inevitable future exit. 

ONE: Do you have a crystal-clear understanding of who you are, what you wanted out of your business and why?

TWO: Have you created market value and looked at your business through the eyes of a potential buyer or investor?
THREE: Have you allotted enough time to prepare for a departure that provides multiple options for you or your heirs?
FOUR: Have you created a team which is capable of running the company without you?
FIVE:  Have you surrounded yourself with a blend of professionals and former business owners who can help you to minimize mistakes?

SIX:  If you sold tomorrow, would you be at peace with how you have fulfilled your responsibilities to investors and/or employees?

SEVEN: If you sold tomorrow, would you be at peace with how you have fulfilled your responsibilities to investors and/or employees?

EIGHT: Do you have a clear vision of what you will do after the sale?
 These eight common characteristics are thought-provoking and demand reflection, and while all are very important to consider, the author of this article found questions two and seven to be particularly crucial in the exit from his latest business venture. The process highlighted the fact that most business owners have an unfounded and often unrealistic understanding of who could acquire their business and what it may be worth. Throughout the phases of startup, growth and exit out of the company, the author, together with his business partners, continually evaluated the business through the eyes of potential suitors. By beginning with the end in mind, the decisions made in the cycle of the company’s existence always served to position the company to maximize its value. The mantra guiding this ever-present process stated: “By building your company to last, you simultaneously build it to sell.” Our major focus in this effort was creating shareholder value, which then guided the necessary steps to develop a business model that could be sold at any time. The planning process to sustain this approach included numerous formal activities including audited financials, quality of earnings reports and detailed market analyses, which ensured that the company was always positioned and prepared for any type of exit or recapitalization event.

At some point, every business owner will exit his or her venture, and by laying the proper groundwork ahead of time, the process can lead to the realization of the personal definition of finishing big. Regardless if one is an entrepreneur by definition, operates a family business, or leads a professionally managed organization, putting off preparing for an exit can have catastrophic consequences. Taking the formal steps to prepare ahead of time will contribute to increasing the value of the company immediately, and that value will carry over into the future.

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