Chapter 1
The Entrepreneur's Ultimate Journey: Navigating the Exit Maze
What happens when you've spent decades building a business that defines your identity, only to face the inevitable moment of letting it go? Every entrepreneur exits their business eventually-it's one of the few absolute certainties in the business world. Yet despite this inevitability, the exit process receives remarkably little attention compared to other aspects of entrepreneurship. Bo Burlingham's "Finish Big" has become a modern business classic, praised by industry titans like Jim Collins and featured in Harvard Business Review as essential reading for entrepreneurs. Drawing from conversations with over a hundred business owners, Burlingham reveals that the difference between a happy exit and a regretful one isn't just about the money-it's about preparation, purpose, and understanding yourself.
Chapter 2
Every Journey Must End: Preparing for the Inevitable
Ray Pagano enjoys the bella vita aboard his sixty-foot custom-made ocean trawler-a gift to himself after selling Videolarm, the security camera housing company he founded. Unlike many former business owners, he has no regrets about his exit. When he visits his former company, employees still welcome him warmly, suggesting he "must have done something right."
In 2004, at age sixty-one with his company doing $10.4 million in sales, Pagano began contemplating his exit. His children wouldn't be taking over, and he wanted a clean break-"I want to sell it and leave. I have other things I want to do in my life." When a competitor made an offer, his adviser Gary Anderson suggested he could get much more by making changes to the business.
Videolarm was then a typical entrepreneur-centric operation-a benevolent dictatorship with Pagano making every important decision and keeping financial information closely guarded. Anderson advised him to extract himself and empower his management team if he wanted to maximize the company's value and his exit options.
By implementing a phantom stock program for all employees, introducing open-book management, strengthening his leadership team, and facilitating strategic planning sessions where he listened rather than directed, Pagano transformed the company. Profits climbed from 8% to an impressive 21% on $19.5 million in sales.
By 2009, despite selling during the worst economic downturn in decades, Pagano received $45 million-four times the original offer. Employees were shocked by their substantial phantom stock payouts, with assembly workers receiving up to $40,000 each. Pagano felt "liberated" and remains proud of both his industry impact and how smoothly the transition went.
If you own a business, start thinking about your exit now, even if you believe you'll never sell. The process offers two major benefits: First, it leads to better business practices as you identify potential weaknesses and address them. Second, it forces you to clarify who you are and what you want from your business journey. Remember that creating a successful business isn't the end-completing the journey successfully is.
Chapter 3
Who Am I If Not My Business? The Identity Crisis of Selling
At 2 a.m., Bruce Leech sat alone questioning his decision to sell CrossCom National, the telecommunications company he'd built. Despite the financial windfall ahead, he felt profound uncertainty-a common experience among entrepreneurs facing their exit.
Hastily planned exits rarely end happily, particularly for owners who haven't considered their post-business life. These owners often make decisions based on others' expectations rather than their own desires, surrendering the very freedom that ownership originally promised.
As your business journey progresses, exit options naturally narrow through decisions made along the way. These choices affect what you have to sell, potential buyers, valuation, and preparation requirements. Keeping desirable options open requires clarity about who you are, what you want from your business, and why-without this self-knowledge, you may not even recognize possibilities when they appear.
While business owners meticulously analyze market trends, customer concerns, and competitive threats, they often neglect the most critical subject of analysis: themselves. This self-knowledge proves essential for making sound exit decisions and preparing for what follows. Without deep self-awareness about what you want, what you care about, and what your true passions are, you'll struggle to develop a clear sense of your ultimate goal.
Some entrepreneurs, like Michael LeMonier, view businesses as investments rather than extensions of identity, creating cleaner exits. After being fired from a corporate position, LeMonier learned not to tie his ego to his work. He approaches each business as "just a chapter in the book" rather than his life's work, always considering both where a business begins and ends. His identity remains rooted in being "a child of God, a husband, a father" rather than in his companies.
Others, like Chip Conley of Joie de Vivre Hospitality, build enterprises focused on exceptional service and employee environments. These owners face bigger challenges exiting gracefully due to concerns about their company's fate and emotional attachment. Though initially seeing his company as his lifelong calling, Conley realized while writing books and giving speeches that these activities energized him more than being CEO. After health crises and witnessing friends' suicides, he became determined to pursue his new calling, eventually selling to Geolo Capital in 2010.
Unlike Conley, many passionate business builders want to continue working indefinitely. Yet they too will exit someday, potentially leaving behind chaos without proper preparation. Paul Saginaw and Ari Weinzweig, cofounders of Zingerman's Community of Businesses in Ann Arbor, demonstrated self-awareness in their business vision but had a blind spot regarding exit planning. Everything changed when Saginaw suffered a heart attack in 2009, forcing him to confront mortality. This wake-up call transformed his persistent concern into urgent action, leading him to establish a governance committee to address ownership transition.
Chapter 4
Deal or No Deal: Building a Business You Can Sell
A good exit isn't just about money-it's about controlling timing and choosing the right buyer. Forced sales happen when owners lose these choices due to unexpected circumstances. Robert Tormey experienced this firsthand when his financial services firm collapsed after Black Monday in 1987. The partners ultimately sold for almost nothing, with Tormey "tapped out putting money in."
Bill Niman's story offers another cautionary tale. After building Niman Ranch into a recognized gourmet meat brand pioneering humane animal treatment, he brought in partners who raised $11 million from investors. Despite growing sales, the company remained unprofitable. By 2006, Niman Ranch lost $4 million on $60 million in sales and was nearly out of cash. The shareholders sold 43% and voting control to Hilco Equity Partners for just $5 million. Within a month, Niman's relationship with the new owners deteriorated, and he left a year later with almost nothing to show for decades of work.
Building a sellable business requires "creative paranoia"-constantly identifying and addressing weaknesses and vulnerabilities. Most businesses aren't truly sellable-studies show only 20% of companies put up for sale actually sell, while 65-75% of owners who want to sell never even enter the market. True sellability means being able to choose when you leave and who takes over.
When selling a business, what you're really selling is future cash flow. Every buyer-whether strategic acquirer, private equity group, or family member-expects greater cash flow after acquisition than without it. Smart buyers focus on two key factors: projected cash flow growth and risk assessment.
John Warrillow's Sellability Score examines eight critical factors: financial performance, growth potential, overdependence (avoiding concentration on any single customer, supplier or employee), cash flow, recurring revenue, unique value proposition, customer satisfaction, and management team strength (functioning without the owner).
Private equity groups (PEGs) will acquire thousands of companies in coming years due to their trillion dollars in uninvested capital. Though they're extremely selective, their disciplines and best practices can strengthen any business. Robert Tormey discovered this firsthand when his PEG-owned manufacturer began adopting practices like maximizing EBITDA, guarding working capital, and building infrastructure for growth.
Martin Babinec learned the hard way about accountability after selling controlling interest in TriNet to publicly traded Select Appointments. When TriNet lost three major customers representing 25% of revenue, they missed their targets for the second funding tranche. This harsh lesson taught Babinec and his team to be extremely careful about meeting their numbers. "What we learned was public market discipline," Babinec reflected. "Over time we learned how to be a private company that runs like a public company."
Chapter 5
It's About Time...and Timing: The Long Road to Exit
A good exit requires years, not months, of preparation. Ashton Harrison's journey with Shades of Light illustrates this principle perfectly. After building her high-end lighting company to $12.5 million in annual sales over nineteen years, she first considered selling in 2005, hiring a broker for $15,000 to value the business.
Harrison, a self-described ADD entrepreneur who thrived in chaos, had built her lighting business from scratch in 1986. By 2002, the company achieved sustained profitability, but by 2005 when she first considered selling, the business began losing money amid morale problems and declining sales. The signs of lost control were everywhere-messy inventory records, late financial statements, employee theft, and even embezzlement.
When strategic consultant Steve Kimball asked Harrison and her husband when they wanted to exit, Dave immediately answered "How about tomorrow?" Harrison, however, recognized the company wasn't in sellable condition. When Kimball asked if she could stay for three to five years to build value, she agreed.
Preparing for an exit takes far longer than most owners anticipate. Even if you're just seeking the best deal possible, expect years of preparation. By early 2010, Harrison was ready to sell, with a list of "fifty things" she wanted to do afterward. The timing seemed right-sales were projected to grow 25% to $10.7 million that year with profit margins exceeding 10%, well above industry average.
Though Kimball advised she might get more money by growing the business longer, Harrison proceeded carefully with the sale process. After interviewing multiple investment bankers over four months, they selected two firms. The process continued for another eight months, bringing in several potential buyers.
The winning offer came unexpectedly from Bryan Johnson and Chris Menasco-senior executives at their main investment banking firm who wanted to acquire a small business with growth potential. The deal included a substantial initial payment, a four-year earnout based on percentage of sales, and royalties on Harrison's designs. The sale closed in July 2011-seven years after she began preparing the company and ten years after first considering an exit.
The earlier you start preparing for an exit, the happier the outcome. At minimum, you need time to design and prove a business model, demonstrate growth potential, and reduce risk for buyers. Even with adequate size, selling can take years. As Robert Tormey notes, "The exit process may be a five- or six-year affair"-including finding buyers (1-2 years), navigating market cycles, and post-sale involvement (2-3 years).
Chapter 6
Apres Moi: The Succession Challenge
In choosing a successor, leave enough time to be wrong. Roxanne Byrde thought she found the perfect buyer in Harry, a franchisee's son she'd known since childhood, but discovered his management style clashed with her company's culture. Despite giving him multiple chances to change, his disrespectful treatment of employees and unethical business practices forced her to terminate their agreement.
Jim O'Neal's story illustrates the devastating consequences of poor succession planning. Despite initially finding consultant Vince's analysis of O&S Trucking's problems helpful, O'Neal made the critical mistake of hastily appointing him CEO without sufficient vetting. With O'Neal distracted by his TCA chairmanship and later mayoral duties, the company spiraled downward-sales dropped from $68 million to $45 million, losses mounted to $2.1 million, and cash flow problems forced them to seek creditor forbearance twice. By 2012, O&S filed for bankruptcy protection with liabilities up to $50 million.
Choosing the wrong successor is a remarkably common mistake, even among public companies where founders like Steve Jobs and Howard Schultz had to return to rescue their businesses. Daniel's story illustrates how a single oversight in succession planning can destroy a thriving company. After ten years leading his executive placement firm, Daniel selected Ralph, a partner from a Big Four accounting firm, as his successor. Within a year, it was clear Ralph's hierarchical management style contradicted Daniel's lean, transparent approach. The critical mistake? Daniel and his board never questioned Ralph about his management philosophy, particularly regarding financial transparency.
After her experience with Harry, Roxanne Byrde narrowed her exit options, realizing she could only sell to someone she knew and trusted completely. This led her back to considering an ESOP, which she had previously dismissed. In June 2011, she sold 100% of her company to an ESOP for $40 million. For succession, Byrde found her future CEO "right under her nose" in George Williams, a 17-year company veteran who had risen from quality manager to vice president. She announced an eight-year transition plan, with Williams becoming president and COO in 2013 and eventually chairman and CEO in 2020.
Some owners successfully navigate succession challenges. Martin Lightsey's handoff to his son-in-law Peter Harris demonstrated that successful transitions depend primarily on transferring human relationships, not just business activities. Harris noted that "if you get the handoff wrong, the organization will reject the new person like antibodies attacking a virus."
Chapter 7
Who You Gonna Call? Finding Guidance for the Journey
When facing the challenges of selling a business, the best guidance comes from those who've already navigated this difficult transition. After selling a business, entrepreneurs face a fundamental shift in the nature of their daily questions. While running companies, they focus on quantifiable objectives and measurable progress. Post-sale, they confront existential questions: Who am I? Why am I here? Where am I going?
The path to exiting a business can be isolating, leading many owners to postpone planning until forced to make hasty decisions. When they finally reach this stage, they risk becoming overly dependent on investment bankers and brokers whose interests differ from theirs. For these specialists, the transaction marks the end; for owners, it's the beginning of whatever comes next.
Learning from owners who've already navigated exits provides invaluable perspective, particularly during the initial exploration of options. Organizations like Chicago-based Evolve, founded by Dave Jackson and Bruce Leech after their own difficult transitions, offer rare formal support mechanisms for this journey.
While peer groups like Evolve provide invaluable support during the exploratory phase of an exit, specialized expertise becomes essential as you approach the transaction. The strategic phase requires advisors who understand how to develop value drivers that maximize both company price and resilience.
Most owners shouldn't attempt to manage their exit alone-doing so typically results in a poor transaction and neglected business operations. Ironically, the best lead advisors are often former business owners who learned the hard way by making costly mistakes selling their own companies.
Basil Peters' first exit experience with Nexus Engineering nearly ended in disaster. Starting in a university lab with classmate Peter van der Gracht, they built a satellite communications company focused on cable television equipment. Their timing proved perfect-after $250,000 in first-year sales, they nearly doubled annually, reaching $25 million by 1989.
Peters identified twelve critical mistakes during his desperate attempt to sell Nexus. Despite selling for about $2 per share (when he believed $5-10 was possible years earlier), the experience proved invaluable. Peters walked away not just with financial independence but with an education that launched his career as an M&A adviser.
Barry Carlson, a former rock musician turned accidental entrepreneur, founded Parasun and eventually needed an exit strategy for his 35 shareholders. With advisers David Raffa and Basil Peters, they developed a clear exit plan targeting a $10 million sale. After contacting about a hundred potential buyers and narrowing to three serious offers, they orchestrated a subtle bidding war. The sale closed at the last possible moment-11:55 p.m. on May 24, 2007-for $14.8 million, nearly 50% above their target price.
Chapter 8
The People Part: Employees, Investors, and Your Legacy
No owner exits a business alone-the decision affects investors, family, customers, suppliers, and especially employees who depend on the business for their livelihood. How employees fare under new ownership often strongly influences an exiting owner's feelings about the deal afterward.
Jack Altschuler's experience selling Maram Corp., his industrial water treatment company, illustrates the emotional cost of keeping employees in the dark during a sale. Following his accountant's and lawyer's advice to maintain secrecy, Altschuler found himself betraying the very culture of trust and loyalty he'd built over years. The painful moment when his office manager discovered an invoice revealing the sale remains vivid twelve years later: "She returned to her desk and about ten minutes later came back with tears in her eyes and told me how betrayed she felt."
Most successful entrepreneurs care deeply about their employees, treating them fairly and providing good working environments-both because it's decent and because it's smart business. Ironically, this very success in creating positive workplace cultures often makes exiting more difficult.
Most owners want to walk away from a sale with both money and peace of mind. The latter comes from knowing you've done right by those who helped you succeed. Tony Hartl of Planet Tan exemplifies this approach. Starting with just $50,000 and three locations, he built a standout company with sixteen locations generating far above industry average revenues. When selling to competitor Palm Beach Tan, Hartl prioritized job security for his key people and preserving the company culture. He brought his core team into the process, promising financial protection if they lost their jobs, and gave substantial bonuses to managers after the sale closed.
Whether to share sale proceeds with employees is a deeply personal decision reflecting your values. While not obligatory, such generosity can create tremendous goodwill, as when Bob Wehr Jr. and his son distributed checks to employees after selling Aaron's Automotive Products.
Employee ownership doesn't necessarily make exit decisions easier for top executives, who often hold the largest individual stakes while bearing fiduciary responsibilities to all shareholders. In 2006, Ed Zimmer was CEO of ECCO Group, a leading manufacturer of warning lights and backup alarms for commercial vehicles. The company's ESOP owned about 57% of the stock, with the remainder held by Zimmer, former CEO Jim Thompson, other executives, and a small outside investor.
Unlike most owners, Zimmer didn't need to worry about telling employees about the sale. ECCO was an open-book company with financially literate employees, and Zimmer had informed them about the potential sale the same day teasers went out to prospective buyers. He'd explained that while the appraised share value was around $100, he believed the market value might be as high as $300 per share. When the deal closed at over $300 per share, there was little drama, with more than 100 ESOP members receiving payouts exceeding $100,000.
Chapter 9
Over the Rainbow: Life After the Exit
The final challenge entrepreneurs face is navigating life after selling their businesses-often a more challenging journey than starting one. The transition from business owner to whatever comes next requires finding new sources of identity, purpose, achievement, and connection that were previously embedded in running the company.
Most entrepreneurs don't fully understand what they get from running a business until they've left it. The loss creates a profound emptiness that's difficult to identify and address. Randy Byrnes exemplifies this struggle. After selling The Byrnes Group in 1996, he spent nearly fifteen years trying to understand his sense of loss. Through interviewing sixteen former business owners, Byrnes discovered he'd lost four crucial elements: his identity (the ability to answer "what do you do?"), his purpose (the mission that had guided his company), his sense of achievement (from building something meaningful), and his network of personal connections with employees.
Though Byrnes deeply valued the culture and connections he'd built at The Byrnes Group, his new venture, Byrnes Associates, is deliberately a one-person business. This pattern is common among former business owners-most have no desire to manage employees again. Even those who previously created high-performance cultures typically avoid building new teams, perhaps because they now recognize how emotionally demanding the process can be.
While individual post-exit experiences vary widely, certain patterns emerge from studying many entrepreneurs' transitions:
1. Everyone needs somewhere to go after an exit-those who know their next destination before leaving fare much better than those who must figure it out afterward.
2. Transitions typically take time-about three years on average, with serial entrepreneurs generally adapting faster than first-timers.
3. Managing money is a whole new business-nothing sours the experience faster than losing that money through poor investment decisions.
4. Once an entrepreneur, always an entrepreneur-whatever drove you to become an entrepreneur likely won't disappear after selling your business. Most former owners struggle with retirement and employment.
5. Too early is a lot better than too late-the transition stage rarely allows for do-overs, making it critical to consider all options before selling.
Norm Brodsky finished big, finding a new career after selling CitiStorage. Rather than feeling tethered to a desk, he now cofounds and finances businesses like hotels in North Dakota and restaurants in New York City while monitoring them remotely. "Selling the business wasn't the end for me. It was the beginning of a new career," he explains, valuing his time differently and enjoying staying on the cutting edge while contributing to society.
Martin Babinec transitioned smoothly from TriNet, having early on realized he was working for all shareholders. After stepping down, he launched Upstate Venture Connect to revitalize upstate New York, became an angel investor, helped establish seed capital funds, and cofounded IntroNet. "I'm having a blast," he says. "I couldn't think of anything I'd rather be doing."
These entrepreneurs represent those who successfully recaptured the intangibles-purpose, identity, achievement, creative control, tribe, and structure-in their post-exit lives. The key ingredient to their happiness appears to be service: helping others succeed in business. While financial freedom matters, finding a higher calling through service provides the deeper fulfillment that makes an exit truly successful.
