For entrepreneur Seph Barnard, selling his company had nothing to do with money or prestige. He was simply too exhausted to do anything else.
It wasn't money or prestige that tempted Seph Barnard to sell his company. He just needed to get some rest
One day in January, as Seph Barnard looked forward to closing the books on another record year, he found a pleasant surprise in the mail. It was a letter from a prominent investment-banking firm stating that a large corporation was interested in acquiring his company, Tape Resources (#479), which distributes audiotape and videotape to such customers as television stations and production companies.
Barnard knew that a big company in the office-supply industry had already snapped up two of his largest competitors, and he took the letter as affirmation that his $5.6-million business, which he ranked as the industry's ninth largest, had risen to become an important player. "I said to myself, 'We've hit the big time," Barnard remembers.
The company, based in Virginia Beach, Va., hadn't reached that level of recognition easily. Since customers could buy the same professional-grade Panasonic or Sony tape from anybody, Barnard had worked hard to differentiate Tape Resources, always adding extra services aimed at building enduring loyalty. If you called in your order by 5 p.m., the company made sure it was on its way that day. To ensure that customers always talked to a friendly voice, Barnard instituted extensive training that included putting mirrors in front of those customer-service reps who needed a reminder to smile.
If the strategy placed an extra burden on his employees, who now number 13, Barnard was willing to reward them for it. At year's end, if the company had achieved its financial goals, employees would receive an extra month's pay. Last year was the fourth consecutive year that they had received a bonus check--confirmation, for sure, that Barnard's strategy was paying off.
Barnard knew that selling the company would bring a nice check for him, too. Based on other purchases the buyer had made, he figured he could walk away with at least $2 million, which would provide financial security for his wife and young son.
But Barnard, who began negotiations right away, had an even stronger reason to sell out. And those around him knew it. "We could see it building," says sales manager and vice-president David Durovy, who owns 20% of Tape Resources. The truth was that at the age of 43, Barnard felt he had reached the breaking point. Years of working long hours and worrying about every aspect of the company had left him exhausted. He was looking to get rid of the company because of what he felt it was doing to his life--namely, ruining it. "When you're feeling fatigued, you don't care anymore," says Barnard. "Just take the company and give me something for it. I could get rid of my worries and end up with money."
Few entrepreneurs start companies to fulfill a dream of someday managing a full-fledged business. More typically, their strength is in finding a new market and then establishing a beachhead from which to invade the marketplace. At a certain point they may even recruit an outsider to manage day-to-day operations while they concentrate on broader strategic issues or perhaps move on to their next start-up.
To take that step, though, they have to know which aspects of building a business energize them and which parts they find draining. Are they at their best in the start-up phase? Does their need for absolute control make it unwise for them to stay at the company's helm once it has grown to a certain point? Entrepreneurs who don't know the answers to such questions may place their companies--and themselves--in some jeopardy when they reach the limit of their energies.
Unless, that is, they are forced to confront what their own exhaustion has cost them--by an illness, say, or a family crisis. Or, as in Seph Barnard's case, by a tempting buyout offer. "I was always vacillating, what with the money and the joy of not having to worry about Tape Resources again," he says.
That's a startling admission coming from someone whose entrepreneurial career has been characterized by caring fiercely. "I'm an opportunist. When I see an opportunity, I jump on it," says Barnard, a native of South Africa. "When I see a problem, I have to fix it. I can't say, 'Oh, we'll have a few teething problems.' That's not an option for me, unfortunately."
He first got a sense of his options in 1986, when, along with a couple of partners, he launched Features International, which provided production services for makers of documentaries and ads. As vice-president of production, Barnard traveled throughout the world on video shoots. "I was always for growth," he says. "I felt I was the lone ox pulling everything along. Everybody was content, but I was never content." After five years of "being the guy who would work 16-hour days," Barnard reached the point where "I just needed to take a break. I couldn't function." So in January 1989, he took a leave of absence. "I didn't know if I would come back," he says.