The Go Beyond Exit is a recipe for improved business leadership, successful business transition, personal growth, and a happier life.
Go Beyond LLC was founded on the idea of helping business owners “go beyond what the world expects.” When people hear that, the question usually follows, “Well, what does the world expect?” The world expects you to struggle, to muddle through, and settle for marginal results. But the Go Beyond Way shows you how to create and nurture an environment where people become brave enough to be self-starters who consistently do their best; and it helps you craft a clear and compelling vision that pulls people forward rather than having to be pushed and prodded. It is a way to become best-in-class, keep your integrity intact, and create astonishing value for all stakeholders.
Blending the Go Beyond Way with the Value Acceleration Methodology
Blending the Go Beyond Way with the Value Acceleration Methodology created by Chris Snider of the Exit Planning Institute (EPI), this article introduces The Go Beyond Exit, which is embodied in the following six principles: embrace the truth, empty your cup, chart a course, do the work, eat your cake, and share the blessings. Presented as a logical sequence of steps, each principle also stands alone as a best practice. Taken together they are a recipe for improved business leadership, successful business transition, personal growth, and a happier life.
Embrace the Truth
In his landmark book Good to Great, Jim Collins introduced the concept of confronting the brutal facts, along with is companion concept The Stockdale Paradox. As examples of these concepts, Collins selected Winston Churchill during the darkest days of World War II and of course former prisoner of war, Admiral James Stockdale. The essence of these dual concepts is that “you must maintain unwavering faith that you can and will prevail in the end, regardless of the difficulties, and at he same time, have the discipline to confront the most brutal facts of your current reality, whatever they might be.” (Good to Great)
The Optimists Perish
During their in-person encounter, Collins asked Stockdale about who didn’t make in out of the North Vietnamese prison camps. The admiral responded without hesitation, “The optimists.” He explained:
“The optimists. Oh, they were the ones who said, ‘We’re going to be out by Christmas.’ And Christmas would come, and Christmas would go. Then they’d say, ‘We’re going to be out by Easter.’ And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart.”
After a few more minutes of walking together, Stockdale turned to Collins and said, “This is a very important lesson. You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.”
You might say that applying these principles to your life and business doesn’t sound difficult. After all, you are not facing a Nazi invasion or trying to survive in a brutal POW camp. But let’s aim embracing the truth at the one target most people don’t want to look at too closely: the self.
“You shall know the truth, and the Truth will set you free.” (John 8:32)
This ancient wisdom was demonstrated by the Desert Fathers, Christian ascetics of 3rd – 5th Century AD Egypt. Their courageous practice of radical self-honesty freed them from illusion and self-deception, allowing them to avoid obsessions and self-destructive behaviors, as well as to be kind and patient with other people.
In the context of The Go Beyond Exit, embracing the truth begins with a clear-eyed examination of your own strengths, weaknesses, fears, motivations, and character traits. Humility is not holding yourself in low regard, it is thinking rightly about yourself and not considering yourself to be better than others. Thinking rightly about your path as a business owner means mentally stripping yourself of all trappings of authority, affluence, and social standing. Who are you without your business? What do you value most? Who do you want to become? What meaning do you want your life to have?
Plenty of People Have Helped You
Embracing the truth about yourself will show you that you did not arrive at your current station in life solely by your own efforts. Plenty of people have helped you along the way, and many are still helping you. This realization will help reduce pride and foster increasing gratitude.
Thinking rightly about your current situation, means removing optimism from your calculations without losing faith that you can achieve your personal, financial, and business goals.
80 Percent of Businesses Never Sell
In the context of lower middle market businesses (those with annual revenues between $5 million and $100 million), statistics show that 80 percent never produce financial independence and wealth beyond income for the owner. To be more direct, they never sell. Moreover, of the 20 percent who do successfully sell their businesses, three out of four responded that they were unhappy a year after the transaction. The statistics are even worse for businesses with less than $5 million in annual revenue.
Now take a good long honest look at your business. Can it run without you, or are you the driving force? Do you offer a diversified catalog of products and services to a broad group of customers, or is your business a “one trick pony” with too much riding on too few customers? Is your business operating at or near best-in-class, or is it barely getting by? How much might a potential buyer pay for your business? If you don’t know where to start trying to answer these questions, contact a certified exit planning advisor (CEPA) in your area. They can perform assessments of your business and provide a strategic indication of value. You’d then understand the factors driving the value of your business up and those factors that are dragging it down.
Empty Your Cup
The 15 century-old Zen Buddhist admonition “Empty Your Cup” has many meanings. A cup that is already full cannot receive anything new. A brain that is already full of knowledge and opinions has difficulty receiving new knowledge or truth, especially if it conflicts with knowledge already held. A human spirit that is full of its own importance and self-sufficiency cannot receive either help from others or blessings from Heaven.
Shed False Identities
If you are a Baby Boomer, especially if you are a male, it is highly likely that you define your identity by what you do for a living. In my life, I have assigned myself labels such as wrestler, West Point cadet, boxer, Army officer, business developer, executive, consultant, and business owner. That last identity, “business owner,” has been the most seductive of all because of the autonomy and self-sufficiency the term implies. In the process of emptying your cup, you must shed all false identities based on primary activity or method of income.
If you are radically honest with yourself and have embraced the truth, you know who you are – who you really are. Being and becoming are more important than doing. So, empty your cup of identities based on what you do, and focus on who you are right now and who you want to become. After all, your thoughts, words, and actions spring from who you are deep inside. This process of coming face-to-face with yourself is not easy, but it is essential to generating ethical personal and financial goals and for developing a plan for life after business ownership that will enable you to live happily and leave behind a legacy.
Get Rid of False Expectations
You must also empty your cup of false expectations born of folklore, wishful thinking, gossip, and well-meant but mistaken information. “Jimmy sold his company for $10 million. My company is better than his, so I should get $15 million for mine.” “Companies in my industry sell at 3 times earnings. All I have to do is improve my bottom line and I will be able to sell for 3 times whatever that number turns out to be.” “No business is unsalable. There is a buyer for every business; it is just a matter of price.”
Rules of thumb usually don’t hold true. Every business exists within an ecosystem. The range of values for businesses depends on general economic factors, the mergers and acquisition cycle, and the market for similar companies. The range of values slides up on down. Where you fit within that range depends on a variety of factors, such human capital, customer capital, structural capital, and social capital. A CEPA can help you figure out where your business really falls within the range of values. Oh, and about there being a buyer for every business…. If 80 percent of businesses that go on the market never sell, there are plenty of examples of unsalable businesses out there without a buyer.
Chart A Course
Decide where you want to go, then figure out how to get there.
Waiting until after a liquidity event to begin personal planning is a recipe for unhappiness. Peter Christman, co-founder of the EPI, was a successful investment banker who sold many businesses at a premium. However, he noticed that many newly wealthy former business owners were nonetheless unhappy. Upon investigating why this might be, he discovered that all the personal planning was happening after the sale. To have a successful transition, personal, financial, and business goals must be brought into alignment.
In his book, Walking to Destiny, Chris Snider wrote:
“From a personal standpoint, you need to consider things like family and friends, self-worth, self-identity, philanthropy, health, what you do for fun, and for many, your religion and personal spiritual values.”
“Financially, you need to consider your income requirements, risk profile, personal wealth, retirement needs, and long-term health.”
“And for your business, you need to consider things like the direction of the business, factors that drive value into the business, the salability and ongoing viability of the business, the predictability of the businesses income stream, the overall health of the business, and your staff, systems, management succession, and business risks.”
A Holistic View of Your Life and Business
The Go Beyond Exit maintains a holistic view of the owner’s life and the business, with the central factor being what the owner wants life to look like, to feel like, and who the owner wants to be. In separate workshops, we ask the owner to envision first what life will be like in three to five years if they do nothing different, if they just let things coast along. Usually, the picture they paint is unsatisfying. Then we ask them to envision their ideal future, including some things that would be a stretch to accomplish. Bringing their financial planner into the mix, we determine the likely financial requirements for funding that ideal future. Given current financial assets, how much would have to come from the net proceeds of selling the business. Finally, we develop a prioritized action plan for getting from the current state to the envisioned personal/financial future.
Then we do the same thing with the business, envision the status quo glide path of the business, including a strategic valuation to determine the most likely result if the business were sold today. Then we perform preferred future planning for the business, including an assessment of what is driving value into the business and what is dragging value down. We develop a prioritized action plan for protecting and building value to ultimately arrive at the preferred future.
The biggest benefit of going through this beginning process, which Go Beyond LLC calls the Ugokashi (setting things in motion) and the EPI calls the Triggering Event, is clarity. The result is a clear and compelling vision that pulls people forward and sustains action.
The Go Beyond Exit, Part II will cover Do the Work, Eat Your Cake, and Share the Blessings.
Go beyond what the world expects