By Tom Riggs
At the Spring '98 Remodeler's Advantage Summit meeting, I was hit right between the eyes with the concept of making my company a commodity that was worth selling. It never occurred to me to sell my business, and when I read about the topic in the brochure, I thought Linda Case and Victoria Downing had lost their minds!
The speaker was Michael E. Gerber, author of The E Myth. He opened with, "I know that most of you aren't even thinking about selling your company, so how in the heck is this presentation going to pertain to you?" He explained that a company that was attractive to potential buyers meant that it had to have properly devised systems in place and a staff that knew how those systems worked. He said the very best remodeling companies didn't have the owner playing a key role in sales, production or office management. The owner's position was one of vision, development and motivation.
In other words, take off the tool belt, take off your sales and marketing hats and develop a company that didn't need you in the day-to-day operations!
I didn't want to hear that. Surely I was the one in the best position to sell, produce and market my own company. How could my company possibly be successful if I didn't have control of every detail and decision being made? What was the point of writing down everything I knew in the form of job descriptions, checklists, procedures, a mission statement and vision? I knew how to do things right and as long as I had control, everything would work and we would all would be successful.
I wasn't the only one who felt that way, either. Michael had a lot of ground to cover to answer all of questions that many of us had, but he didn't let us off easy. He answered our questions with questions of his own:
- How many hours a week were we working, and how much stress did we feel?
- How much of the job did we bring home, and how was it affecting our relationship with our wives and children?
- When was the last time we took a vacation without calling in every day? Or one that was longer than a week?
- How effective were we in handling difficult clients? Did we personalize their complaints and react emotionally, or could we detach the feelings about our company and empathize with the client?
- If we were injured or disabled, could the company function or would it falter because it was too dependent on us? What would happen to our income and the livelihood of all our employees if we couldn't function for any length of time?
- Were we making money commensurate with our abilities and risks?
- Were we happy?
My answers to his questions stunned me, and my ideas about success shifted dramatically on that day. Michael's presentation turned out to be the single most enlightening moment in my business career. I've followed his advice and have never looked back. Now procedures are written down and in place for every step of dealing with a client from the initial phone call to the final year of warranty work and beyond. Now I run the business. It doesn't run me.
Incidentally, I am selling the business—to my eldest daughter and son. We have completed the succession planning eight years before I retire. And yes, the systems and procedures for the transition are in place.
Tom Riggs is president and owner of Riggs Construction & Design, Kirkwood, Mo., and a member of Remodelers Advantage since 1996.
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