"Every Owner Should Define What Success Looks Like"

In their recent Harvard Business Review article, “Every Business Owner Should Define What Success Should Look Like”, authors Josh Baron and Vlad Barbieri highlight and effectively describe the need for a well-defined “Owner Strategy” for an owner and their business.  The authors provide a short account of Elisa and Mark’s watch business and how they needed to decide whether the business was a “passion project or growth machine” paints a clear picture of the importance of a thoughtful and well-defined owner strategy.

The article is concise and effective in addressing an essential but often overlooked aspect of business owner planning. Also provided is a simple yet impactful framework for creating an owner strategy for the business that is based on the personal goals of the owner for the business.  A strategy that “generates alignment among owners, board members, executives, and employees, which in turn, improves both performance and satisfaction.” And we would only accentuate their recommendation of clarifying the owner’s personal goals not directly related to the business (i.e., family, estate planning, travel, legacy, etc.). As well add that determining how the owner eventually would prefer to leave or exit should influence an owner’s decision regarding a strategy of “Growth - Control, Growth - Liquidity, or Liquidity – Control.”

An investment of a few minutes reading the Baron & Barbieri article could have a huge impact on your future business growth and exit.

Please do not hesitate to contact us for assistance with establishing your owner-based goals and owner strategy for the business.  In the meantime, you can also access online resources at exitreadiness.com.

What Your Birth Certificate Says About Your Exit Plan.

In our experience, your age has a big effect on your attitude towards your business and how you feel about one day getting out. Here's what we have found: 

Business owners between 25 and 46 years old 

Twenty- and thirty-something business owners grew up in an age where job security did not exist. They watched as their parents got downsized or packaged off into early retirement, and that caused a somewhat jaded attitude towards the role of a business in society. Business owners in their 20’s and 30’s generally see their companies as means to an end and most expect to sell in the next five to ten years. Similar to their employed classmates who have a new job every three to five years; business owners in this age group often expect to start a few companies in their lifetime. 

Business owners between 47 and 65 years old 

Baby Boomers came of age in a time where the social contract between company and employee was sacrosanct. An employee agreed to be loyal to the company, and in return, the company agreed to provide a decent living and a pension for a few golden years. 

Many of the business owners we speak with in this generation think of their company as more than a profit center. They see their business as part of a community and, by extension, themselves as a community leader. To many boomers, the idea of selling their company feels like selling out their employees and their community, which is why so many CEO’s in their fifties and sixties are torn. They know they need to sell to fund their retirement, but they agonize over where that will leave their loyal employees. 

Business owners who are 65+ 

Older business owners grew up in a time when hobbies were impractical or discouraged. You went to work while your wife tended to the kids (today, more than half of businesses are started by women, but those were different times), you ate dinner, you watched the news and you went to bed. 

With few hobbies and nothing other than work to define them, business owners in their late sixties, seventies and eighties feel lost without their business, which is why so many refuse to sell or experience depression after they do. 

Of course, there will always be exceptions to general rules of thumb but we have found that – more than your industry, nationality, marital status or educational background – your birth certificate defines your exit plan. 

Find out how ready you are with our FREE ExitMap Assessment.

A Rich Legacy

Our client and friend Peter Giglio, Sr, owner of Gaithersburg Garage Door has built a profitable and reputable local business over the last twenty plus years in Montgomery County, MD.  Pete and his team are focused on being the best garage door dealer, installer, and service company in the Washington DC area.

Not unlike other successful business owners we work with, Pete has strong core values that have guided him through the years in all aspects of business ownership, such as service to others, diligence, and integrity.  He regularly envisions his team with "The upward spiral"  which begins with "top-notch service to customers" and results in higher revenue and "top-notch compensation" for his team members.  Pete's core value of service to others (i.e., customers/employees) has been anchored in GGD for decades through his frequent communication of the upward spiral.

The upward spiral is just one example of how Pete has been intentional in expressing care for employees, customers, and his family through the business.  Again, like other successful business owners, he is characterized by generosity toward the community and others and has strengthened the local economy through job creation, doing business with suppliers and vendors, and producing needed products and services.  Pete also works hard to foster a peaceful and unified team environment. 

Business owners like Pete produce much good for others and the communities in which they live. The legacy being built is rich with significance due to their vision and values, and it requires years of diligence, planning, perseverance, service to others, and risk taking.  But, the building of a business is just one phase of building a legacy for a business owner.  The way in which that owner eventually leaves the business (successful or unsuccessful) is possibly the more critical phase of a business owner's legacy, as the future well-being of the business (and all the good that comes from it) much depends on how well that owner plans their exit.  Everything the owner has worked to establish through the years that affect their legacy is at stake when they exit.  No matter what exit route the owner chooses to accomplish their goals, the manner in which it is executed will have a lasting and far-reaching effect on their legacy.

What are your values-based goals for legacy pertaining to family, employees, customers, community, and others?  What have you built and facilitated through your business, and assign great value to, that you desire to see continue as part of your legacy?  Get started planning now for the event that will play a most significant role in determining your desired legacy....your eventual and inevitable exit. 

There is an old Chinese proverb that says, "The best time to plant a tree was 20 years ago.  The second best time is now."