Yogi Berra said, "If you don't know where you're going, you might wind up someplace else."
Seminal business writer and Inc. editor-at-large Bo Burlingham, author of Small Giants, has done it again. His new book, Finish Big, just came out and it fills a gaping hole in the literature of the "entrepreneurial exit." It should be read immediately by anyone who is a successful entrepreneur, but with even more alacrity by the tyro business striver. Much like what Yogi Berra intends to say in the above quote, Burlingham avers that all small businesswomen and men need to begin their businesses with a clear eye to their endgame as an integral part of developing successful capitalist enterprise.
As Burlingham puts it, "Let's begin with a general rule: The earlier you start preparing for an exit, the more likely it is that you'll have a happy one." He notes that many entrepreneurs who've been through the whole exit process will tell you it's much harder to leave a company than to start one. He points to the old saying: "You should build a business today as if you will own it forever but could sell it tomorrow."
Burlingham bases his book on two fundamental assumptions:
1. All business owners will eventually have to leave or exit their roles as CEOs and owners.
2. Every company, large, small, or middling, will inevitably be sold or liquidated.
As entrepreneurs we do not want to think about the end of our company. It's like people who put off their will because they don"t like to deal with the inevitability of death. (Indeed, Paul Saginaw, Co-founder of of Zingerman's Delicatessan in Ann Arbor, MI, at one point tells Bo, "Currently our exit strategy is death.")
Also, planning for an exit is surely the last thing any of us would want to consider when we gaze on that Mt. Everest of urgent tasks each of us has waiting on the desk every day. As Gary Hirschberg, the chairman and co-founder of Stoneyfield Farm, puts it, "Everything you do in business is preparing for the endgame, whether you know it or not. A lot of us don't know it because we are so focused on survival."
Furthermore, the odds are bloody well against you in making a successful exit from your firm. Burlingham points out that a U.S. Chamber of Commerce study found that only 20 percent of companies put up for sale ultimately are sold, meaning that four out of five prospective sellers are unsuccessful. He estimates that between 65-75 percent of owners who would like to sell never even make it into the market.
Bo describes eight common qualities and actions of owners who make good exits. They are (to paraphrase):
1. Having a crystal clear understanding of who you are, what you wanted out of your business and why.
2. Consciously building a sellable company over the lifespan of your firm.
3. Allowing plenty of time to prepare.
4. Preparing a successor and allowing time to be wrong about that choice at least once.
5. Seeking help from colleagues and advisers who have gone through the process.
6. Taking care of your employees and investors.
7. As a seller, being very cautious--and understanding the essence and motivations of buyers.
8. Being aware of what you want to do next and allowing yourself personal time to "metamorphose" into a new identity.
Finish Big is a highly readable book, rich in original research. It draws on Burlingham's lifetime of enduring and intimate relationships. He's a remarkable storyteller and his book is full of telling personal anecdote. (He conducted more than 75 interviews with current and former business owners about their business exits.)
But, for me, the best thing about Bo's Finish Big, as with his celebrated previous book Small Giants, is his pure love of entrepreneurship and the entrepreneur. This love is palpable and personal. He writes with a deeply imbued spiritual generosity and sense of service to our entrepreneurial community. Yet he is unsentimental and even can be quite rough on some of his very human subjects, though never without sympathy. Burlingham truly cherishes the questing, courageous, non-venal qualities of great entrepreneurial owners, with a writing style that is not self-aggrandizing, yet is authoritative.
Serious entrepreneurs should read Finishing Big. Now, not later.