Founding partner of CEO Advisory Guru, LLC. Best-selling author of The Private Equity Playbook and The Exit-Strategy Playbook.
After 21 years as a CEO—during which time I bought 58 companies, built three and achieved profitable exits for multiple private equity sponsors—I decided to shift my focus to helping other entrepreneurs and founders achieve their own dreams. For the past several years, I’ve coached clients looking to scale and exit their businesses; served on boards for large companies; and given seminars and guest lectures to business owners, founders, executives, MBA candidates and more.
I share all this so you know I’m not exaggerating when I say I’ve met and worked with thousands of entrepreneurs and business leaders from all over the world. They come from every industry, every size of business and every situation you can imagine. What they all have in common—with one another and, I suspect, with you—is their drive and deep commitment to growing and scaling their companies.
They are also prone to falling victim to what I refer to as “the arrogance of success.” And, again, I suspect that as a businessperson, you might share this trait. To be clear, this isn’t a bad thing. Building a successful business—reaching that first million in revenue and seeing your business thrive instead of crashing and burning like so many startups do—is an undeniable testament to your expertise and business savvy. You are an expert, and it’s completely reasonable to regard yourself as such. Left unchecked, though, this mindset can also have a downside.
I see it every single day with the entrepreneurs and business leaders I meet, talk to and coach: Their business success makes them believe they can manage everything. That’s a dangerous trap to fall into. No matter how good you are at running your own business, chances are you aren’t an expert in managing the money it makes you, understanding the nuances of business law or even solving the unexpected challenges that will inevitably come as you scale and grow.
You need a team.
So, what’s the best way to avoid falling victim to this all-too-real danger? In my experience, it comes down to one thing: surrounding yourself with the right team. I recommend having at least six key people on your team: an accountant; a personal tax advisor; an investment banker or broker (if you’re selling your business); a lawyer; a wealth management advisor; and a mentor, peer group or coach.
The tax advisor, accountant and wealth manager are key to helping you maximize and manage the money the business makes you. This is especially true when you’re looking to sell the incredible asset you worked so hard to build. Think about it: When you exit, do you know how to keep the maximum amount of money in your own pocket?
My guess is no. You’ve likely been spending all your time growing and scaling your business. When would you have had time to learn the ins and outs of investing, estate planning and tax regulations? That’s why I recommend having a good accountant to maximize your books, as well as a personal tax advisor and wealth manager to help make sure you have a solid strategy in place to keep as much of your income as possible.
Level up your game.
The same is true when it comes to legal counsel. It’s important to have a competent attorney to represent you for business matters, and if you’re selling your business, I recommend working with a legal expert who specializes in exits.
Hiring a separate attorney to represent you throughout the sales process might seem like overkill, but to me it isn’t. In my experience, when you sell your business, the people on the other side of the table are almost always experts at buying companies. They know when someone is inexperienced, and they will exploit those weaknesses to their advantage. Having an expert attorney at your side can help reduce the chance you will be taken advantage of.
Along with working with financial and legal experts, it’s also important as a business leader to prioritize learning and growing. Don’t get lulled into a false sense of security by the success you’ve already achieved. Instead, stay focused on improving your skills and learning from people who have achieved what you aspire to.
There are lots of ways to do that. Peer groups are excellent options. Working with a mentor in your chosen industry is another great way to keep learning. You can also hire a CEO or business coach to identify and guide you through the steps you should take to achieve your specific goals and overcome your unique challenges.
Recognize that you need help.
There’s no question that entrepreneurs and business leaders, on the whole, are incredibly smart and competent people. If you’ve built a successful business, celebrate that fact. But don’t get tricked into thinking that your success qualifies you to be all things to all issues and all problems.
Instead, recognize that your area of expertise is in growing and scaling a business. In everything adjacent to that, get competent help. From my view, if you surround yourself with an expert team, the results you achieve will likely be far greater than if you try to go it alone.
Most of us have heard stories about lottery winners and professional athletes who lose their money. It doesn’t have to be that way, though. I believe a key, for both groups, is to work with experts who can help manage their earnings.
While being a professional athlete or a lottery winner isn’t exactly the same as being a successful entrepreneur or business leader, the lesson is this: Surround yourself with a team who can help you manage your wealth, offer competent legal advice and help you continue to learn and grow.
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