Built to Sell:
Creating a Business That Can Thrive Without You
By John Warrillow
Published by Portfolio
Copyright © 2011 by John Warrillow
“She looked up from her work. “Let’s do this in your office.” Sarah followed him back to his office and closed the door. She didn’t waste any time.
“Look, Alex, I like you and the rest of the team here, but I’m going back to my old job at Curve Designs. I’ll wrap up the brochure project for MNY, but when that’s done, I’m out.”
Alex felt rejected. He knew that there was nothing he could say or do. Working the weekend to revise the MNY Bank brochure to accommodate a client who knew nothing about design had finally pushed Sarah over the edge.
The meeting ended with Alex making some weak attempts to thank her for her service. Both knew the damage was done, and neither wanted to be where they were at that moment. Sarah went back to her earphones and computer. Alex sat back in his chair and considered the rest of his team.
Leveling with himself, Alex knew that he had assembled a mediocre staff. Sarah was the best of the lot. He had two other designers who were generalists. They could create decent brochures, functional Web sites, and acceptable print ads. Neither of them excelled at any one discipline. His account directors were equally average. Before joining the Stapleton Agency, Dean Richardson had been an account supervisor at a large local agency. Having been passed over twice for promotion to account director, he had been easy prey for Alex to recruit with an offer of becoming an account director at the Stapleton Agency. Alex knew titles were a currency he could afford to be liberal with.
Rhina Sullivan was the other account director at the Stapleton Agency. She was efficient and detail-oriented. However, as account director, she was also responsible for client strategy, which was over her head.
Despite Dean and Rhina (or perhaps because of them), all of the Stapleton Agency’s clients wanted to deal with the boss. Alex’s name was on the door, so he needed to attend virtually all client meetings. Losing Sarah meant his other designers would need to work overtime. He’d need to rely on Dean and Rhina to handle more clients while he spent time recruiting a new designer. His team, average to begin with, would be stretched to their limits.
When he started his agency, Alex had dreamt of attracting the best talent in the city, paying them well, building a magical work environment, and eventually selling out to a multinational agency holding company. In reality, he had second-rate generalists working at the beck and call of ignorant clients. It wasn’t supposed to be like this.
Alex was tired of the grind and decided it was time to sell his company.
A Worthless Business?
Ted Gordon had been a family friend for decades and had inspired Alex to become an entrepreneur. Ted had built and sold a number of businesses over the years and had inspired Alex had watched him reach new heights of personal and financial freedom.
Ted was a serial entrepreneur. He had made his first million starting, and ultimately selling, an insurance agency. He had moved on to build a consulting company, which he sold to a global firm. He had also sold a commercial real estate business a few years earlier. By the age of fifty-nine, Ted had started, built, and sold four businesses. His net worth was well into eight figures. And not only was Ted a success in business, he was also a success in life. He had been married for twenty-six years and had two adult kids who still talked to him. There were also annual ski trips and long summers at the beach house. It seemed like Ted had figured things out, so Alex decided to give him a call.
“Hi, Ted. It’s Alex.”
“Hey, Alex. How are you?”
“I’m okay. Would you mind if I came up to see you? I’d like to get your advice on something I’ve been contemplating.”
Ted’s office was on the top floor of a building downtown that overlooked the water. When Alex arrived, a receptionist informed him that Ted would be right out. A few minutes later, Ted came out of his office and put an arm around Alex.
“So, I see you’ve met Cindy. Did she offer you a drink?”
“She did, and I’m fine, thanks.”
They walked into Ted’s office, which had a panoramic, unobstructed view of the water. The office was large—probably a thousand square feet adorned with pictures of Ted’s family and a hefty oak desk that Alex imagined had been the epicenter of many deals.
They shunned the desk for a more comfortable spot on two white leather chairs divided by a glass coffee table. Ted rested his feet on the coffee table.
“Why did you want to see me?”
Alex knew that he could confide in Ted, so he got to the point. “I’ve decided I want to sell my business.”
“That’s a big decision, Alex. Let’s back up a minute, what made you decide to sell?”
Alex recounted the story of MNY Bank, Sarah and the rest of his mediocre team, and the company’s lumpy cash flow. He talked about how clients always wanted to deal with Alex himself and his agency’s dependency on MNY Bank. Ted listened carefully, asking questions for clarification.
After about thirty minutes, Ted asked a question that seemed somewhat odd. “How would you describe your business to a stranger at a cocktail party?”
Alex thought about this, slightly aggravated to be answering a question Ted knew the answer to already.
“We’re a marketing agency. We create marketing materials like brochures, print ads, and Web sites.”
“Who’s your competition?”
Alex launched into the list of marketing agencies in town. “There are other small shops like Reynolds & Harper, Fuel, and Curve Designs. Sometimes we lose out to regional offices of large agencies. There are a lot of freelancers who work from home and—”
“So you run a service business highly dependent on a small group of important clients who in turn demand that you personally tend to their account, and you compete with a lot of other players who provide similar services.”
“You could put it that way.”
Ted paused a minute before offering his valuation analysis. “Alex, your business is virtually worthless today.”
Alex couldn’t believe what he was hearing. He’d spent eight years building the Stapleton Agency, and now the man he most respected in life and in business proclaimed it worthless.
“Are you saying I can’t sell my business?”
“No, I’m saying that you can’t sell it ‘today.’ If you want to sell it, we need to work on making some changes in your business. I can help, but it won’t be easy…You’ll need to make some tough decisions and bold changes. Are you prepared to follow my advice?”
“Let’s meet here every Tuesday morning at 9:00. In the meantime, I want you to go away and think about what kind of projects you’re really good at. Come back next week and we’ll talk about what’s involved in selling your business.”
On his way home, Alex opened his mobile phone and checked his e-mail. John Stevens had seen the latest round of revisions and had more changes to make to the brochure.”
*****TABLE OF CONTENTS *****
1. A Company in Chaos
2. A Worthless Business?
3. Putting the Process into Practice
4. Pressure from Within
5. The Test
6. The Candidates
7. Growing Pains
8. The Number
9. Gaining Momentum
10. A Blank Check for Growth
11. Telling Management
12. The Question
13. A Sellable Company
14. The Finish Line
part five of ‘Built to Sell’ will appear here tomorrow