Avoid Burnout as Your Business Succession Driver

The International Business Brokers Association, M&A Source and Pepperdine University just released their MarketPulse Q4 2013 survey report.  The survey findings most interesting to me are that for business sales under $500,000, burnout was the most commonly cited reason for owners to sell, and for business sales in the $500,000 to $5 million range, burnout was the second most commonly cited reason.  As noted by O.J. Robinson of CenterPoint Business Advisors on his blog posting about this report, burnout not only causes business performance to decline, but also, the main reason for burnout – the owner has all the knowledge and makes all the decisions – detracts from the value of the business when it comes time for business succession to a new owner. That’s because there are no other employees with the training or experience to help the buyer of the business.

Interestingly, the MarketPulse survey also found that the number one reason driving Main Street (under $2 million) buyers is “buying a job.”  Well it’s that approach to the business – that it is just a job, and not an investment – that is probably the biggest factor that will lead to owner burnout.

Michael Gerber in The E-Myth Revisited writes about working in the business (bad) vs. working onthe business (good).  If it’s just a job to you, you can’t get away from working in the business – you have all the knowledge and make all the decisions.  You think you’re an entrepreneur, but you’re really not; you’re a worker bee, not a business owner – that’s the entrepreneurial myth.  A lot of these business owners are what I call “forced entrepreneurs.” Some of them are escaping corporate America.  But a lot of them are buying the job because they just can’t get a job in corporate America.  They have only a job mindset, not an entrepreneur’s way of thinking.  But how many people do you know who pay good money for a job?

No matter the reason that drives them to purchase a business, business owners need to move away from the “job” mindset, realize the business they paid good money for is an investment. They need to put their energies into working on the business, rather than in the business.  How does the business owner do that?  In short, create systems and then use those systems to delegate to others.  Business owners who create systems and delegate to others should make more money from the business while they own it, and make more money from the business when it comes time for business succession to the new owner.

If you are thinking about buying a business, or are a business owner now, make sure you replace the “job” mindset with the “investment” mindset.  Avoid owner burnout!

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John Koenig
John Koenig
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