Life passes through stages and goals change. When we were 10 years old, many of us wanted to be a fireman; at 16, a rock star. Somehow we ended up becoming a contractor. For many contractors, the passion dies out over the years. After 10, 15, 20 or more years in business, many contractors want to sell the business, turn it over to their kids, or just quit doing the day-to-day grind. But, what can you really do, and what do you really want?
Exploring Some MythsMyth No. 1: Don't confuse human nature and midlife realities with business succession issues. Through the years, many people grow weary of their jobs. We've all heard the term "midlife crisis," but not everyone buys a sports car and finds a younger mate. At 40 or 50, we are more aware of our mortality and want to do more meaningful things. In our younger years, we were perhaps more willing to perform less-rewarding tasks to meet our overall objectives. Boredom can also set in.
Contractors tend to lead an isolated life, and human nature makes us believe our situation is unique. But, look around you; many, if not most 50-year-old corporate employees are tired of their jobs and find much of their work unfulfilling. Don't you think the sales rep who has been calling on contractors for 20 years gets tired of the same old, same old? I can remember teaching a series of seminars in Australia (14 seminars in two countries in 20 days). In the last seminar, a contractor sat in the front row and asked every dumb question I had ever heard a contractor ask. Don't you think I grew weary of this? Fortunately, I was too tired to hit him. So again, don't confuse human nature and midlife realities with business success issues.
Myth No. 2: Understand the realities of finding a business buyer. Selling a contracting business is not all that easy, and few are actually sold to outside buyers. The 90s saw a period where large contractor businesses were packed together in exchange for stock. Many if not most of those schemes failed.
So, if you are going to sell your business, to whom are you going to sell it? Most contracting businesses are sold to key employees or family members. Another option is to sell the business to someone outside the industry who has the necessary capital, but such people are hard to find.
Myth No. 3: So, what is your business really worth? Selling your business is not like selling public stock. You have put years of hard work into it, and it is really more like selling a family heirloom. How do you put a price on the years of hard work you have put into building a business? Most contractors simply want too much money for their business. If your business is profitable, it may be more realistic to hire a person to help run it and continue to own it with more of a hands-off approach.
Myth No. 4: The irony of owner management. The more dependent the business is on the owner, the less there is to sell. So, this brings us to the real problem: If the business is well run and not too dependent or stressful on the owner, there is no need to sell it. So your real goal is to use planning, middle manager development and other techniques to develop an internal operation that makes the business less owner-dependent. Once this is done, you can either keep the business because you enjoy it or sell it to someone else. But until you have this infrastructure in place, you really do not have anything to sell. Developing such a team and plan will probably take outside help and three to five years to accomplish.
Myth No. 5: Family succession - managing from the heart and not the facts. We could devote this entire article to family business succession and still leave much to be said. The simple truth is family dynamics bring emotions and relationships outside of normal business facts. Making decisions with your heart and avoiding realities will cause lots of problems and pain.
Trying to be fair may destroy things for everyone. If you have three children and all have different skills, leaving the business to them equally will not work. First, it is doubtful the business will now support three families. Second, if one person is the office manager, one a foreman and the other runs the business, paying all the same and having equal ownership will be a disaster waiting to happen. A business owner should never be in partnership with a foreman, whether that foreman is his brother or not. Partners must work together in semi-equal positions.
Consider having an independent third party or office manager help with this plan. You really need someone on the outside to help draw a development plan driven by realistic expectations.
Myth No. 6: Developing wealth outside the business. If you want to get away from your business, you need to develop wealth outside of the business. Having all your finances tied up in the business may not make sense. Consider hiring a good financial planner to help you with this task.
Also, remember that running a business can be financially rewarding. Making a six-figure income generally requires stress and hard work. What are going to do, quit your job and become a bellboy, factory worker, store greeter or game warden? Are you really willing and able to make that type of financial sacrifice? (By the way, not all jobs that are stressful have high income. Try being a policeman.)
Myth No. 7: Life after and outside of business. So, if don't own the business, what are you going to do every day? At first playing golf, traveling, gardening, or whatever will be fun, but boredom will eventually set in. Think about what your perfect business and personal day will look like in five years. What do you really want, and what would make you happy? This is not nearly as easy a question as it first appears. Most contractors who join our PROSULT™ networks do so to make more money. If suddenly you make more money than you ever dreamed you would ever have, what will it take to make you happy? You can't blame your business anymore.
Back to RealityEnough about myths, let's focus on reality. If you are unhappy with your business, you need to build a business you are happy with - and if you are still unhappy, you have to deal with that underlying cause. As a business consultant, my role is to help you build a business that makes you happy. For most burned-out owners, this means change.
If your business is not profitable, you must work to make it profitable. The numbers will tell you this. Once the business is profitable, you can use these profits to build a format that you enjoy and that is less stressful. Remember, if you make money, you can use that money to grow and fix the business. If you are trying to grow as a way to fix the business, it will simply require more stress, more capital, more employees, more sales and more burnout.
Building a less owner-driven business requires time, planning, personnel development and a different management style. This generally takes three to five years to complete. So, now is the time to get to work on that plan. When you make these changes, you'll be surprised how much more enjoyable and successful your business will become.
There is an old joke about there being a place where people gather who hate their jobs; it is called a bar. The trick is not to go to the bar and complain, but rather to get out of that bar and change your life. Stop blaming your employees, customers and business; instead, work to build a less owner-driven and more enjoyable business.