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Episode Summary
You spent twenty years building this thing. You finally take an offer. Twelve months later, you wish you hadn’t. Bo Burlingham’s research on owners who had left their companies found more than half regret the sale a year out, and most never saw it coming. I read Finish Big right after we sold our family business in 2014, and that book is the reason this podcast exists. Bo and I get back together to revisit the four characteristics of a good exit, the seven things owners who got there actually did, and why the word “exit” itself drives owners away from the work that would save them. We get into knowing who you are, what you want, and why as the first decision (not the last). The successor you’ll probably get wrong on the first try. The contract that won’t save you because the escrow has the real leverage. And the transition nobody warns you about: when your identity, your social network, and your purpose all disappear with the title. This is the episode where I reconcile five years of my own work with the book that started it.
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## Top 10 Takeaways- More than half of owners regret the sale twelve months later, and most never saw it coming.
- A good exit needs four things, and missing one is enough to leave you full of remorse.
- Knowing who you are, what you want, and why is the first decision, not the last.
- A sellable company means selling to whom you want, when you want, for what you consider fair.
- If you need a successor, you will probably pick the wrong one the first time.
- Your lawyer and CPA have never sold a business themselves, and that’s the advice you actually need.
- The contract won’t save you. The escrow makes sure of that.
- The hardest part is the transition: your identity, social network, and purpose disappear with the title.
- Open book management installs ownership thinking. Making your numbers visible is not the same thing.
- Family-owned and employee-owned are the only structures Bo found that survive past the third generation.
Sound Bites
“People who have a clear idea in their own mind about who they are, what they want and why are able to make decisions that are going to make them happy. Whereas otherwise you wind up making decisions based on other people telling you what they think you should do.” (@TBD) — Bo Burlingham
“If you need a successor, the chances are you’re gonna fail the first time.” (@TBD) — Bo Burlingham
“If you’ve spent your whole adult life building this business, there are a lot of things you’re getting out of it that you don’t realize until you don’t have it anymore.” (@TBD) — Bo Burlingham
“It’s one thing to give people ownership. It’s another thing to teach them to understand ownership, and that is hard. That takes years.” (@TBD) — Bo Burlingham
“I believe that true freedom lies in the ability to have choices. And the only way to be happy with what you choose is for you to fully understand how each one of those choices impacts the things that are important to you.” (@TBD) — Ryan Tansom
About This Episode
Bo Burlingham is the former editor and editor-at-large of Inc. magazine, where he spent more than 20 years watching successful entrepreneurs build their companies. He’s the author of five books, including Finish Big: How Great Entrepreneurs Exit Their Companies on Top and Small Giants: Companies That Choose to Be Great Instead of Big. He is also the co-founder of the Small Giants Community. Finish Big came out of his column with Norm Brodsky at Inc., when Norm started down the path of selling his own business in real time, on the page, in front of millions of readers. This is Bo’s second appearance on the show (the first was Ep. 16), and the conversation reconciles his original research with what Ryan has learned in 200+ owner interviews since.
Resources Mentioned
- Finish Big by Bo Burlingham — The book that started this podcast.
- Small Giants by Bo Burlingham — Companies that choose to be great instead of big.
- Small Giants Community — Co-founded by Bo. — smallgiants.org
- Tugboat Institute — Dave Whorton’s community for evergreen companies built to last 100+ years. — tugboatinstitute.com
- Norm Brodsky — Bo’s longtime Inc. writing partner whose real-time sale inspired Finish Big.
- John Warrillow — Built to Sell / Value Builder — On why renaming away from “exit” language worked.
- Jack Stack & The Great Game of Business — Open book management as the system for teaching ownership.
- Allie Taylor — Referenced for the psychology of why owners avoid thinking about the exit.
- Atomic Object / Carl Erickson — Grand Rapids, MI design firm with employee ownership; member of Small Giants and Tugboat.
- Zingerman’s / Ari Weinzweig — Ann Arbor’s visioning system.
- Conscious Capitalism — Referenced for the case that you can make money and do good at the same time.
- The Infinite Game by Simon Sinek — Referenced for the finite problems of private equity timelines and quarterly reporting.
- The King of Capital — On Blackstone and the rise of private equity.
- Net Promoter Score — Bo’s third pick for most powerful management innovations.
Connections
Phase + Module:
- Module 1 — Ownership Goals — Bo’s first principle (who you are, what you want, why) is the iBD starting line.
- Module 3 — Owner’s Playbook — Where the exit options and the value growth plan get sequenced against the owner’s targets.
Milestones:
- Milestone 1 — Time & Role Goals — What role you actually want once the company doesn’t need you.
- Milestone 2 — Cash Flow Targets & Sources — The income number that defines what “enough” looks like.
- Milestone 3 — Net Worth & Valuation Targets — The valuation number that decides which exit options are even available.
- Milestone 7 — Value Growth Plan — The bridge from where the company is to where the owner needs it to be.
Concepts referenced:
- Independence by Design™ — The methodology that grew out of the gap Finish Big named.
- The Owner-Operator Trap™ — Why identity, purpose, and social network disappear with the title.
- Value Gap — The distance between today’s value and the value needed to fund the life after.
- Three Lenses of Value — How to evaluate the buyer’s motive before they evaluate your books.
Related episodes:
- Ep. 16 — Bo Burlingham - Finish Big — Bo’s first appearance, before iBD existed as a methodology.