Most of us understand that to do anything really well requires dedication and total concentration. However; whatever it is that we are attempting to accomplish in an excellent manner will be thwarted by distractions. Merriam-Webster’s on-line dictionary defines a distraction as, “something that distracts : an object that directs one’s attention away from something else(emphasis mine).”
Business owners who are trying to lead their companies to higher levels of success understand the danger posed by distractions. It is a continual challenge. Gordon Seagall, the founder of Crate and Barrel, said “Getting distracted is the biggest problem (emphasis mine)entrepreneurs face(Mills, p.59).” Successful company leaders will manage distractions and constantly reduce them to a minimum.
Those leaders who have done an excellent job of minimizing distractions and growing their companies can face this distraction monster again and at a crucial time, when they are going through an exit process with a potential buyer. I have personally witnessed this and have seen a business’s value diminish within months as the leaders became distracted from managing their businesses efficiently. It is a major problem during an exit process. Larry Reinharz, the Managing Director of Woodbridge International, said concerning this issue, “The number one reason our deals get delayed or don’t happen is declining financial performance. While due diligence is important, and deals blow up in due diligence, it’s not the number one reason for delays or blow ups. In rough percentages, the reasons deals are delayed or don’t happen are as follows: (1) Declining financial performance (80%), (2) Unresolved issues that pop up in due diligence (10%) and (3) Owners getting cold feet and backing out (10%)(Mills, p.57).”
Notice Reinharz said that 80% of deals fall through due to declining financial performance. Do not let distractions cause your business to decline through the exit process. The Exit Strategy Handbook lists several ideas for avoiding distractions during the exit process including but not limited to the following:
• Work as if the sales transaction will fall through.
• Work up to the day of the close.
• Remain the innovator, the dreamer, the visionary and the idea generator.
• Never quit(Mills, p.61).
Don’t let distractions kill a great business or exit!
*Mills, Jerry L. (July 2016), The Exit Strategy Handbook