Skip to main content

Finish Strong - Book Review

June 17, 2022

Join us for this week’s TrendsTalk as ITR CEO and Chief Economist Brian Beaulieu sits down with Managing Partner and Founder of Cornerstone Business Services Scott Bushkie to discuss his new book “Finish Strong: Sell Your Business on Your Terms.”

 

 

Follow Us

SoundCloud   •  Spotify  •   iTunes   •   YouTube

← Back to list of episodes.

 

The below transcript is a literal translation of the podcast audio that has been machine generated by Rev.

Brian Beaulieu:
Hello, I'm Brian Beaulieu, CEO, Chief Economist of ITR Economics. And we have a very special TrendsTalk today. Joining me is friend, business partner, and a fellow author, Scott Bushkie from Cornerstone. Scott wrote a really good, useful, quick, easy book, and it's hard to get all those attributes, Scott, into one book. And there was a workbook that went along with it. The book is called Finish Strong and it's really, for me, it was a how to, from beginning to end, not getting into the minutiae, but how to just think about this transition from being the entrepreneur or the business owner to getting on with the rest of your life when that phase is over with and doing so successfully. And the subtitle to your book is, On Your Terms. And I think that was a critically important part of it also.

Brian Beaulieu:
So, Scott, what was the genesis for the book? Why did you want to write this book?

Scott Bushkie:
Yes. Thank you. And thanks, Brian. I've been in this industry for almost 25 years now of helping business owners sell their companies in the M&A world. And I just see the stats and see in our own clients that they just don't plan soon enough. And so many of them wake up one day and they have a successful company, but they just wake up one day and go, "It's not fun anymore. Time to sell the business." Don't know how, when or why they're going to get out. And this is typically their largest financial transaction in their life. And if it goes well, they can live one lifestyle. And if it doesn't sell, like so many business don't sell, they live a much different lifestyle after typically decades of blood, sweat, and tears.

Scott Bushkie:
So I wanted to try to create all the things I've seen and all the experiences I've shared and learned into a simple, easy to read book that not only took it from a holistic picture of not just how do I maximize value, which there's a lot of books out there like that, but really how to think about when is the right time to get out, how should I get out, what are my different options? How do I emotionally separate myself from the company? And what's important to me and so many other things.

Scott Bushkie:
And not just to have a book, but also to have this workbook, because I'm an entrepreneur. I've read so many books and you read someone and you put it down and go, "Yeah, I'll get to that idea tomorrow." And then tomorrow never comes. So I wanted to try to have it where you read a chapter and then you go and do a little homework assignment and you go back and forth. So you actually have that business owner take actionable steps, whether they're 10 months or 10 years away from exiting their company, just starting to think about some of these things. Because again, most people just don't plan soon enough and that's why so many businesses don't successfully sell. And it's just a shame to see, so we're trying to change that narrative on a closing ratio across the country.

Brian Beaulieu:
I think you did a great job in the book explaining that you can have a successful business, a successfully running business, but that doesn't mean it's ready for sale. Those are really different animals. And prepping something for sale isn't something you're going to do in three months because you're tired or something catastrophic has happened in your life. So all of us business folks, we really need to have that in the back of our mind when we're making decisions about our businesses and you provided some very clear metrics on this is what buyers are going to be looking for. These are the ratios they're going to be running. And I thought those were very helpful.

Scott Bushkie:
Yeah, exactly. Because so many people, like you said, just wake up one day and it's not fun anymore, that the more they can plan and the more they can understand just even what their options are. I was just meeting with someone this morning over breakfast and he's 50 years old, he's taken the company from 20 million when he took it over from his family to 40 million. But all that weight is on him and he knows he could grow the business, but does he want to take on more debt? So he's like, "I just don't know what to do." I'm like, "Well, you could sell 70, 80% of the company, take all the chips off the table, get rid of your personal guarantees, have some people help fill in the holes on management, bring a board around you, and then keep 20, 30% of the new co and now grow the business doing what you love to do, without all the stress and having your money basically already on the sidelines."

Scott Bushkie:
And he's like, "I never knew that even existed. Yeah. That's exactly what I'm looking for." And it's just that sort of thing that now more than ever, when I started 25 years ago it was pretty much you sold a company, it was 100% sale and it was either maybe a seller note or an earn out tied to it. Well now with private equity becoming so prevalent, there's so much different ways of rolling over equity and different ways to save on taxes and that you couldn't imagine all the different ways to get out. So that's why I wanted just at a very high level to help people understand what are just the top nine or 10 different ways you could exit and what are the pros and cons of each. And again, no right or wrong, but what best fits your particular scenario so they could start to understand what some of those options might be.

Brian Beaulieu:
And you asked some tough questions in there, that you've asked the entrepreneur, is there really a successor CEO in your organization? And in the workbook it was, "All right, define what you do and is there really somebody who can do what you did?" And it was all wrapped up in how you have to have a good strong management team to really make this go smoothly, profitably. And when I was going through those questions, they were tough ones because you don't ordinarily stop and think along those specific lines. It was very useful.

Scott Bushkie:
Yeah, no, and they're exactly right, because they saying we have is just because you have cash flow or income, that doesn't necessarily transfer into value. Because again, if I'm the business and I'm 100%, I get all the the new customers and I do all the deals and I do everything and I've got some worker bees around me that help pick up the pieces. But if I pull myself out of the company, the thing shuts down in a month, then you could be making $2 million a year, great income, but you don't have something that's typically transferable or valuable to someone else, unless you plan as the owner to stick around for a long time. Well, you then might just keep the company.

Scott Bushkie:
So it's helping them understand that income doesn't transfer into value, but what are those value drivers that buyers really care about? We've seen some sellers work on items that they think are going to be really cool to the buyers out there and the buyers are like, "We don't care at all about that. We wish you would've spent all your time over here." He's like, "Oh my gosh, if I only would've known, I could've saved myself so much time and energy and really grown the business."

Scott Bushkie:
So that's what we try to do there is definitely hit what the value drivers are and what buyers care most about. And you said, one of them is building up that management team. And most people think, "I'm an entrepreneur." You wear it on our sleeve. Like, "Hey, we can do all these different things. We're Superman." But at the end of the day, if you haven't taken a vacation for five years, and you're Superman working 60, 70, 80 hours a week, a buyer doesn't want to hear that. They want to hear that, "Yeah. I was gone for a month and the business had its record month and it did just fine." And again, people just don't think like that, or customer concentration is another big killer.

Brian Beaulieu:
Oh yeah, yeah.

Scott Bushkie:
Yeah. I've grown my business and it's going like this. But my top customer used to be 10%, now they're 60% of my company. Well, again, the higher the risk, the lower the value, so that customer concentration, you need to keep it around 20, 25% for that top customer, otherwise the values change or the structure changes and things along that line.

Scott Bushkie:
So just different tips that we try to give business owners to understand what's really important as they start to get to that fourth quarter and start thinking about what that exit's going to be and when it is. And like you said about with family. Yeah, we were lucky enough to meet a woman who all she has done is study the traits of, from a psychological standpoint, of entrepreneurs and all over the country and just wrote a book about it and just brilliant. And we were able to take some of her surveys and quizzes and say, "Here, fill this out. See if your son or daughter truly has this." We do in a movie. And one of the quotes in the movie is, "Just because you fell into the lottery of your Mom or Dad being a business owner doesn't mean that you automatically got that entrepreneurial gene. You might have got it. You might not have got it. Or you got it, but you have no passion for what your Mom or Dad's industry is. And it's not going to work out well for anybody."

Brian Beaulieu:
So many things to consider. Our time is up for today, Scott, but I hope we get to do this again. This is a great topic, and I think it's a real value to people who sign into our Trends Talk. So thank you for joining me.

Scott Bushkie:
Sounds good.

Brian Beaulieu:
All of you for listening to this edition of TrendsTalk. I'm Brian Beaulieu.

About

Since 1948, we have provided business leaders with economic information, insight, analysis, and strategy. ITR Economics is the oldest privately held, continuously operating economic research and consulting firm in the US. With a knowledge base that spans six decades, we have an uncommon understanding of long-term economic trends as well as best practices ahead of changing market conditions. Our reputation is built on accurate, independent, and objective analysis.