Learn how selling your landscape company may not be the best way to create wealth and provide you the freedom you are dreaming of.
There is so much talk about people wanting to sell their company, or the dream they have to sell their company some day. It’s sort of the American dream to build your company, sell it, have all this money, retire, whatever. My argument is, and you’ve heard it before, why is that necessary?
Your life after you sell your business may not be all that you imagine. Here is why…
Recently I recorded several videos about selling your company and it is something that I’ve thought about for years from different experiences I’ve had in business. This goes all the way back to mid 2000 in terms of experience in selling your business and thinking about it. It is a topic that I am very aware of and it is a topic that affects both the very small business owner and the multi-million dollar business owner because in both cases you are thinking about it. Many times it is the dream of both, the small guy and the big guy. The little guy a lot of times is in the middle of being frustrated and burned out and dreams of the day he can walk away from their business. The bigger guy might have those exact same dreams, because as you get bigger, your problems don’t necessarily go away. You just have different problems.
I think that it is an important topic to think about no matter where you are in business even when you are small. The reason for that is, as you build your company, if you are building just to sell, you build your company completely different and you work on your business in a completely different way. You are more worried about building top line revenue and growing profit as fast as you can whereas, in my opinion, if you are building your company to keep it, you are more worried about culture and people and procedures and systems and things of that sort. Not that you don’t worry about those things when you are building your company to sell it because all of those things help you get your company sold at maximize price. Yet you just think about things at a different level.
You want to make sure when you are going to keep your company, that you are still going to want this thing in 5 or 10 years. Whereas when you are building it to sell it, you might mentally let certain things go and say, “I don’t care. That’s going to sort of be the next person’s problem.”
I said all of that to lead into a point. I was talking with someone that I am friends with that is very successful, has built multiple very successful businesses, and is at a point where he can take off for 1 or 2 months at a time easily. I am not at that point anymore because I have Service Autopilot. I couldn’t be gone for 2 months. Whereas, this individual can and what he has observed from being gone for quite a period of time is it gets pretty boring because all of your best friends still have jobs. They are still working and you can’t just call them out there in the middle of their life. They can’t necessarily just take off and travel. They might have kids or maybe you have kids and your kids are going through school and your kids have sports.
What he has observed and even other individuals have said the same thing. The idea of selling and walking away, not really having much to do sounds wonderful but, the reality of it is, once you do that, what do you do? Who do you do it with? Everybody else still has a job and everybody else is still working and not everybody else can get away.
I say all of this because I think back in the beginning, you need to know whether you are building to sell or building to keep. You may change your mind but you at least need to know up front because if you are building it to sell, then you are going to do things differently than if you are building it to keep. And what if eventually you have the realization that you know what, maybe selling isn’t as great as I thought it would be. Maybe I should focus more on building a great company, one that can run itself. Maybe I should focus a little bit more on solving some of these problems in my business instead of ignoring them because I think they are going to become somebody else’s problems down the road.
My point of the video is to consider, and maybe try to look at if you were to sell the company, meaning that you are not going to work as hard on building a great company that you’ll own in 10 years. If you are building it to just sell it, what will you do when you actually sell the company? And, if there is a way that you can experience that and find out for yourself, I think that might change your attitude on selling. The other thing about this is I have known a number of people that have sold their companies and become very bored very quickly and in most cases they’ve sold their company and within a couple of years were disappointed that they had. Even though they made a lot of money, they miss being in the game, they miss having the friendships, they miss being challenged and they miss all of that.
This is two fold. One, try to figure out for yourself exactly what you’d really do if you sold this thing and you had 3, 5, 6 months a year to do nothing. What exactly would you be doing in your life? Is that really something you want? And two, once you have that answer, what might you change within your business, the way you are doing things, or the problems you are not solving, to make it a company that you do love that you will want to keep 10 years from now.
In this video, Jonathan describes the three main roles you take on in your job as CEO.
It’s January and this is the month you set the tone for the rest of your year. If you nail this month and you nail this year, it sets you up for the next 5 years. If you are running a larger company, something that I’ve struggled with and I’m still working on to this day, is to remind myself of what I’m about to tell you. I hope it’s valuable for you because it’s incredibly valuable for me when I actually live what I’m about to tell you. I try to do it every single day.
Your job as the owner, as the entrepreneur, as the individual running a larger company, one that does a few million and up gross revenue, is to recruit the very, very best people you can possibly recruit on to your team. You want to spend a lot of time in this area.
Your next job is to make sure you filter out and get rid of everybody that is a drain on the company and anyone that hurts the culture and the morale of the company. You are in the employee management business. You are recruiting the best. You’re getting rid of the under-performers that hurt the team.
Then, your job is to remove the bottlenecks for your team. You’re supposed to make life easier for them, help them stay efficient, help them work fast, help them progress in their area of expertise in whatever it is they provide and do for the company. You want to set the strategy for the company. You want to make sure that everybody in the company is working that plan.
You have the big vision. Where are you going in 5 years? You set the strategy. You make sure everybody’s working that plan and then you remove bottlenecks for your team. That means you might have to get contractors involved. It might mean you have to hire another employee. It might mean you need to fire an employee. It might mean that you need to help an employee get educated in a certain area but you’re there to remove their bottlenecks.
Your typical day looks more like coaching and critiquing, giving advice and feedback, and redirecting and assisting more than anything else. When you reach that point, you’re living the life of what a CEO should be doing. You’re not doing all the work. You’re more delegating and coaching and advising.
Your job is to think and lead. If you’re doing that then you’re achieving what you need to be doing to get your company to the 5 million, to the 10 million, to the 20 million dollar mark. None of it’s easy. I struggle with all of this. I did it better at CitiTurf than I’ve done it at Service Autopilot probably because I’m a little more passionate about Service Autopilot. I’ve stayed in the thick of everything longer than I should’ve and so I’m talking to myself just as much as I’m talking to you.
I hope this gives you some encouragement to really focus on that in January, February, March and the rest of this year. If you’re still a smaller company, work as fast as you can to get yourself into that position and that’s when everything really starts to accelerate inside your company.
Should you sell your landscape business? Listen to the video to find out the 4 reasons you should make that move.
I often hear so many people talking about wanting to sell their company. Many people want to build their business for the next three years and then want to sell it. I’m sure I’ve said this in other videos. But, my argument is, if you build a real company that’s capable of running itself for the most part, if it doesn’t require your constant involvement and it makes you a nice amount of money, why would you want to sell your landscape business?
In my mind, the only reasons that you’d want to sell that business is one, you’re looking out into the future and there’s something that’s going to change from a technology standpoint or a market standpoint that is going to potentially seriously handicap your company. Or two, if your company’s worth, say, one million dollars and you currently make $100,000 a year off of that business, you could sell it, take the million less the taxes, and you can reinvest it and make more than $100,000 a year. The math would be you sell the company for a million, you get to keep 700,000. You now can take that 700,000 and you could earn 140,000 a year on that money.
Now, in the example I just gave I think that’s something like a 20% per year return, so good luck with that. That’s not easy. To get big returns like that you’re going to be an active manager in the next thing you’ve invested in. It may even be high risk and you have a chance of wiping out that principle.
A third reason you’d get out of the business is if you just simply hate the business or the industry so much and it’s not fixable, meaning you can’t turn it into a real company that runs itself, or you’re just completely sick of it and unwilling to do it. If you’re just completely fed up with the business and you’re just treading water, the business will eventually end. It will go under, and if you’re not willing to fix that or change that, then you’re probably better off selling the company, because eventually you’ll get nothing for it.
The fourth example is that you’re burned out, tired, and worn out. If you’re not willing to do the work to become a new person, to learn how to be a CEO, learn how to motivate and train your team, learn how to build a real company with some processes and procedures, learn how to do marketing and sales, your company will grind to a halt. If you’re not willing to do some reading, and maybe go to some conferences and network with other people, and really learn the business and learn what it takes to grow yourself and grow your team into the people that you require to be a great company, I would say you’re probably better off to sell your landscape business…maybe even getting a job.
I know that sounds really harsh, but these are the reasons you would sell. The idea of just selling to get a big amount of money, it generally has to be so big that you’re probably not really set. So the idea of selling is generally not the best approach to have in mind. The items that I just gave you, those are the reasons why you’d sell. I’d recommend that you look hard at building a real company that can run itself so that you have no need to sell…unless you just absolutely want to or get offered an insane amount of money to do so.