What I’ve Learned From Owning a Company
I, like many other ambitious entrepreneurs, ventured forth to seek fortune and glory in the game of capitalism. Although, the entire journey of owning a company changes you, and not all changes are good. Regardless, everyone’s experiences from owning a company will be unique. You certainly grow as a person from the whole endeavor no matter what happens to the business.
I first thought about owning my own company towards the end of my teenage years. The idea of creating something never before seen in the world appeals to me at my core. However at the time, my skills were limited and had to be nurtured. Thankfully, my opportunity to do so happened in the mid 1990s.
Later in the early 2000s, the opportunity to start a company presented itself, and my business partner and I set off on an adventure to fulfill the dream of fortune and glory. Then, yada yada yada and we sold the company. It’s such a cliché to say, but we achieved the American Dream through bootstrapping the business and grit.
Yada Yada Yada
In a certain Seinfeld episode, one of George’s many girlfriends liked to say “yada yada yada” to shorten her stories. However, there are a lot of events and emotional ups and downs within my yada yada yada years that are stories for another time.
Regardless, each experience brings new enlightenment, as both good and bad results are opportunities to reflect on what works and what doesn’t work. Everything is a learning experience that helps move the company forward.
Also within this time, I learned that using data, facts, and reasoning yielded better results than gut feelings and emotions. Surround yourself with a great team, and build a trusted network of people. A good network is great for discussing ideas, getting feedback, and learning from others.
Selling the Company
The entire process to sell the company took 9 months and many hours working through contracts, phone calls, and financial reports for the buyer. Thankfully, the legal skillsets I learned during the yada yada yada years really helped. It was invaluable when reading contracts and working with lawyers throughout the process. In the end, my legal team was nice enough to bundle all the contracts together into a beautifully bound book to read at my leisure. In truth, I hope I never have to reference it again.
Now, it is six months after the acquisition. My business partner and I are no longer in control of all decisions. Now, there are other people that run the company. However, I do have key responsibilities in my new role. Although, instead of turning the crank to move the gears, I’m another cog in this finely tuned machine.
As an owner who is now an employee, I find myself searching for happiness in my new role. Either I’ll find it, or move on to the next adventure. Regardless, there is always new opportunities to learn new skills and explore new ideas. This is a big part of my personal mantra in life. As long as I’m learning and growing, I’m happy.
The Good of Owning a Company
Two words sum this up nicely. Mad skills. Many of these skills will be in areas that you would never have tried on your own. I have a technical background. I love technology and to build software products and services. However, there are many other skills one learns such as business management, addressing human resource issues, reading and modifying contracts, work with lawyers, manage meetings, delegating tasks, speaking and presenting, organizing teams, and much more. I use these skills almost everyday. As a result, I’ve become quite competent in these skillsets.
Additionally, other skills such as critical thinking, taking calculated risks, working through failure, trying new things, and organization are strengthened through trial and error. Furthermore, these skills are not only useful professionally, but improve personal life too.
Last but not least, it’s very rewarding being your own boss while making money and growing your personal wealth. Ultimately you have freedom, which makes your time flexible when necessary.
The Bad of Owning a Company
Unfortunately, there is a dark side to owning a business. It becomes part of your everyday life. You check your email many times a day, all day, every day, even weekends and holidays. It’s not uncommon to work 60 or more hours a week. However, you can take time off since you make your own hours. Unfortunately, you always wonder if everything is okay at the office while you’re away. There are talented people at the company capable of solving real problems. Regardless, you always want to be aware of any situation that could hurt the business. One inescapable truth is the company is in your thoughts everyday.
In time, the fun stuff that you love doing becomes other people’s responsibilities. Then, you find yourself managing the business, putting out fires, and dealing with tasks that frankly only can be done by you as a business owner. It’s possible to retain some of the fun tasks. However as the company grows, it’s necessary to share these responsibilities. Otherwise, some key milestones and objectives will either be late or never completed on time. Balancing what must be done and what’s fun becomes increasingly difficult.
Even a successful company still requires a lot of time, energy, and attention. As a business owner, your finances and emotional well-being are attached to the company’s success. Even when the money is flowing, you still worry that at any time fortune can reverse.
If the Company is Doing Well, Why Sell?
There is the constant struggle to balance the company’s growth, keeping the lights on, and to secure everyone’s job and morale while searching for the next opportunity. With all this time dedicated to the business, personal life suffers. However, it’s important for owners to balance time with family life to disconnect from work and maintain good relationships. This is much harder than it seems.
My personal decision to sell the company came down to the fact that I felt I’ve grown the company as far as I could without a major personal investment. The company was profitable and had no debt. It was healthy and making money. After almost two decades of steady growth, I wanted to see the company go to the next level. Therefore, we searched for the right buyer that shared our vision of the technology, that understands the industry, and aims to grow the business even further.
It wasn’t luck that they acquired the company. A buyer of this caliber doesn’t acquire businesses unless they see potential. I know there is potential to go further, because the company’s accomplishments and team speak volumes of its past and current successes.
So, how do you know when it’s the right time to sell? The answer is simple, but frustrating to the person who asks that question. The answer is you just know when it’s time.
Lessons Learned and Pro Tips
I hope to leave some wisdom from my experiences so others can benefit. I’ve certainly learned a trick or two. Through trial and error, I continue to refine skills and find new ways to improve my workflow. However, there are some lessons that have become just as valuable in business as they are in everyday life.
Learn to Not Take Things Personal
When pouring so much time and effort into something, it’s easy to become emotionally invested to the point where any criticism hurts. However, it’s important to detach the heart from what people say and take it as feedback. Listen closely as there may be useful information. Feedback is an opinion and should be treated as such.
Starting a company or a brand new hobby means doing something new and unique. Other people tend to speak negatively about something that they don’t understand. However, even the harshest criticism can have a few words of wisdom. Everything else, can be ignored.
Write Things Down
It always amazes me how people try to rely on their memory. Our memories are finite. Take lots of notes and review them frequently. When bombarded with information from many different sources, writing things down takes the thought out of your head and puts it in a specific place to reference later. The mind will have one less thing to juggle around, and then can think critically when the next unforeseen situation arrives.
Secondly, reviewing notes regularly allows you to throughly think about ideas. Furthermore, additional ideas and thoughts can be explored and documented for later reference. There always seem to be an urgency to make decisions immediately. However, take the time to think things through, talk to people, and do some homework before making any important decisions.
Take Care of Yourself
Your health is paramount to your success. When you’re in excellent shape both mind and body, you can tackle problems and keep up with the demands of life and the company. Exercise regularly, eat properly, get plenty of sleep, and avoid overworking. Working 60 to 80 hours a week may be necessary sometimes, but it will hurt you in the long run even if you enjoy the work. Eventually, your body will revolt against you. Unplanned rest always comes at the worst time.
Secondly, don’t forget that there is a world happening outside of the company. Take time away from the company to do other activities and remember to relax and appreciate the little things in life. This is also a time to reconnect with yourself and never forget who you are and what’s important to you.
Manage Goals and Define Tasks
There are many different goals to achieve. However, broad goals will fail. Learn to split each goal into smaller tasks. This provides stepping stones toward achieving the overall goal, and allows parallel efforts through delegation between your time or other people.
Once tasks and goals are defined, staying focused is critical. Although, focus does not mean applying tunnel vision or being hyper-focused towards the goal. It’s important to be flexible during the journey, and be ready to react to changes along the way.
Know When to Stop
You will put a lot of time and attention into ideas and projects. However, sometimes the solution is to stop instead of working harder when something isn’t working out. Unfortunately, most people choose to work harder and fall victim to the sunk cost fallacy.
A sunk cost is a cost that has already been incurred and cannot be recovered. This cost can be money, time, or resources. People have an aversion to loss or being wrong, and sometimes make irresponsible choices in order to avoid those loses.
For example, a person hires a consultant for $2000 to investigate the pros and cons of their business model. The person also spend many hours doing their own research. The consultant concludes that the market is in decline and the business will likely fail. However, if the person doesn’t move forward, that $2000 and time spent researching would be wasted. So, they decide to move forward anyway.
Learn to know when to stop. Review the data, consider other people’s opinions, and keep a close eye on the progress of the goal. If all signs point to failure, then learn to let go and move on to something that’s more worthy of your time, money, and resources.
Each company is unique. Therefore, the skills gained will be unique to you. However, owning a company isn’t for everyone and that’s okay. It requires sacrifice above and beyond the call of typical ambition and hardworking ethics.
There is no way to prepare for the adventure of owning a company. However, understanding the dynamics and potential personal toll will somewhat help you prepare mentally for the challenge. No matter what happens, remember to breathe and that the company doesn’t control you. You control the company (until you sell it).
This blog was narrated on February 27, 2021 (part 1) and February 28, 2021 (part 2) on the Optimal Startup Daily Podcast. Subscribe to Optimal Living Daily where they hand-pick and read the best content on personal development, minimalism, finance, health, business, and more.