Why would an owner, less than 55 years old, sell a highly profitable business that is currently allowing him to enjoy a very comfortable lifestyle and income? This is the question I recently asked as part of serving a client in a buy side advisory role. This is what we learned after digging into the situation.
1. Through examining the history of the prospective acquisition candidate, we learned that over a 15 year period, the owner had been relentless in his effort to build systems and processes that consistently delivered profits and a safe, quality service to his customers.
2. As profits grew, so did the opportunities to hire staff and an experienced management team to take the business to the next level. Eventually, the owner was able to displace himself and dramatically transformed his personal lifestyle. This was a well-deserved change of pace. He stayed engaged but allowed his leadership team to step up and perform most of the heavy lifting.
3. Over time, the company continued to deliver profits and attract good people. However, he began to sense that the culture of the company may be losing the “razor” edge that was so instrumental in the company’s development, impressive safety record, and success.
4. Then, earlier this year, the business experienced a major incident that resulted in the death of one of his most experienced and beloved drivers. The owner felt responsible. He felt like if he had still been engaged like he was just 3-5 years, that driver would still be alive.
5. He attempted to reengage into his old role in the business. The problem was that he had lost the passion. The fire was no longer there to do what is required to perform at a high level in this business while maintain the necessary safety standards. On top of that, a mountain of stress fell on his shoulders, and he stopped sleeping for months. Each night he worried for his drivers and for others on the road.
6. Eventually, he realized that the only way to protect the safety of his people, his wealth in the business and his long term health was to pass the torch to someone else who was prepared to do what he was no longer able or willing to do.
Takeaway: The trucking industry is a high stakes, high risks business. If you lose your edge to compete at the highest level, you often invite exponentially more risks into your life. These risks can disrupt the lives of your employees and your family as well. When this owner realized he was overexposed, he did what was right for him and the people he cares about most.
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