MBA2010 Q&A Wednesday: Is it time to quit my business?

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So Marcus is tired. He's burnt out. He's built his business for 10 years. He's got a thriving e commerce store, but it's plateaued for the last year. Things are just not moving and he's looking to quit, looking to sell his business. Not sure if he wants to now. I want to just stop for a moment and say, this is hard. This is not an easy situation. Why is this not an easy situation? Because entrepreneurs don't like quitting things. They feel like they should keep going, they should persevere, they should keep pushing. But there's a voice inside of market saying, well, maybe I should just cash out now. I've got the business. At some point, should I sell it and just take that profit from the sale and, you know, retire or live off it, start something new, whatever. It's also very hard because as entrepreneurs, many times our business is an integral part of our identity, right? We almost can't imagine our life without it. So that's why there's kind of resistance, especially if you are very involved in the day to day. So in today's episode, I'm going to share a few thought experiments that I learned along the way. Some of these I've learned from other entrepreneurs who sold their businesses, like Dan Andrews, who wrote the the book before the Exit. So if you're in Marcus's situation as well, you can do these thought experiments yourself. The first one is important because we all have limits, right? Willpower is not unlimited. Perseverance is not unlimited. And sometimes we can't think clearly because we're so burnt out, we're so tired, we're so frustrated. We've given so much to the business and you feel like, man, this business is just not doing it for me anymore. It's not working, it's not being as successful as it used to be and you're just not thinking objectively. This is not a good state to be in to make a big decision like selling your business. Okay? So the first thought experiment or the first thing you may want to explore doing is stepping away from the business for a period of time. Now, before you say, omar, this is impossible. I can't step away, I can do this. Well, ask yourself, what if you got in a car accident? What if you had a medical emergency, couldn't work for two, three, four weeks? What would happen to the business? Okay, hopefully you have some systems in place, you have a team, you have somebody to look after while you're gone. Okay? If you don't have somebody, get somebody, okay? Even if it's somebody who's just kind of like your right hand person, an assistant who can just do the things that you normally do, whether it's payroll or pay bills or whatever it is that you feel like you're responsible for doing, even if you can't get somebody. My advice to you is take a look at what's the absolute imperative tasks you must do, like pay your bills or pay salaries or maybe deal with vendors or whatever it is in your situation, see if you can automate it or at the very least, see if you can do all those tasks in three days and you can take off the rest of the month. So you do those things for three days and you take off, you come back and you do them again. The point here is that you need to step away from the business. And I'm talking about fully, okay, where you basically hand the keys to somebody else or say, hey, I'm checking out, you have autoresponders on and basically you're on a sabbatical you know, you're going to live for three, four weeks as if you don't have the business, okay, you haven't sold the business, you haven't given it up, you haven't quit. But essentially you're going to live the life as if you did so that you can get some perspective, so you can start thinking, is this something I'm enjoying? Is this something that I wouldn't regret? Okay, Is this something that is allowing me to see things a little bit clearly now? Now that I stepped away for a few weeks, now I'm thinking, you know what, it's not all that bad. Or maybe I was seeing things wrong, or maybe I really miss my business and maybe the opposite. But one thing's for sure is that you're going to get some clarity by just stepping away. I hit a few rough patches in my time with my different businesses that I've built over the years. And even taking two to three weeks stepping away really makes a big difference. Now, I think you need at least two to three weeks because it takes about three or four or five days to unwind, even just to get used to the fact that you're not checking your email and your slack and all your messages and being on all the time. So stepping away is one experiment you can try. Experiment number two, and this is from Dan Andrews book Before the Exit, and it's called the Mediocre CEO. And this basically means replacing yourself. Now, this doesn't have to be a permanent change. This could be even just an experiment. But the point here is that you are one person, okay? And you can replace one person. Imagine you just replaced yourself with what he calls a. A mediocre CEO, and he says mediocre because, hey, let's not try to pretend that we're going to find our perfect clone. Somebody's going to do everything exactly the way we do at our level, our satisfaction. No, we're going to get somebody who's just basically going to make the business coast just do as well as it's doing right now. Somebody basically is going to be able to take responsibility. Now you might be thinking, I have to pay this person. Maybe I can't afford it. Well, you can work something out. Maybe you can work something on a commission basis. Maybe you can work something where there's some equity. Maybe you can work something out where they do get a salary based on their performance. Or maybe you can give up your salary or a portion of it and give it to the CEO, a combination with some bonuses or some sales, targeted bonuses. The point here is that replacing yourself will make you feel like, okay, the business is still running, someone's still responsible. How would that work out? A couple things might happen. One you might realize, okay, I missed this company. I think I just needed a break. I'm going to come, come back, and I'm going to go full force. Another outcome could be, I don't miss it at all. And actually, this mediocre CEO is doing a fantastic job and the business is doing okay. And actually, we got out of a rut and a fresh pair of eyes helped out. And guess what? You can just continue having the mediocre CEO run your company. And now guess what, you become an investor in your own business, and you didn't sell the whole company. You still have, you know, a good portion of the company if you didn't give up too much equity in this deal. And now you're free to do what you wanted to do when you wanted to sell the company. Another hybrid approach of what I just talked about, Another thought experiment is raising capital, getting investors, and saying, hey, I got my E. Commerce business to this point all by myself. I want some investors so I can take some money off the table as well as replace myself. Hire a team, hire some managers, hire a CEO. I'll be chairman of the board. Yep, you're going to give up equity, but you won't give up the whole company. And at the same time, you're no longer chained to it. Other people are doing the work for you, and now you're going to retire. Or you can enjoy the life you were thinking about living after you sold your company. Now, all these options I'm talking about, you can implement in relative time. Raising capital is going to take you some time, six months or so, especially if you're new to that world and you need to network and learn about all that. But if you're an established business that has traction, it's gonna be a little bit easier than somebody who's brand new. Now, what's gonna take a lot of time, and this is the part of the lesson that's a reality check, is selling your business. Selling your business is not something that happens overnight. It's something that can take as long as 18 to 24 months. I know personally a lot of entrepreneurs who sold their business. The last one I spoke to, it took them 24 months to complete the sale for the company that bought them to come to a price, to agree on something, due diligence needs to be done. The sale didn't really close until it was 24 months after the initial conversation with this particular buyer. They were shopping for buyers or they were trying to find buyers even before that. So the reality is if you want to sell your business, it's going to take you some time. You're not going to get any immediate relief. The other options, you're going to get some immediate relief and it's a good option to do before you go down the line of selling your company. And if you try to rush the sale, you're probably not going to get the best deal because they will sense it. Buyers will sense that you are sort of desperate to sell your company and they'll lowball you knowing that you want to get it off your hands. So I'm just giving you the truth of the matter so that you can just get right with it so you can come to peace with it and say, okay, I can't sell this business right away. Let me look at the other options. Even in the process of going through the sale or finding a buyer, I can, you know, go through these exercises. In my opinion, it just sounds like you're tired. The break idea is a good one, but also thinking about replacing yourself as much as possible. Replacing the tasks you have to do, the responsibilities, the meetings, the pressure, the regular to do's that you're doing every day. You can build a team around people that are doing this. Maybe it's going to eat into your profits a little bit, but at least you'll still retain the business and you'll have people working, doing the things you don't want to do anymore. There's a great book that just got released by Jenny Blake called Free Time. It's all about freeing yourself up and building a business that works for your sanity.

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To wrap up today's Q and A Wednesday's question. I feel for you, Marcus. This is not an easy situation, but you have options. This is what's amazing about this situation. Number one, you're a business owner. You own an asset which is a business that's making money that has achieved a level of success that so many people do not achieve. Okay. It's really hard to get a business that has traction, that has customers, that has product market fit. You have, you know, past so many hurdles. You have a real valuable asset on your hands. So congratulations you should be proud of that. Okay, now that you have this valuable thing, don't give it up for nothing. Don't give up all your hard work for nothing. Explore some of these options, get out of your head a little bit and get some perspective. And I'm here to tell you, businesses do plateau. Why? Because sometimes the things we did to get to certain levels just don't work beyond certain levels. Okay. You might need to change up things. You might need to get maybe a consultant to come and take a look and audit your business and say, hey, do this, do this, do this. My advice to you, and this is something that I've done in my own business, is find somebody who has taken their business or a business to where you want to go that have gone past your plateau and ask, hey, can I get an hour of your time? Can you take a look at my businesses? I'll be an open book. Take a look at what I'm doing, tell me why I'm stuck and what to do about it. LinkedIn's your friend here. Find people that maybe were presidents or operations or VP of such and such in companies you know that are where you want to be and just reach out to them and say, hey, I don't know what your hourly rate is, but I would love to grab an hour or two of your time so I can get over a few hurdles. And you're going to spend a few hundred dollars, but it's going to be way, way worth it and it might give you some perspective to get over these challenges and keep moving forward. Thanks so much, Marcus, for asking today's Q and A. Wednesday's question. If you've got a question you want to ask, go ahead and email me over at omar100nba.net and I'll make sure to answer it right here on the $100 NBA show so that not only you but others can benefit from the discussion as we wrap up. Make sure you're subscribed to the show. Make sure you're following the show so you get our next episodes automatically. Also, leave us a rating and a review. Let us know what you think of the show. We read every single one of them and we'd love to hear what you think. Before I go, I want to leave you with this. I always say that entrepreneurship business is like a high impact sport. It's like American football or rugby, right? And if you follow like American football, they don't play every day. They play once a week because the impact is so hard that they can't play every week. They've only played 18 weeks in the season. It's not like basketball, which is a non contact Sport, which is 82 games in a season. So be aware of the fact that business is intense. It's intense on your emotions, it's intense on your head, on your body, on your well being. So you got to take care of yourself. You got to understand that you just can't take impact after impact, year after year after year. It piles up. So stepping away, taking breaks, taking weekends off, getting perspective is helpful. Even if you feel this urgency. I gotta hustle, I gotta work, I gotta make up for my losses. Understand that this is in your benefit in the long run because this is a marathon, not a sprint. Thanks so much for listening and I'll check you in tomorrow's episode. I'll see you then. Take care. We've all been there. You hold on to a coupon, but forget about it and suddenly it's expired. Expired in 2012. Dang it. Fortunately, by switching to Geico, you could save about 900 on car insurance without ever touching a coupon. It feels good to save big. It feels good to Geico.