Curt Robinson closed his middle desk drawer with a resounding thud. “This is the last time I’ll be sitting here,” he thought to himself as he threw last year’s calendar into the cardboard box of odds and ends that he was taking home with him. “My job here is done.”Robinson, co-founder and, until recently, CEO of Robinson-Schmaltsky-Diggler & Associates Architects, had finally done it. He had sold the firm and cashed in his chips, and he was still only 47 years old. He truly felt good about the transaction that had taken place. Every one of his people was going to be as well or better off than they were before, and it was time for Curt to move on. He was getting bored with what he was doing, not that he wasn’t darned proud of the firm and all he had accomplished. He still liked the work, but it was time to do something else.Curt Robinson’s deal paid him $2.5 million, most of it when the deal closed and the final 25% or so spread out over the coming three years. He didn’t feel rich, but he was in good shape before the transaction and was even better off now. Sure, he could have hung on another two or three years and turned that $2.5 million into $3.5 million, but what the heck. “There’s more to life than money,” he thought. How did he do it, you might ask? Here’s how:He set out to do it. It wasn’t an accident that the firm was worth millions in the end. Every decision that Curt and his two primary partners, Lou “Bud” Schmaltsky and Derek Diggler, made had the end result (firm sale) in mind. They concentrated on making Robinson-Schmaltsky-Diggler & Associates a household word in its primary market (college and university work). They made darn sure that all client relationships weren’t flowing through them. They invested in their accounting, marketing, and information technology infrastructures so they could communicate well internally and externally, and pass on knowledge to every single employee. He was open about his plan and wasn’t the least bit embarrassed about it. A lot of people who want to sell their firms act like there’s something wrong with that. The truth is, many times, the employees are better off after a firm sale than they were beforehand! Robinson knew his interest was waning and he also knew that the buyers were a lot better capitalized, than Robinson-Schmaltsky-Diggler Architects was. That meant that someone else would step into his job, and the company would be better able to sustain the investments required to keep the firm in a competitive position.He was a good delegator. Your ability to pass things on to others and feel good about it becomes critical if you don’t want to be trapped by your business. Robinson and his two primary partners were good at that. None of them felt like they had to get credit for every sale of a new job. They didn’t micro-manage every detail of the projects they worked on. They didn’t do the concept design for every worthwhile project. This led buyers to understand that the entire value of the business didn’t lie in the three founders. It was much deeper than that. And that’s critical, especially if the founders are going to be the biggest beneficiaries in the sale proceeds. They are bound to be less motivated after the transaction. But that’s not as much of an issue if they aren’t critical to the daily operations of the firm.He worked hard to make himself obsolete. Robinson, as an effective delegator, basically worked himself out of a job. That’s critical if you want to get away from the place!He wasn’t greedy. In order to grow from three employees (the founders) to 300 employees, the firm had to give a lot of good stuff away. I’m talking specifically about pay, benefits, profits, tools and equipment, and even ownership. At the time of the transaction, the “big three” together only owned 42% of the stock. The company was valued at $17.2 million. Forty-two percent of $17.2 turned out to be about $7.22 million. Not bad for 15 years of work and a decent living ($200K+ annually) most of the years along the way.This story is fiction. But real success stories like this one are being told every day by owners in the A/E/P and environmental consulting industries. Originally published 5/7/01.
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