I’m working with a client whose company was hurt and is experiencing a slow recovery. After decades of ownership the owner is burned out and knows he needs to sell, but also fears not having his business. For background, it is not a dynamic industry, the management team is weak, and their pace is the opposite of “having urgency.”
We’re talking with an industry buyer with the right people, the right technology, and the money to take my client’s firm and modernize it. FYI, estimates are my client would need to invest about $1 million to get the needed technology and people.
That said, every so often my client will say something like, “I’m not sure others can do what we do.” I call this the “Founder’s Syndrome.” As in, my business is so special it will be tough for anybody else to run it. In this case he’s ignoring the fact the suitor overlaps about 2/3 of what his firm does, has about four times the sales, is growing fast, and is very profitable.
Founder’s syndrome usually equals an owner dependency. As in, the owner is the only one who can:
- Work with key customers.
- Finalize and approve all bids.
- Design products (last year we ran into a company whose 82-year-old owner was the lead designer of very complicated and technical products).
On the flip side, a great owner will listen to his or her CFO, management team, and outside advisors. They’ll delegate and let people grow. They realize their value goes up when they are somewhat expendable, because they work on not in the business.
“Every sin is the result of collaboration.” (Author) Stephen Crane
“The problem with putting two and two together is that sometimes you get four, and sometimes you get 22.” (Author) Dashiell Hammett