In this presentation, Pete Worrell of Bigelow addresses high‑performing entrepreneur owner‑managers, outlining a "life arc" that maps a business’s enterprise value over time. He begins by noting that many entrepreneurs feel like outsiders, yet they are the ones who launch new ideas. The arc starts in the bottom‑left with little reputation or assets, where founders typically bootstrap by borrowing from friends, family, and banks, leveraging debt to build the company. A critical transition is moving from a rugged individual founder to a team‑based organization, often involving hiring a CEO. Worrell highlights the common failure of this step—both owners and CEOs resist ceding or assuming responsibility, leading to frequent CEO turnover. As the business grows and enterprise value exceeds expectations, owners often become risk‑averse, preferring to pay down debt even when the market may demand further investment, creating a dangerous misalignment. Eventually, owners seek liquidity and contemplate their next personal chapter, questioning how long they should stay attached to the business. Worrell emphasizes that entrepreneurs are independent, sometimes contrarian, and that today’s technology levels the playing field. He concludes by directing listeners to Bigelow’s EOM Resource Library for deeper insights drawn from successful client experiences.
Chapters
Hi, I'm Pete Worrell from Bigelow. You know, over the past more than 30 years, we've had lots of learnings and unlearnings with our entrepreneur owner-manager friends and clients. Frequently, entrepreneur-owner-managers have always felt like the weird kid in the room. They weren't the ones who got accepted to the best colleges necessarily. They weren't the ones who did the best in class, but they're the ones who are crazy enough to go outside and try a new idea and create something completely new. If you're a corporate executive, what I'm about to speak about isn't for you. If you are sort of intellectually interested in being an entrepreneur job, this isn't for you. I'm speaking to exclusively high-performing entrepreneur, owner, managers in the hopes that sharing with you some of the breadcrumbs we've learned from previous clients will be really immediately helpful and useful to you. Today we're going to speak about the entrepreneur, owner, manager life arc. And the life arc is set up to have on its vertical axis the concept of enterprise value, the gross value of your business. On the horizontal axis, it is time. The way that most of our conversations with our friends and future clients begin is when they ask us the question, "How am I going to get my business to succeed beyond me?" They've realized that the world is impermanent and they're terminal, and maybe they have something else they want to do now or in their next chapter. And they're thinking through, how am I going to make sure that this business, which is so important to all of its constituencies, its employees, its customers, its vendors, everyone, how am I going to make sure it succeeds on a sustainable basis for the long term? Really, for the really, really long term. And of course, when we get started in our businesses, either if you're a founder or if you succeed into a family business, down in the bottom left, what do we find? We start out with very little image, name, reputation, no assets, everything to lose. And what do we do? We go beg for money from our friends and family and probably go to the bank and borrow money. It's crazy. It's not rational, but we do it. We leverage up our business with bank debt in the hopes that as we build the organization, we can transition from rugged individual, what you're really good at and you probably did a lot of in the beginning of your business, transition to unique team. Boy, that is a tough transition. And most entrepreneur owner-managers actually never make that transition. That's why our world is filled with 2 and 3 and 4 person businesses. But if we do make that transition and we want to focus on our unique ability as owner-managers, What do we frequently do? We want to hire a chief executive officer and give away some of the responsibility for managing the business. One day when I was describing this arc to a group of a couple hundred owner-managers, I asked them what comes next after hiring the new CEO, and they burst out laughing and said, "Fire the new CEO." And unfortunately, that frequently does come next. And when I asked I ask the CEOs who depart, "What happened? Why didn't it work?" They say, "She wouldn't give me responsibility." When I ask the owner-manager, "What happened? Why didn't it work out with the CEO?" She says, "He wouldn't take responsibility." At some point along the arc, frequently enterprise value exceeds our expectations. I mean, it's not why we got into building this organization was to, like, make money or build enterprise value. Rather, it's a result of providing great value to our customers. And when that happens, sometimes risk aversion sets in. Risk aversion is a term in behavioral finance where actually we'll take on more risk to avoid a loss than we will in expectation of gain. It happens to all of us. I've had so many times when I have funny, comical conversations with owner-managers and I'll say, I think your business might be worth $75 million. And they'll say, "Oh no, that's terrible." Why? "Because I could mess it up." And so the next step on the arc is to pay down bank debt. And that's like a pretty dangerous part of this arc because you could be in a place where your industry environment is changing. You're hoping to pay down debt, but at the same time, our businesses may be calling out for us to take on more risk. To take on debt, to build that plant expansion, to hire those new people. When what the business needs and what we wanted to do was aligned, things were great. But if they're not aligned, it can put the business in danger inadvertently. At some point, as owners, we have a wish for some liquidity. Wouldn't it be great to get some chips off the table? And naturally we get to the point where we're thinking about the next chapter for us personally. I remember very vividly a woman who came to me and said, "Pete, I only came into the business to help my dad. Now it's 31 years later. I mean, where is it said that this is supposed to be a life sentence?" And as entrepreneurs, we're critical thinkers, aren't we? In fact, you might say we're quite independent. In some cases, people call us contrarians. And as we think about if the organization has sustainability beyond us, Sometimes we think about what are our next chapters. It's an extraordinary time in the history of the world to be an entrepreneur. I mean, technology has leveled the playing field in the entrepreneurial world compared to the bureaucratic world. We typically take these steps in the arc individually, but we should understand we're not alone. If, like me, you see a little of yourself in some of the stages of this life arc and you'd like to learn more through the scar tissue of our successful clients, go to BigelowLLC.com and click on EOM Resource Library.
