- Subject
- You are always almost there
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- The most respectable way ever invented to never decide anything.
- From
- Kerry at The Exit Strategy Group
Calling the question
Readiness is not the hard part. Plenty of owners get genuinely ready and then sit there for six years.
What moves people is a date, written down, said out loud to somebody who will hold them to it.
In 1987 I bought an international freight forwarder in a management buyout.
The signing date had been set for weeks. Bank, lawyers, the outgoing owners, everybody's diaries bent around one Tuesday.
My daughter arrived a month early. On the Tuesday.
It got done. A bit late and considerably less dignified than planned. But it got done, because the date existed outside my head and half a dozen other people were standing on it.
I have thought about that day a lot over the years. Not for the obvious reason.
Here is what I take from it. Every good thing in my working life has come off the back of a date that other people knew about.
Every expensive thing has come off the back of an intention that only ever lived in my head.
Intentions are lovely. They cost nothing, they make you feel organised and they will sit quietly in the back of your mind for a decade without ever once inconveniencing you.
That is precisely the problem with them.
This is the sound of it
I have been doing this long enough to hear the same three sentences from very different businesses:
Every one of those is a person who has done the thinking. Not one of them has made a decision.
And the thinking is what makes it so hard to see. You have read the book. You have had the conversation with your accountant. You have tidied the business up considerably over the last three years. You are, by any reasonable measure, further along than most of the people you know.
So it does not feel like avoidance. It feels like progress.
Calling the question
Readiness without the will to decide is the most respectable way ever invented to never decide. You are always almost there.
Readiness has no natural end point. There is always another system to document, another year of numbers to clean up, another key person to bed in. You can work on readiness forever and never be wrong to.
A date has an end point. That is the entire difference between the two.
The five moves
Name the actual question
Not "should I do something about this one day". The real one is narrower. What do I want this business to have done for me. And by when. Write the question before you go anywhere near the answer.
Put a date on it
A date, not a season. Not "in a couple of years". March 2029 is a date. "When things settle down" is a feeling. And things do not settle down.
Say it out loud to somebody who will hold you to it
This is the move nobody wants to make and it is the only one that does any work. Your spouse counts. Your co-owner counts. Somebody who will ask you about it in six months without being prompted.
Answer it as a verdict
Yes, no, or not yet with a reason attached and a review date in the diary. A "not yet" with nothing after it is not an answer. It is silence wearing a jacket.
Re-decide every ninety days
Same question, out loud, four times a year. Keep going, or start stepping back. Most quarters the answer is keep going. That is a decision rather than a default.
Only the things you have said create any obligation on you. The things you have thought create none.
Three answers and only three
When I sit with an owner at the end of a session, there are exactly three things they are allowed to say. I mean that fairly literally.
Yes
Straightforward. The date goes in and the work gets sequenced backwards from it.
No
Also fine. More useful than people expect. A clean no closes the loop and frees you to run the business as a business.
Not yet, because
Only counts with a reason attached and a named review date. Without both, it is not a verdict.
Most owners have never had anybody ask them the third one properly. They have had plenty of people accept a vague "not yet" and move the conversation along, because the conversation is easier that way for everybody in the room.
I stopped doing that a few years ago. Every "not yet" now leaves with a reason and a date. The difference in what happens next is not subtle.
The reason matters because it is testable. "Not yet, because the management team is twelve months off" is a thing you can check in twelve months. "Not yet" on its own is a thing you can check forever.
A dashed line crosses the curve: the exit event. Death, disability, divorce, disagreement, distress, or an unsolicited offer too good to refuse. It arrives on its own schedule and wherever it falls is what you get.
Two brothers and a football
A family business, third generation. Two brothers running it, their father still working and still holding a minority stake.
They are good operators. The model is genuinely profitable, in a market that has turned against them for reasons entirely outside their control.
They are also among the best-informed people I have spoken to. They had modelled the scenarios. They had sat down with their accountant about the tax position. They had a clear-eyed view of where their market was heading and who might eventually be circling.
And then one of them said this, which I have quoted to people ever since:
Read that again, because it is not a story about confused people.
What they were missing was not information. They had more information than most of my clients hold at the point they engage me.
What they did not have was a question with a date on it. And nobody in that room whose job it was to ask it. Their accountant was not going to ask. Their lawyer was not going to ask. Their father, who has the most at stake and the shortest runway, was the least likely person in the family to raise it over Sunday lunch.
And the father's shareholding was quietly a clock that nobody had ever named out loud. That is the bit that stayed with me. There was a date in that business already. It just belonged to somebody's health rather than to a diary.
The move I would put to them is small and it is not the one they expect. It is not "decide the ending". It is this. By a named date, each of the three of you writes down separately what you need this business to have done for you and by when. Then you put the three pieces of paper on the same table.
You cannot negotiate three answers that have never been spoken.
Fair questions
"How can I put a date on it when I don't know what it's worth?"
You have it the wrong way round. Almost everybody does.
The date is not the answer to the valuation question. The date is the thing that makes the valuation question urgent. Owners who set a date find out what the business is worth within about a month. Owners who wait until they know have been waiting for four years.
"I'd be committing to something I might not want."
You are committing to answer the question on that date. You are not committing to a particular answer.
Staying is a legitimate answer. A good number of my clients land there. The difference is that they have chosen it, out loud, with a reason, rather than arriving at it by never getting round to anything else.
"It's years away."
That might well be right. Readiness takes two to three years to build, though, so "not yet" on starting is really "later" on finishing.
Tell me what specifically will be different next year and I will tell you honestly whether waiting costs you anything. Sometimes the answer is that it does not.
One sentence with a date in it
This takes about four minutes and it is the hardest four minutes in this whole newsletter.
- Write one sentence. It has to contain a month and a year.
- Read it back and check that it is a date rather than a season or a feeling.
- Send it to one person who will remember it. Not your accountant. Somebody who will ask you about it unprompted in six months.
- Put a 90-day review in the diary before you close the calendar.
If you cannot bring yourself to send it to anybody, that is useful information too. It means the will is your lowest score, not the business.
Where this sits
Call the question is the fifth of six steps. It is the one that most owners skip straight past on their way to step six.
Step four designs the ending you actually want. Step five is the only one that turns it into an obligation. Step six is what keeps it honest, because Readiness is not a stable state. It erodes the moment attention moves elsewhere.
Skip five and you have a very well-documented intention.
Let somebody else ask you
If you have read this far and you know perfectly well that nobody around you is going to ask you the question, that is what I am for.
Thirty minutes. I will give you my honest read on where you stand. If I think I can help, I will tell you exactly what that looks like. If I do not, I will tell you that too. And you will still leave with a date.
Fill in the application. We read every answer and prepare a session built around your business.
Make yourself optional.
Kerry
More at readyforexit.com.au. If you have a co-owner, a sibling or a business partner who has been kicking the same football around the same table, forward this to them and let it start the conversation for you.