In his book the E-Myth, Michael Gerber said, “the purpose of starting a business is to sell it.” And this got me thinking…
At that time, Darren and I had been running our printing business for almost 10 years and we were working just as hard then as we had at the beginning…
We got together for a “strategy” session and after a long talk we both realised we had no succession or exit plan at all.
We could continue as we were and earn a decent wage but what would happen if either, or both of us were to become incapacitated or worse, dead?
What about our families? Who would provide for them? What would happen to our company, the staff, customers and suppliers who relied on us?
We’d spent 10 years wrapping the business around ourselves. If we weren’t there to do it, it wouldn’t get done. Crazy thing was, we were actually proud of that fact. I actually remember once saying, “Phew, if I wasn’t there to sort that out, the business could have failed!” What a dumb ass!
I think it was Ralph Nader who said, “The function of leadership is to produce more leaders, not more followers.” But we’d successfully achieved the polar opposite!
We knew we had to take action but we also knew that the solution wasn’t going to happen overnight. We had to restructure the business around systems and processes, taking ourselves out of the equation. And we had to build a leadership team that could take over the company day to day and maybe even buy it off us.
And so, shortly afterwards, we sat down with two 16 year olds, my son Tom and his good friend Bob, sold them the idea of how they could, by the time they reached 26, become business owners.
But what do 16 year olds really understand about entrepreneurialism, about people management, about selling, finance, operations or health & safety? At that time, the lads were more interested in football, Xbox and girls… and possibly not in that order!
We set about creating a training programme to take our intrepid duo through their paces. They would start at the bottom and spend 6 months in each department of the business learning all the tasks that the other team members
were carrying out. After 3 years they could then “specialise” in the department of their choice and where their natural skills shone.
At the same time, we wanted their formal education to continue and used the vocational NVQ process to enable them to earn qualifications whilst working. If the business should ever fail at least they’d be qualified and could get jobs elsewhere if they had to.
It was working, the dynamic duo was proving to be a great addition to the team.
In their 4th year we started them on leadership & management training and Bob, who by this time had shown a are for numbers, started to work in the accounts department. Tom meanwhile had gotten interested in sales and began to build a customer base of his own.
AFTER A LONG TALK WE BOTH REALISED WE HAD NO SUCCESSION OR EXIT PLAN AT ALL
Earlier this year I’m incredibly proud to say, Tom and Bob joined the Board of Directors of that business and acquired a small shareholding at the same time. The first step to becoming ultimate owners. The business now turns over £1.3m and has been pro table every year since it started in 1998. Tom is now a Member of the Chartered Management Institute and Bob is studying to become an AAT qualified accountant.
Whilst many of their friends left university with degree’s and loads of debt, Tom and Bob are now qualified, have no debt and earned more than £60,000 during the same period.
We hold board meetings monthly and the leadership team presents their reports on the performance of the business and we review the KPI’s we’ve agreed. Just one sheet of A4 paper that tells us our critical numbers; Turnover, Gross Profit, GP Margin, Net Profit, Liquid Ratio, Cash Flow and others. There’s loads of other detail available if we need to delve into the minutiae of course.
The success of this programme has led us to put together similar processes in our other businesses.
During 2015 we acquired three small businesses and merged them in with our existing ones then re-structured our group to create two companies.
Led by Rhys & Scott, Riskmonitor focuses on consultancy and training within the statutory compliance sector for people and buildings. Health, safety and re are the specialities of the team and we’ve built systems to deliver their services simply and professionally.
Webfibre is our IT support services business. Led by Ben & Cliff, they design bespoke software for the web, back office and mobile devices. They also provide direct response marketing support services or as we like to call it – done with you! They also have a games development arm called Candlhat (no spelling mistake) so watch out for that in the future.
Has this all gone off without a hitch? Well, I’d be lying if I said there weren’t challenges throughout the process. Tantrums, self-confidence issues, frustration and disappointment have been regular visitors – and that was just me and Darren!
But it has been an amazing journey that we could not have undertaken without the incredible support of the mastermind colleagues we’ve had during this time. The support mechanisms have been immense for us and long may they both continue.
So where does that leave Darren and I?
Well, we now sit firmly in the holding company and support our leadership teams wherever we can. Darren does everything he can to interfere with any old systems to refine and improve them, a skill he has in abundance.
And me, well I now use my time to provide coaching to our people, helping them to realise their incredible potential and of course add value to themselves, their staff and our company altogether.
But best of all, it’s freed me up to get more involved with Renegades and we have a number of exciting ventures planned for the next year or two so watch this space as they say…
So don’t make the same mistakes as I did, don’t build your business around you or any other single individual for that matter. Install systems and procedures that are completely independent of people.
And start building your vision, strategy and exit plan today. It doesn’t mean you have to exit/sell but it will mean you could if you wanted to or had no choice.
