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I have a confession to make – I rather like being boring.
Boring Businesses
More specifically, I always wanted my business to be boring. To be able to sleep at night. I’m not a risk taker. In my experience, very few business owners are. Surely the ideal route to a successful business would be the maximum return with the minimum risk.
Creating a solid, sustainable business that can transition to an Employee Ownership Trust and continue long beyond the founder – whilst also paying them a fair value – would seem to be the logical outcome of creating a ‘boring’ business.
And yet there are so many voices telling us to do things differently. To take risk; to be ‘entrepreneurs’. What motives are driving that message?
Short Termism
In the shrieking noise of advice and opinion that surrounds us today, there is one voice that I want to remove forever. It is the voice that whittles endlessly on about the objective of business being growth.
It is a voice that uses words such as ‘disrupt’ and ‘agitate’. It uses phrases such as ‘high growth startup’ and ‘step change’. It is peopled by serial entrepreneurs and venture capitalists.
It is full of angel investors who, like the old soak who has just returned to the pub having lost a fiver on the two thirty at Newton Abbott, will tell you about the time they increased their money twenty fold on a sure thing when everyone else told them they were mad. They conveniently forget to mention the twenty other investments they made which ended up in losing their money.
It is the short term – three or five year – view of the world of Private Equity. It is the business advice that solely talks about growth – and not about purpose.
Whose Interest?
There are a great many vested interests behind these voices. The advisers and consultants recommending changes who only get engaged when change is required. The investors who get a return on their money without actually having to do anything. The Government ploughing money into high growth businesses because that’s the sector that makes them look good.
The sneering voice of the corporate financier when referring to ‘lifestyle businesses’ (yes, I had that one, an accountant in the corporate finance department of a top 4 firm who told me “Oh, you’re just a ‘lifestyle business’”).
The focus of business advice is on valuations, increasing share price and exits. And yet this is often not what owners actually want for their businesses.
There are many owners who have sold their business only to see it ripped apart. The focus on growth has resulted in the thing that they created with such pride, to no longer exist.
Another Way
Just imagine we had a dial that enabled us to remove all that noise telling us how we should run our business to maximise growth. What do we hear now? What voices are quietly talking away in the background, sharing good practice and experience?
Those voices we can now hear come from the business owners themselves. Not the minority who have grown their businesses and sold for large sums, but the majority who quietly run profitable businesses with great pride and purpose – a sector which employs millions of people.
They are the business owners who don’t refer to themselves as entrepreneurs. They just want to carry on as they are, improving services, dealing with customers they like, creating an environment for happy employees. They pay into their pension fund on a regular basis, and are excited on the first day back at work on the second of January.
They might talk about how their businesses provide wellbeing, for both themselves and their employees. Doing what they enjoy. Long term sustainable profit. Happy clients. Employees who enjoy coming to work.
The ideal circumstances to sell the business not to private equity or to a huge corporate, but to an Employee Ownership Trust (EOT). Sell for a current market value, to a trust for the benefit of the employees, and leave the business as a legacy.
Boring. But happy.
Having sold the financial planning firm he founded to an EOT, Chris Budd now runs The Eternal Business Consultancy, providing consultancy plus an online programme for owners interested in succession planning. There is a special offer for anyone who signs up in April. He can be contacted at chris@theeternalbusiness.com