For some entrepreneurs, there are more important elements to an exit strategy than just getting top dollar for their business.
Recently I ran into an old friend – let's call her Melanie – who is in the midst of exiting her successful marketing firm. Like Roger Sterling and Bert Cooper of the hit TV series Mad Men, most marketing agency founders dream of selling out to a big multinational holding company. Melanie had chosen a different route and her story provides guidance to anyone looking to leave his or her business with a touch of grace.
I had come to know Melanie a decade ago after I'd invited her to sit on the advisory board for one of my companies. At each meeting, Melanie would sit quietly and periodically ask questions—good questions. She didn't grandstand or pound the table, just steadily listened and offered the occasional opinion based on her experience.
The most animated Melanie ever became was when the conversation turned to the impact my decisions had on my staff.
I can remember one meeting in particular at which I was describing my long-term goal to sell my company for a specific amount of money. Melanie listened for a while and finally interrupted: 'John, how do you think your employees would feel if they heard you right now?'
Her question made me realize how self-centered I sounded and how unappealing I appeared at that moment. Melanie continued, 'Your employees need to know you have a vision and goal for your company beyond just the money you stand to gain when it sells.'
From that day forward, I came to count on Melanie to be my conscience and checked in with her on key decisions that would affect my employees.
When I saw Melanie a few weeks ago, a decade had passed since that fateful meeting. Her kids are going to college next year, and Melanie has built a capable management team to run her business day to day. With her life evolving, she was starting to turn her attention to exiting her firm.
I asked Melanie if she planned to sell to one of the big multinational holding companies. Her response was in keeping with the Melanie I had known years ago: 'Why would I want to sell out to a large agency holding company and report to some boss in New York or London for the next three years?'
'But isn't that the typical exit plan for a business in your field?' I asked.
'Yes. But I'm not going to sell out to some soulless multinational just to have another million dollars in the bank. I plan to be financially independent before I sell my company, so I'd rather sell it to my employees over time and see them preserve the culture we've built.'
Both then and now, I marvel at Melanie's ability to put her people first.