Legal matters, business strategy, and life perspectives from the mind of a non-attorney.
Built to Sell Radio is a weekly podcast for business owners. Each week, host John Warrillow asks a recently cashed out entrepreneur why they decided to sell, what they did right and what mistakes they made through the process of exiting their business.
As an Exit Planning Advisor, I was excited to discover this podcast based on its topic category alone.
I was thrilled when I listened to an episode to find that John Warrillow is an absolute gem as a host.
My jaw hit the floor when the podcast responded favorably to my request to write a monthly article based on their episodes.
It’s the thing we haven’t been able to give to our readers. That is, the perspective of business owners who have gone through the rigors of exiting a business.
After all, I can talk about Exit Planning until I’m blue in the face.
I can tell you the best practices for Transferring Ownership to Children.
I can even explain Private Equity like I was speaking to a 7 year old.
But when it comes right down to it, you don’t want to hear about this stuff from some hot-shot advisor. Nope. You want to hear it straight from the horse’s mouth.
Let’s do it.
Scott Miller owned Miller Restoration – a company specializing in residential fire and water damage restoration – for 12 years before ultimately selling the $3 million-per-year-company for a 3.5x multiple in 2018.
On two previous occasions, Scott tried – and failed – to come to terms on a deal. The meat-and-potatoes of this episode comes from Scott’s dialogue as he reflects on those failed attempts.
John Warrillow: “You shared earlier that you had gone through a couple of ‘false starts’ with potential acquirers. At what point did you start to think, ‘Hey, it’s time to sell.’? Was there a triggering event?”
Scott Miller: “There were a couple different phases of that. Earlier on, maybe about 5 years into the business – I listed it. I just didn’t like it anymore. I felt like I needed to do something else with my life. I had a 1 year listing agreement with this person and he didn’t bring one potential buyer.”
“For a few months I was angry that he wasn’t bringing me anyone. But then I thought to myself, ‘You know what? I have a good team, and I’m making a good income… This isn’t so bad.’ Maybe this is just for the best. And I didn’t relist it.”
“I never disengaged during that listing period. That was really important. I had kept growing it during that time and identified the things that I didn’t like to do and delegated and hired so that I didn’t have to do those things.”
Do you buy or sell that Scott Miller made a critical mistake when he delegated tasks that he didn’t like doing?
In the last 2 weeks, I’ve heard 3 different business owners reflect on the reasons they began reorganizing the structure of the business, building systems and processes, and delegating tasks. All 3 identified a failed attempt to sell their business as the main reason. Somebody literally told them, ‘Hey, I’m not interested in the business unless you’re coming along with it.’
As an Exit Planning Advisor, listening to a business owner talk about delegating and hiring is music to my ears. It is easily one of the top 3 things that all business owners can do to increase business value.
In Scott Miller’s case, he didn’t do it because someone told him to, and he didn’t do it to create business value – he did it because he was plain sick of doing certain things every day. In the end, his reason for doing it doesn’t matter. The fact that he began delegating at this point was absolutely instrumental to the eventual sale of the company for a 3.5x multiple.