I have been on your side of this three times.
Once by choice. Once because an offer arrived that we had not gone looking for. Once because retirement and I do not get along.
I am not writing this to impress you. I am writing it because almost everything I ask you to do, I have already had done to me.
The day I was due to sign
In 1987 I bought my first business. An international freight forwarder, bought out by the people who already ran it.
It was losing almost a million dollars a year. That is the part people forget when they hear the word buyout. You are not buying a prize. You are buying a problem you think you can fix.
My daughter arrived a month early on the day I was due to sign.
It was the first time life put something on my calendar that I had not put there. It would not be the last.
- 1987A management buyout of a business losing almost a million dollars a year.
- 1996Handed over to a trade buyer at four times earnings.
- 25 yearsThe next business, built so the answer to the Friday question was always yes.
- Since 1987On one side of this table or the other, without a break long enough to count.
What I learned building it
Freight is a promise that a thing will be somewhere else by a certain date, repeated thousands of times a week.
It only works if the promise does not depend on one person being at their desk.
A business that runs on relationships held in one person's head is not a business. It is that person, with invoices.
Somebody else wrote it down at the time
“Buyout thrives on total service.” Tony Thomas wrote the business up five years in, which means the numbers below are a published record rather than my memory of it.
“Boulton is an exceptional executive on every count.”Tony Thomas, Business Review Weekly, 16 October 1992
- 81staff in five Australian capital cities
- $35Ma year paid through to airlines and shipping lines
- $250ka year on staff training, more than 10% of the wages bill
- 1stprize for total quality management, Telecom and Victorian Government small business awards
The training line is the one I would point at. None of the rest of it works without it.
I retired. It was awful
You spend a decade building something, you hand it on, the money lands. Then there is a Monday.
Not because of the money. Because the thing that had been asking something of me every day stopped asking.
This is the pillar nobody works on. The business gets a plan, the tax gets a plan and the person at the centre of both is told to enjoy the break. I nearly did it to myself.
I have retired three times now and I have hated it every single time.
Kerry Boulton, The Exit Strategy Group
The business that was ready every day
So I went again. My husband and I spent the next 25 years building a real estate business, the way I wished I had built the first one.
Everything written down. Around 40 percent of the revenue recurring, so the income did not depend on a good month.
Every quarter I asked the same question. If somebody walked in tomorrow, is this a business they could take over on Friday?
Then an offer arrived that we had not gone looking for. We said yes, because the answer to the Friday question had been yes for years.
What I know now is that readiness is not something you switch on when you decide to go. It is either true on an ordinary Tuesday or it is not true at all.
The same conversation, over and over
The first answer is never the real answer.
Somebody tells me they have no intention of going anywhere. Forty minutes later we are talking about their knees or their co-founder.
The advice around an owner is honest and incomplete at the same time. Your accountant holds one pillar of three.
Nobody is holding the other two. Nobody is asking what happens to you.
Readiness without the will to decide is the most respectable way ever invented to never decide. You are always almost there.
Kerry Boulton, The Exit Strategy Group
Why I am not a broker
A broker turns up after the decision has been made. I turn up before it.
Every adviser around you is paid on the year before or the year after, so the ending itself is nobody's deliverable. It stays yours.
I get paid the same whether you stay or go. That is deliberate. Most of the owners I work with never go anywhere. They just stop being trapped.
What I would ask you
If you couldn't walk into the business for three months starting tomorrow and it doesn't matter why, what actually happens?
Most owners have never answered that out loud. You do not have to start with me.
Kerry Boulton is an Accredited Family Business Advisor, Certified Value Builder Advisor and Certified Exit Planning Advisor. She wrote Million Dollar Pay Day and The Uncensored Truth About Exit Strategies.