Book Review: Finish Big
Finish Big, How Great Entrepreneurs Exit Their Companies on Top
294 pgs. Hardcover: $27.95, E-version $11.99 Penguin Group 2014
“A good exit takes time – measured in years, not months.”
Hundreds of books have been published for the aspiring entrepreneur who wants to start a business. At the same time, very few books pay attention to where the start-up company wants to eventually be, or how to craft an exit strategy that is literal, graceful and planned out well in advance.
Beginning with the end in mind is the emphasis of author and small business expert Bo Burlingham in his latest book, “Finish Big.” Several years ago, Burlingham wrote the indispensable business bible, “Small Giants,” that chronicled successful companies that chose to make their business great instead of big.
In “Finish Big,” Burlingham points out that very few business owners hand off their companies successfully. These owners have not positioned their companies well financially, failed to offer any future value or growth to potential buyers, rely heavily on one major customer, or operate with a top-down management style that fails to delegate important tasks to employees.
Burlingham blends his past management experience with dozens of interviews with business owners that have gone through the succession process. He asked each what made leaving their company either a positive or negative experience.
The exiting owners who felt positive had the satisfaction of believing their employees would be treated fairly by their successors and their established company culture would be preserved. Owners who were satisfied handing off the reins also felt they were well compensated for their investment and left with a genuine sense of personal accomplishment. The owners who had negative experiences more often than not were forced to sell and had given little prior thought to getting out or planning any kind of exit.
For some owners, leaving the business means carrying them out on a stretcher. For others, the day-to-day excitement of managing a thriving enterprise makes it difficult to ever think of leaving. In other words, they want to work in their business as long as they possibly can.
This was true for Paul Saginaw and Ari Weinzweig, co-founders of Zingerman’s Delicatessen in Ann Arbor. Both owners thoroughly enjoyed running the deli and the companies that grew out of it (bakery, restaurant, creamery, coffee roastery and hospitality training). Saginaw and Weinzweig wanted to protect the company against anything that could possibly happen to either one of them, both in the short and long term. After Saginaw suffered a heart attack in 2009, the partners and employees went through the process of developing a company governance policy, detailing the way the business would be owned, managed and valued without a key partner.
In “Finish Big,” Burlingham breaks the succession process into four stages: exploration, strategy, execution and transition. The book also introduces a system devised by Burlingham’s cohort – and exit strategy expert John Warrillow – called the Sensibility Scale, which helps business owners look at their companies objectively, by stepping outside and looking at it from the perspective of an employee, customer, investor or purchaser.
“Finish Big” also recommends working with experts who have been through the process along with the assistance of an experienced accountant and business broker. But selling a company is only part of a succession plan. Burlingham drives home the point that when starting a business, the emphasis should be placed on how long the founder wants to own the business and how the founder’s life cycle fits into the company’s long-term plans. In other words, too many people begin a business without a strong vision of what the end game is.
At first glance, “Finish Big” appears to be a book relevant just to those handing off their business. Burlingham breathes life into a topic that for years has been relegated to the back burner of important business issues. Although medium- to large-sized companies are featured, “Finish Big” is strongly recommended for those just beginning the business planning process.
Chris Wendel is with Northern Initiatives in Traverse City. Based in Marquette, Mich., Northern Initiatives provides entrepreneurs with access to capital and technical assistance throughout northern Michigan. northerninitiatives.com