A 5 Million Dollar Lesson
I began my quest for entrepreneurial success at the age of 11, delivering newspapers door-to-door and then starting a small landscaping business. I grew up one of seven in a modest Irish-Catholic family. My father worked nearly his entire career at IBM and earned a steady income sufficient to meet our family’s needs. But from a young age I dreamt of the freedom that could come from building and eventually selling my own business…for millions.
After advancing through law school and quickly rising through the ranks both at a large prestigious firm and then at a Fortune 500, I founded an innovative legal consulting and tech firm in 2007.
The business grew quickly, and I took out larger loans to support the growth. But then the 2008 financial crisis hit and I started to feel the pressure of unpredictable revenue. My children and their mother felt the brunt of the pressure, with me working constantly and stressed to the max.
Even yet with this pressure, I turned down multiple opportunities to sell the business in the first few years.
In 2011 I turned down a $5M offer because I felt like I could grow the business much larger, even though I was starting to burn out.
Unfortunately, the crisis lasted much longer than I anticipated. Revenue fluctuated for months and then years, and then our lenders put severe restrictions on our capacity to borrow. At one they threatened to find us in violation of lending covenants, and I feared losing the business completely.
This fear became a paralyzing force that distracted me from focusing on the fundamentals of the business. I struggled to be productive most days. A psychiatrist prescribed an antidepressant to help me deal with spells of severe anxiety and depression. I consumed copious amounts of coffee just to function, and turned to alcohol at night to help calm me down.
These coping strategies worked for awhile. Until it all caught up with me. I hit rock bottom on November 3, 2012. Everything in the business and my personal life hung in the balance.
I immediately realized that morning that I could no longer keep chasing more for the sake of more. It was time for me to accept that I’d take the business as far as I could and that it was time to sell. But to do so, it was obvious that I had to completely overhaul how I was leading and living to exit successfully.
And I did just that, by asking for help from fellow entrepreneurs and researching how best to break and replace the negative habits that had taken me to that dark place. I overhauled my diet, began intense outdoor exercise, and started focusing on the most important aspects of the business that would increase the likelihood of selling at the highest price.
Within six months, I came soaring back and so did the business. So much so that I re-engaged the large consulting firm that had offered $5M to buy the business just 18 months earlier. After some initial due diligence, they said they were no longer were interested. They turned us down. I was shell shocked. How could I have lost a $5M deal that I had in hand just 18 months earlier?
It’s then that I realized that while I had optimized myself after hitting bottom, I had not done so in some key areas in the business. I went to work creating more scale in the business, by investing more time and energy in my team’s growth and helping them lead more effectively. We systematized and documented everything in the business, all while I took more time to recharge more frequently and spend more time with my family.
Within just 6 months, our operation began to scale like never before.
Suddenly the team was driving the growth of the business, not me. Shortly thereafter several parties approached me about buying the business, and a few months later I negotiated a deal worth $1M more than the $5M offer that I’d lost just 12 months before.
In the midst of it all it was clear that the business was never the problem. I was the problem. For too long I ignored how my lifestyle and daily habits were eroding the business. I also put off planning for my exit and the eventual sale of the business, and that nearly cost me everything that we’d worked so hard to build.