Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
Evolution of an Entrepreneur – a conversation with Darryl Bates-Brownsword
0 Playsin 10 hours
At the time of recording Darryl Bates-Brownsword was the managing partner at Succession Plus UK. He is now Chief Growth Officer at Fabric, a consultancy that specialises in helping founders maximise the value of their business on exit.
In this episode of the Abeceder podcast The Independent Minds, Darryl explains to host Michael Millward how the role of an entrepreneur or business manager changes as their business changes and develops.
Darryl suggests that entrepreneurs need to look at their business in a way that more closely matches the priorities that a potential investor would have.
He discusses the different perspectives that different prospective types of investors have of a business.
Darryl describes the five aspects of looking at a business like a potential investor, and how the role of an entrepreneur changes as the business changes and develops.
Michael and Darryl also discuss the challenges that entrepreneurs face as they try to change their role as their business develops.
More information about Darryl Bates-Brownsword and Michael Millward is available at abeceder.
Audience Offers
The Independent Minds is made on Zencastr, because as the all-in-one podcasting platform, Zencastr really does make creating content so easy.
If you would like to try podcasting using Zencastr visit zencastr.com/pricing and use our offer code ABECEDER.
Travel
With discounted membership of the Ultimate Travel Club, you can travel anywhere else at trade prices on flights, hotels, trains, and many more travel related purchases.
Fit For Work Look after your health and you will be fit for work.
No point in being in a great job if you are in poor health. That is why we recommend The Annual Health Test from York Test; a 39-health marker Annual Health Test conducted by an experienced phlebotomist with hospital standard tests carried out in a UKAS-accredited and CQC-compliant laboratory.
A secure Personal Wellness Hub provides easy-to-understand results and lifestyle guidance
Visit York Test and use this discount code MIND25.
Visit Three for information about business and personal telecom solutions from Three, and the special offers available when you quote my referral code WPFNUQHU.
Being a Guest
We recommend the podcasting guest training programmes available from Work Place Learning Centre.
We use Matchmaker.fmto connect with potential guests If you are a podcaster looking for interesting guests or if you have something interesting to say Matchmaker.fm is where great guests and great hosts are matched and great podcasts are hatched. Use our offer code MILW10 for a discount on membership.
We appreciate every like, download, and subscriber.
Thank you for listening.
Recommended
Transcript
00:00:05
Speaker
Made on Zencastr.
Introduction to 'The Independent Minds' Series
00:00:06
Speaker
Hello and welcome to The Independent Minds, a series of conversations between Abbasida and people who think outside the box about how work works with the aim of creating better workplace experiences for everyone.
00:00:22
Speaker
I'm your host, Michael Millward, Managing Director of Abusida.
Evolution of Entrepreneur and Manager Roles
00:00:26
Speaker
Today, i will be learning about how the role of entrepreneurs and managers changes as their business grows and develops.
Introduction of Darrell Bates Brownsword
00:00:34
Speaker
From Darrell Bates Brownsword, who works at Succession Plus, which means that Darrell is a specialist in succession management. As the jingle at the start of this podcast says, the Independent Minds is made on Zencastr.
Promotion of Zencastr
00:00:49
Speaker
Zencastr is the all-in-one podcasting platform that really does make every stage of the podcast production process so easy. If you would like to try podcasting using Zencastr, visit zencastr.com forward slash pricing and use my offer code, Abysida.
00:01:07
Speaker
All the details are in the description.
Role of Succession Plus in Management Succession
00:01:10
Speaker
Now that I have told you how wonderful Zencastr is for making podcasts, we should make one. One that will be well worth listening to, liking, downloading and subscribing to.
00:01:22
Speaker
As with every episode of The Independent Minds, we won't be telling you what to think, but we are hoping to make you think. Today, my guest, Independent Mind, who I met on Matchmaker.fm, is Darrell Bates Brownsword.
00:01:36
Speaker
Darrell is a director at Succession Plus. He helps businesses create a purpose for their management succession plan. Darrell is based in Oxford in in the United Kingdom, but like Succession Plus, he has one foot in Australia.
00:01:51
Speaker
I have been to Australia, it's a great place. Made all the better when, like me, you can have access trade prices on flights, hotels, trains, and holidays, as well as many other travel purchases by being a member of the Ultimate Travel Club.
00:02:06
Speaker
You can access those discounted prices by being a member. Use link and the discount code in the description. Now that I've paid some bills, it is time to make an episode of The Independent Minds.
00:02:20
Speaker
Hello, Daryl. Hi, Michael. How are you today? i' am very well. Thank you very much for joining me today. It's great to have you. I thought we could start, please, by you telling us a little bit about the story that led to you being Succession Plus in the UK.
00:02:33
Speaker
Sure. It's a long story dating back to about 2000, even though we didn't start Succession Plus here until 2019. I've been operating as a business consultant slash coach, working specifically with SME businesses. My focus had been on growth, growth through the various stages and steps of a scaling business.
00:02:55
Speaker
Business owners, they've scaled their business, they've grown their business for a number of years. and And at some point they go, it's time to move on to something
Challenges in Business Exit Preparation
00:03:02
Speaker
else. I saw a number of business owners just going through an exit plan, selling their business,
00:03:07
Speaker
without doing all of the proper preparation that is required to get a good exit experience. Only 20% of SME business owners actually get a successful exit.
00:03:18
Speaker
I just thought, well well, that's just tragic that we've we've got to change that. Back to 2000, one of my partners in Oz, a guy by the name of Craig West, had an accounting and succession planning background.
00:03:28
Speaker
He started building a specific exit planning practice, being Succession Plus, and developing and and some of the tools and IP over the years. And by the time I caught up, la he was up and running and been running it for about 10 years. In 2019, we said, well, let's bring Succession Plus to the UK.
00:03:45
Speaker
and And that's what happened. And going great. We need to keep educating and supporting and just helping those business owners get the most from their life's work because it is doable. Yes, you said only 20% of business owners make a successful exit from their business.
00:04:01
Speaker
What sort of things are happening to the other
Impact of Entrepreneur Involvement on Business Sale
00:04:04
Speaker
80%? Some of them are just missing the market, where the industry has just moved on and they haven't kept their eyes on it and they haven't kept up to date, so they've got nothing of value that anybody wants. yeah What happens most of the time, though, is that entrepreneurs can be control freaks.
00:04:19
Speaker
They are overly involved in the running of their business. So in the operational side of the business, which makes their business risky to buy. Entrepreneurs are visionary people and visionary people need to see what they're going to move on to. But if they don't have a vision of what they're moving on to, they can subconsciously find ways to stop the deal from proceeding, putting kibosh on their own business, really.
00:04:44
Speaker
The idea that ah an entrepreneur, business owner, even a line manager in ah in a corporation is so involved in the day-to-day activities that they manage that when they want to leave, there's nothing left after they've gone.
Business Value and Risk Mitigation
00:04:59
Speaker
You can have a manager in a business and that business looks like it's doing well and they sell that business. With my HR hat on, I'm thinking if they've been too involved in their business, the business has been sold. One of the first things that is likely to happen When the new owner comes in, is they going to look at the performance of the people that were employed in that business and say, you're not up to scratch, mate. You're on your way out.
00:05:23
Speaker
Yeah. The thing that most business owners don't realize is the way a buyer is going to value their business. Whoever's going to value or buy their business is likely to be significantly greater than them in size.
00:05:36
Speaker
There's a high chance they've purchased other businesses before. So they know what they're doing. and and Most founders of businesses will only ever sell one business. And what they don't realize is that the valuation of the business is is not a representation of how much work and effort you've put into your business over the years.
00:05:52
Speaker
It's the value you've created and the acknowledgement of risk And a business that's filled with risk gets a low valuation. And a business that's mitigated all the risk gets a higher valuation.
00:06:05
Speaker
What I mean by that is people in many businesses today are the biggest risks because either they're too involved or they're trying to they're they're running the business and doing all the operations from memory because they've got so much experience.
00:06:19
Speaker
Nothing's documented, nothing's standardized, and There are no measurements and checks and balances in place, which goes back to your performance management. They often become very insular. And therefore, when you put the spotlight on them and expose them, all of a sudden we go, oh, we're not as good as we thought we were, either through yeah lucky and had some good financial performance, or we've just been doing things the way we've always been doing them and and not had much in the way of outside influence.
00:06:46
Speaker
And therefore, we're we're not aware of how effective or ineffective we are. In those few short sentences there, you have highlighted that it's arrogance is ah is really what you're talking about. You have to be very confident to be an entrepreneur, but yeah you can it can be your greatest asset at particular points in time.
00:07:07
Speaker
But when you move from being an entrepreneur type organization and into a more mature organization, that self-belief arrogance can actually be the worst thing that you've got because your arrogance, your self-confidence stops you from seeing the reality of the situation. You are just, we're perfect. This is better than anybody else.
00:07:28
Speaker
And then what you actually have to do is convince a potential buyer that you are the best. But this idea that you remove the risk for the buyer is really so important.
00:07:41
Speaker
You've got to remove the risk. so that so people can be confident that they're buying a going concern. Yeah, 100%. And that's what is often uncovered in the due diligence process. When business buyers go through due diligence, they're not trying to catch you out.
00:07:57
Speaker
They're mostly going, I just want to be sure of what am I buying here? What's the likelihood that the business revenue pattern will continue after a change of ownership?
Aligning Business Appearance with Performance
00:08:08
Speaker
They're seeing an opportunity for their own business to complement their own business And they just want to be sure. i suppose that's the difference between selling in the way that you want to sell and selling in the way that you're told you're going to sell is making sure that the outside appearance is matched by the internal performance.
00:08:27
Speaker
Yeah. Most business owners have never sold a business before, so they're not sure what buyers are looking for. Business owners tend to go, well, the business is worth X to me, um or I think it's worth why And without any proper preparation and guidance and and looking at it from a buyer's perspective, now, if they know that, then they can make all the adjustments in advance of how the market's going to look at their business and then go, okay, if I've got time and I'm doing this in advance, where am I at? Am I going to sell to a trade
Exploration of Exit Strategies
00:09:00
Speaker
buyer? Well, what would a trade buyer want?
00:09:02
Speaker
Am I going to sell to a strategic buyer? In which case, you might prepare it a bit differently, make some some different changes. You might go, you know what, I've taken the business as far as I can, as I want to.
00:09:13
Speaker
i think I've got a great management team behind me. Maybe I'll sell it to the employees or an MBO and do some combination there. and And that way I'm doing it to, ah I guess, a known company.
00:09:23
Speaker
friendly buyer. there's There's different options of who we exit to, which suggests that we should be preparing the different or or our approach to exit will be different based on who our target market is. One of the things that seems to be key to this is understanding As an entrepreneur, your role within the organization at different stages of the organization's development. Oh, totally. One of the things that is important when you come to sell a business is that you're not the business.
Evolution of Entrepreneurial Roles in Growing Businesses
00:09:52
Speaker
It might be your name above the door, but there is more to the business than simply your presence. You are a figurehead, but business can survive without you. Oh, 100%.
00:10:01
Speaker
I know from looking at your website that you have a very crystal clear model of how the role of a business founder, a business manager evolves as an organization grows. and There's five stages and 21 steps which cover all of the the elements, if you like, of what you want to address to prepare your business for that exit journey in a way that's going to be most attractive from a buyer's perspective.
00:10:28
Speaker
So it's it's just identifying all the risks that a buyer will see and then taking you through that journey of helping you understand how a buyer is looking at it so that you can enter the process from an informed perspective. What are the five stages?
00:10:42
Speaker
Stage one is identify the value of your business. We'll do an audit and it's a bit like a due diligence, but we're sitting on your side of the desk, not the other side of the desk. Then the next bit is, hey, look, if you were operating at best practice profitability, here's the impact on your valuation.
00:10:58
Speaker
So we can get the first bit is if we improve the profit. And then we go, okay so what if you made your business more attractive to strategic buyers? To move up from an average multiple to ah a higher multiple in your industry and your sector, then what impact would this make on your business valuation?
00:11:15
Speaker
So we're identifying a value gap between now and what the business could be worth all at your current revenue levels. And so at your current revenue levels, there's on average through the thousands that we've done now around the world, it's like a 30% uplift is available. So owners are leaving at least 30% of the value on the table if they don't prepare. So that's stage one.
00:11:37
Speaker
That rolled off your tongue, didn't it? You're leaving 30% of the value on your table if you don't prepare. That's a big amount in any business. If you're aware of that and you've got that magnitude and that context, you can then make informed decisions about how much effort you put into preparing for exit. Yes. This isn't something that you would start when you decide, oh, now I'm approaching the time when I want to exit my business. there There must be all sorts of things that you can do long before you reach that point. You've almost got to set up your business with the with a plan of to how you will exit, when you would exit,
00:12:13
Speaker
What will be the measurements that it will be right time, right revenue to exit? You've got to have that in mind when you almost start your
Importance of Exit Planning from the Start
00:12:20
Speaker
business. Oh, 100%. And especially if you're one of those businesses who's looking for some external um funding in your business. And if you want to get an investor on board of your business, the first thing they're going to ask is, how do I get my money back?
00:12:34
Speaker
What's your exit plan? Because I'm dependent on you in exiting the business to get my money back. Yes. or you buying me out in in some short plan. How do I get my money back is the first thing an investor wants to know.
00:12:45
Speaker
So you need to be looking at that right away. Now, reality is not all business owners are getting investment and they're not thinking about their exit when they start their business. They're just assuming that it'll all be smooth sailing when the time comes. It's true. What is stage two?
Protecting and Maximizing Business Value
00:13:00
Speaker
Okay, we've identified what you've got.
00:13:02
Speaker
Stage two is let's protect what you've built already. So protecting the value is going, especially if you've got more than one shareholder in the business, is understanding your exit or your unplanned exit.
00:13:13
Speaker
Our research shows that 52% of business exits are unplanned. And that's death, disability, divorce, or yeah any any number of unplanned scenarios. But in the case of an unplanned exit, you still want to make sure that those who are left behind are looked after in the way that you intend.
00:13:31
Speaker
So there's that and just working with eliminating the risks and and doing a complete risk management strategy and business continuity planning, all of those things that if it can go wrong, it probably will at some point. Actually, I suppose the risk that you want in your business is the the things that are going to grow your business.
00:13:49
Speaker
The risks you don't want and which you have to mitigate or remove are the things which are going to slow your business down, damage its a pre progression and its development. The variable risk or the the risks that grow your business are the ones that you focus on and the ones that you manage and control are the risks that will slow your business down.
00:14:07
Speaker
I like that. yep What about stage three? Stage three is, well, now we've got a good foundation to build on and we've got all of our our risks managed. We now go, let's maximize the valuation. I alluded to this earlier, I think, when I said, look, we can maximize the valuation from, ah we can just improve the profitability.
00:14:25
Speaker
but you never really grow by cutting costs. So can you increase your prices? Can you get clients to buy more and reduce your sales costs? It's looking at all the areas to improve your profitability and getting best in class profit. But where the real wins are is how do we build the intangible assets?
00:14:44
Speaker
How do we identify those things that make your business more attractive than your competitor, which are usually your intangible assets, and then improve the multiple that you're going to get?
00:14:55
Speaker
How do you get attractive to a strategic buyer? Intangible assets are things like brand. How do you get clients coming to you for your brand rather than because Michael works there? and And I know Michael, I've worked with Michael before and I'll go to Michael and we want people coming to you to buy your brand rather than buying the person. yes The other way to do that is depending on whether you're a product or a service business is how do we systemize and and structure and build some IP into your process and what you do for clients and and ah sell the process rather than the person.
00:15:29
Speaker
And if we're selling the process, we can build some IP around that, but it really protects your business from that people element. And that, if you've got IP and your business becomes known for your IP, that is gold.
00:15:42
Speaker
That is de-risking supreme. Yes. And then there's a whole lot of other things. of yeah We've talked system-wise, we've got um culture and employee retention, we've got the way your revenues are structured, and there's a whole lot of other things that we want to look at, but they will maximize the valuation of your business. In that description, I can feel the the nature of the work that the entrepreneur, the business owner, the line manager does has to change from being involved in the business to one where much more strategically involved and the start of the, I am no longer involved quite so much. Yeah. It's it's kind of like a conductor of an orchestra. They're they're out the front, they're looking at what's going on and they're
00:16:25
Speaker
they're They're a bit taller and they can see everything at once and they can just go, we need to tweak that. We need to update that. And they're getting feedback all the time. One of the big things that we need in place, we hear about KPIs, but we need to build good solid monitoring systems. And that includes lead indicators and lag indicators.
00:16:44
Speaker
And we need to have them at steps all across your primary workflow. And what I mean by that is your marketing. We need to be monitoring the marketing performance, the sales performance, and the onboarding performance, the delivery performance, all those things that are directly linked to revenue coming into your business.
00:17:02
Speaker
How are we going with actual results compared to planned results? And what remedial activities do we need to implement quickly before it's too late? Instead of doing the sales, instead of doing the customer service, the entrepreneur, the manager is monitoring the customer service, monitoring the sales and doing that comparison between what we plan to achieve, what we wanted to achieve, and what we are actually achieving, and then asking someone to put the remedies in to make sure that we are on plan.
00:17:33
Speaker
Yeah, and one way of saying it is the the entrepreneur likes to be able to say, this is the way things are done around here. It's what gives them confidence that when they say that, that things are actually done that way around here.
00:17:45
Speaker
Yes, yes. But it's not that they need to be
Systems for Risk Management and Performance Monitoring
00:17:50
Speaker
involved in that. It's just you can't evolve your role as the entrepreneur to separate yourself from the business that you want to sell eventually unless you have the systems in place that remove the risk, manage the risk, and tell you what is going on in the business without you actually having to do the work.
00:18:11
Speaker
yeah What's the next stage?
Taking the Business to Market
00:18:13
Speaker
Stage four? Okay, after we've maximized the valuation, and it's fair to say it's probably worth saying at this stage that maximizing the valuation, depending on how far you want to do it, can take anywhere from one to, I guess, 10 years if you really want to leverage things up because the business will continue to scale and the the the opportunities that are available will continue to increase.
00:18:33
Speaker
So after maximizing, we then go, hey, look, I've built this business. I'm ready to exit. I'm ready. The business is ready. Let's take it to market and extract the value from the business.
00:18:44
Speaker
So what do I have to do to actually go through that marketing process of of so of getting the money out? And hopefully, if you've done everything right and everything's gone to plan, you've now de-risked your personal life because your business is typically your biggest asset when you've you've got to this stage.
00:19:02
Speaker
All your eggs are no longer in that one business basket. You've got ah a nice big healthy bank account and as a result of the work that you've done. So ah you've extracted the value from the business and that's stage four.
00:19:14
Speaker
And making sure that you do it with getting all of your tax advice and legal advice and because there's so much opportunity to mess it up big time. So we we get do tax planning and and legal planning and to do again, look at your risks to make sure that you're not exposed to risks after you've exited the business.
00:19:32
Speaker
Right. And I suppose that is one of those stages where you go from being the adult in the room to being the child, the learner in the room, because you've got to really find those tax legal experts oh yeah to guide you through it.
00:19:45
Speaker
Whereas what you've been used to in your business, in your department, is being the font all knowledge, the person who makes the decisions. And you are going to, as an individual, have to accept that you don't know it all.
00:20:01
Speaker
But once in your life, you do not know it all. There is someone with loads of degrees and qualifications and whatever who is the expert in this and it's time to trust them. That is such an important point, Michael.
00:20:13
Speaker
Look, you only get one crack at this as a business owner. yeah for for For most of us, we only get one crack at getting it right. This is such an important asset decision, especially if it is our biggest asset.
00:20:25
Speaker
There are so many opportunities to get it wrong. I just encourage you to really get the right advice at this stage. sort ah As you say, you've you've been calling the shots all this time. You've been selling your products, your services, whatever they are.
00:20:39
Speaker
You know all about that. But now you've got to make the mindset shift of my business is now my product. Well, how do I, know, I've been thinking about my customers all the time and and what they want from my product.
00:20:51
Speaker
Well, you've now got to think that you're the customer because your business is now the product. How do I make, you know, the business attractive to be acquired? And and that takes a mindset shift.
Focus on Valuation Growth Over Revenue
00:21:03
Speaker
And if I'm going to make that mindset shift, that would correspond with the shift I should have made earlier. And at the beginning of stage three, I should have mentioned this. That's when you need to make the mindset shift from just revenue growth to how do i macro the valuation?
00:21:18
Speaker
Instead of increasing the revenue or the profit every year, how do I look at increasing the valuation every year? So it's a mindset shift to help you with your your business planning and your budgeting and what have you.
00:21:28
Speaker
Yes. Yeah. I'm realizing that actually. What about stage five? Stage five is where you've now got that big fat, healthy bank
Post-Sale Wealth Management
00:21:40
Speaker
account. You've hit your freedom number and you know you don't need to work again. But sometimes you've done so extremely well and you've you've built some generational wealth.
00:21:49
Speaker
This is where yeah we've we've all heard the story, I'm sure, where we yeah the story is of what the way wealth is managed is the first generation builds it, the the second generation yeah manages it and enjoys it, and the third generation blows it.
00:22:02
Speaker
What we want to do is is build some some systems and estate planning in in play so that the generational wealth holds. and And it doesn't have to be for multi-generational. It could be just making sure that yeah if it's your kids or your family or or however,
00:22:16
Speaker
but let's make sure that you've got these different assets you want to spread. you You need some help to managing this asset, which is different to your business asset or differently. What was your business asset?
00:22:29
Speaker
How do I then manage that to make sure that yeah we get the best value out of that moving forward? So it's asset and estate planning and ongoing investment planning. Key thing is that once you've worked hard,
00:22:41
Speaker
and made this money, that or the wealth is protected and you know not that there is this amount of money in the bank you can spend it, but then that money has to generate the income that you will use rather than the don't use the capital, use the income that the capital generates. Yeah, exactly. And one of the risks that I've seen, Michael, is that an entrepreneur that's been successful and had a successful exit sometimes falls into the trap of, hey, I'm pretty good at this.
00:23:09
Speaker
yeah They want to help others. They've been successful and and they want to share that experience and help others. and And some of them fall into becoming angel investors. And I've seen situations more than once where they end up investing too much into too many opportunities that just weren't filtered properly.
00:23:28
Speaker
Yeah, I suppose the big risk is that you allow success to go to your head and believe that it can be replicated, even though you know that creating this success that led to your successful sale of your business was based upon an awful lot of your hard work. Yep.
00:23:46
Speaker
There's probably a posh word to describe how I feel at the moment, but it is just ah and an eye-opener as to all of the things that are involved. And like you say, you know you start off with working in the business, you're then managing other people that are working in the business, then you gradually, as the business gets bigger or as you start working towards selling, you you become less involved in the business and you you've outlined the activities that you have to undertake, which should dictate the change in your role within that business. So you cannot do everything.
00:24:22
Speaker
And the succession plan is where you've got to make sure that you've mitigated the risk of you no longer being able to do what you used to do. You've got someone else or maybe more than one person who's going to take over your job, the roles that you performed so that you can take on the new roles that are associated with developing, evolving a business to the point where somebody says, I want to give you some lots of money for the business that you've built.
00:24:50
Speaker
Yeah. and And here's a way to look at it. And and sometimes I break it down like this just to make it more palatable and bite-sized chunks for the owners.
Transitioning Entrepreneurial Roles to Leadership
00:24:59
Speaker
Because by the time I meet them, they've already had one or two exits.
00:25:03
Speaker
And the first exit is you've got to get yourself off the tools, off the doing work. yeah And the way to do that is to design your role and design how you like it being done in your business, whether they be outcomes or processes or both, but you need to design the role. And once you've designed the role, well, then for entrepreneurs, it sort of becomes boring.
00:25:22
Speaker
So you replace yourself with people and go, look, I've designed the role for you. Here's the job I want you to do. So you get yourself off the tools. There's your first exit. And then you get yourself into a functional management role.
00:25:33
Speaker
So that could be you're the marketing manager, or the sales manager, whatever it is. You're the the finance manager of your business. You're now in a management role. So you repeat the process. You go, well, let me design how I want the management role to be done. I've done it a a year or two now.
00:25:48
Speaker
I'm pretty happy with the way it's being done. I've designed it. yeah I'm now ready to move on. And I'll employ someone else to do the role the way I want it to be done. And now you're in hopefully the CEO or the the head leadership type of role. So you're now really off the tools and you're out of any functional responsibility and you're running the business from a strategic perspective.
00:26:08
Speaker
Hopefully you're not involved in any revenue generation. You're monitoring and reporting, but you are now in the CEO equivalent role, whatever we want to call that for an SME. So you've had two exits and you're in your third layer now.
00:26:21
Speaker
So now, know, the next exit that you can do is you can well, you can take yourself out of the CEO role, which is a big scary move for some people. And you just put yourself into the chairman of the board type of role.
00:26:32
Speaker
So now you're fully running the business by remote control. You're not in there day-to- day to day. You're in a board role. yet you're You're head of the board. You're head of strategy. You're head of the big choices of the organization.
00:26:44
Speaker
And you're not necessarily working many days a week. in or in the business. You may have other things that you're involved. with
Stages of Entrepreneurial Exits
00:26:50
Speaker
Okay. So now you're on the board and you're chairman of the board. The next thing that you can do is extract yourself off the board.
00:26:56
Speaker
So you're no longer in an employment role. You're no longer in a control role. The only thing left for you is you just arent you're just a shareholder now. And you just own shares and you're collecting dividends.
00:27:08
Speaker
Now, that's great. and And that might work if you've been with HSBC and there are so many shareholders that it doesn't make a difference and they've got a really solid management structure and team.
00:27:19
Speaker
But in an SME, a remote owner is dangerous and it puts the business at risk. It puts their shareholding at risk because... Yeah, it's too easy. it's not too easy, but it is possible for employees to effectively run off with the business.
00:27:33
Speaker
So you don't want to do that for more than one or two years. So you've you're now a shareholder. And then the the last exit is that you exit your shareholding of the business, whether you sell it or or yeah however you transfer ownership there.
00:27:46
Speaker
But that's your last exit. So when you break it down into bite-sized chunks, it becomes more manageable and it's step-by-step process. And each step is easier to swallow. and ah work through. It's an evolution, a learning game.
00:28:00
Speaker
Every day is a school day, but I've certainly learned a lot, Daryl. Thank you very much. Really appreciate your time. It's been great. Thanks, Michael. I've ah enjoyed sharing with you. Yes. Yeah, of course, what things in all of that exiting and designing of jobs and passing on that instruction, the thing you really need is a damn good HR person.
00:28:19
Speaker
Absolutely. Thank you very much, Daryl. Thank you. I really appreciate your time. It's been great. Thanks, Michael.
Episode Wrap-Up
00:28:24
Speaker
I am Michael Millward, the Managing Director of Abbasida, and I have been having a conversation with the independent mind, Daryl Bates Brownsword.
00:28:33
Speaker
You can find out more about both of us at abbasida.co.uk. There's a link in the description. I must remember to thank the team at matchmaker.fm for introducing me to Daryl. If you are a podcaster looking for interest interesting guests, or if like Daryl, you have something very interesting to say, matchmaker.fm is where matches of great hosts and great guests are made.
00:28:55
Speaker
There's a link to matchmaker.fm and an offer code in the description. The Zencastr system has, as always, been very efficient today. But if you are listening to the independent minds on your smartphone and have experienced technical issues, you may like to know that 3.0 has the UK's fastest 5G network with unlimited data.
00:29:15
Speaker
So listening on 3.0 means you can wave goodbye to buffering. There is a link in the description that will take you to more information about business and personal telecom solutions from 3 and the special offers available when you quote my referral code. That description is well worth reading.
00:29:32
Speaker
If you have liked this episode of The Independent Minds as much as we have enjoyed making it, please give it a like and download it so that you can listen anytime, anywhere. To make sure you don't miss out on future episodes, please subscribe.
00:29:46
Speaker
Remember, the aim of all the podcasts produced by Abysida is not to tell you what to think, but we do hope to make you think. Until the next episode of The Independent Minds, thank you for listening and goodbye.