Blog

October 16, 2013

Built to Fail: Why I walked out on Jim Collins

I’m writing to you from Dulles International Airport in Washington DC where I’ve just come from participating in a panel discussion on exit strategies at the Inc. 500 conference.

I don’t know about you, but I get a little restless at business events these days. Listening to rock star speakers and big brain thinkers on the main stage makes me realize how much work is still left to do with our new company.

The low point came listening to Jim Collins, the brilliant author of Built to Last and Good To Great. Collins reminded me that we don’t even have a mission statement for my new company, SellabilityScore.com. Even though we’re about to celebrate our second birthday, we still don’t have what Collins calls a Big Harry Audacious Goal (BHAG) and our core purpose has been rattling around in my head instead of being written down for employees to see.

I couldn’t absorb any of Collins’ new material because I realized I had missed some of the basics of building a company. I walked out of the session, went to my room, and started typing.

Here’s what I came up with:

Our vision is to be the business owner’s Robin Hood. Most owners have their life savings tied up in their business and many confuse building a big company with building a valuable one. They pour all of their profits into chasing sales for decades, and then eventually realize they have nothing to show for a lifetime of work—because one customer makes up too much of their business or they’re too dependent on one supplier or one key employee.

Or if they’re fortunate enough to have built a sellable company, they then face a mercenary investor on the other side of the negotiating table who preys on the fact that the owner has been too busy running his company to learn the intricacies of selling it. Investors often trick owners into “proprietary deals” where the entrepreneur loses negotiating leverage. They use “earn outs” and “vendor take backs” to shift the risk on to the shoulders of the entrepreneur, even though the entrepreneur has been carrying the load since the beginning. They use financial trickery and lawyers instead of their word and a handshake.

So our mission is to help a million people create sellable companies by 2050.

Why?

Because on our deathbed, we want to know we did something important in the world; something that mattered to a lot of people and families.

“But what if I don’t want to sell?”

That’s fine. You, like most owners are probably years away from wanting to sell, but by starting now, you will create a much more valuable company. Plus, creating a sellable company now makes running your business not only more profitable but also less stressful and more fun along the way.

To us, sellability equates to power and freedom. If you have a business that is sellable, you have all the cards in your hand. When you’re ready to sell, you can sell your company for a premium and control the negotiation because you have options — after all, lots of people want to buy a sellable company.

Even if you know you don’t want to sell for a long time, sellability is important, because at the core of sellability is the idea that your business can thrive without you always being personally involved. That means you can cherry pick the fun parts of running a company and delegate the rest. You can take vacations and you can sleep well knowing you’re building an asset you could sell or pass down, if and when you want to.

Our business model is to license our set of Sellability tools to professional advisors who share our vision and want to build a professional practice around helping people improve the sellability of their business.

We’ll know that we’ve reached our goal when we see one million owners achieve a score of at least 80 on the Sellability Score questionnaire by the year 2050: 1M.80.2050.

So that’s where we’re headed — want to come along? You can get your Sellability Score through one of our professional advisors at SellabilityScore.com – and you’ll be able to see right away where you need to make changes in order to become a valuable, sellable business. We’ll help you hit the 80 mark and beyond.

Or, if you’re a professional business advisor and you share our vision for wanting to help business owners build successful, sellable companies; you can sign up for a demo of our suite of Sellability coaching tools.

Photo courtesy of: Contribute Magazine Inc.

  • Rick Schwartz says:

    Well said. I preach about the basics every day. Without basics there can be no focus on value drivers. Thanks for your insightful thoughts.

Add Comment

Follow John Warrillow

RSS Facebook Twitter
Pre-Order Built to Sell

Get your free chapter of Built to Sell: Creating a Business That Can Thrive Without You by signing up below: