Entrepreneurship is a journey. Sounds obvious, right? I think most would agree if you asked them, however, the majority of entrepreneurs don’t act like it is. They are permanently stuck in the first half doing the fun stuff, but the game is really won and lost in the second half.
Bo Burlingham gives a great analogy in my podcast interview comparing entrepreneurship to a construction project. Entrepreneurs tend to focus only on growth (the building phase) and in turn fail to see the whole picture. Every project must be completed. Smaller details need to be managed and fine tuned before the project can truly be labeled “finished”.
No one wants to move into a building that is only full of 2x4s and insulation. Everyone expects there to be toilets, light switches, carpet etc. before they would even consider buying it. The true art is finishing a project and making everything come together.
[clickToTweet tweet=”“The whole is greater than the sum of its parts.”” quote=”“The whole is greater than the sum of its parts.””]
We as business owners need to be aware that entrepreneurship is a journey and that the definition of real success is building a business that has all the finishing touches and that can be transferred to someone else with little effort.
Blindspot #1: The Chase
The chase is always more fun than the catch. Turning a concept into reality and growing it into a business is what gets most entrepreneurs out of bed. Many of us are passionate, creative, and action orientated and the granular details really don’t get us going. So many entrepreneurs are addicted to chasing growth because that is who they are at the core. That is what they enjoy doing. It’s pure competition, real-time feedback, and extremely satisfying watching your visions become a reality.
However, as a company matures, focus should as well. The risk in the business changes and the technical parts of operational efficiencies, succession planning and tax strategies become a necessary evil.
Blindspot #2: The Control Addiction
You started your company so you could listen to others, right? Haha! If you’re like me, or any other entrepreneur I know, that couldn’t be further from the truth. The freedom, control, and independence that comes with being an entrepreneur is sometimes worth more than the financial benefits.
It’s very hard to look into the future and beyond the company when you’re enjoying everything about building a business and the control that comes with executing on your vision. More often than not, if someone were to broach the topic of selling or transitioning the business, they’d say something like “Why? I love my job, I make a bunch of money, and I have control over everything in it!”
Planning is a goofy thing… most people know they need it but very few actually do it. This problem becomes magnified with entrepreneurs because of their sense of control over their destiny. However, to plan for the transition is the same as planning to finish the construction project. You can’t walk away happy and be proud if you don’t finish. The sooner we as entrepreneurs see this challenge, the sooner we can take back the control we sought to begin with. Without a plan you will slowly lose control on how you finish your journey, and the chances of finishing happy and successful become smaller and smaller with time.
The Entrepreneurship Journey
Our old friend Bo Burlingham defines the four stages of the journey in his book ‘Finish Big’:
- Exploration – Investigating the many possibilities, doing the necessary introspective work, and answering what you do and don’t care about in an exit: money, timing, successor, values, etc.
- Strategic – Learning to view your company as a product itself, building organizational capacity and culture necessary to maximize the value, assembling the deal team, and progressing toward a plan.
- Execution – The process an owner goes through to get the transaction complete, whether that is a sale to a 3rd party, management buyout, gift to your children, or any other exit options available.
- Transition – This phase begins after the execution of the plan and the owner is fully engaged in whatever comes next in life – a redefined role, retirement, or a new career in something they are passionate about.
The Execution Myth
The other danger of placing too much emphasis on the execution phase is the conflicting advice from the various different people sitting around the table. Almost EVERY advisor focuses on the execution phase.
Why? Because that is where the money lays. That is how everyone gets paid. The CPA and the Attorney get to bill more hours, the broker or Investment banker get paid on the commission of the sale, the financial advisor gets to sell mutual funds after the liquidation, the insurance rep gets to sell a few more policies, the banker gets the deposits, and the list goes on.
The REAL challenge is doing the RIGHT planning in the first two stages of the entrepreneur’s journey.
In fact, if you really play the game right, you might not need an execution phase at all. If you look at the definition, ‘execution’ is the tactical aspect of the sale transaction, a blip in time, the signing of a contract. The transition into your life after business could look a million different ways… chairman of the board, absentee owner, slowly selling to your kids or key managers, or whatever you might think of. Make sure that you know that and you’re not pushed in a direction that doesn’t meet the goals you setup for yourself in the exploratory and strategic stages.
The more planning you do prior to the execution, the more control you’ll have and you will put yourself back into the driver’s seat of your destination.
Practice the Art
Think about it this way. A concert musician might have spent fifteen years worth of evenings practicing their instrument, and then six months practicing a particular piece in the run up to a particular concert. The performance (i.e. the execution stage) might only last ten minutes, and while that ten-minute performance is a big deal, the real work was done long before that.
Transition Stage
In order to really have control over the entire entrepreneur’s journey and transition into ‘life after business’ – the last act in the second half of the game – you need to have spent the time doing what you can to avoid the panic and uncertainty in the execution stage. It’s about asking yourself the tough question ‘What do I want, and why?’ during all stages of the game.
Sure, you can answer that question as “I want to grow the business by X next year, and I want it to be this big one day”. But make it tough. Challenge yourself to come up with the answer to this question: “I want the business to do this for my life now, and this for my life afterwards”.