Jerry Mills founded B2B CFO, the nation’s largest CFO firm, in 1987 and is considered a pioneer in the CFO Services industry. Mills was recently named an AM&AA Thought Leader of the Year finalist for his book, The Exit Strategy Handbook. Jerry also founded B2B Exit, providing exit tools and talent to assist in exiting your business.
Fundology: Jerry, can you please give us a brief introduction, and tell us what drew you to the space.
Mills: Yes, well first let me tell you just briefly about myself. I started my career with Arthur Andersen. I was a manager. I saw this void in the space, and I just started this business in 1987, and we now have professionals in my company in 45 states around the country. So here we are.
Fundology: You’re an expert on business exiting. What is the most important thing that a business owner should do to successfully exit the company?
Mills: Well my experience in over a quarter of a century is that most business owners don’t understand that it’s harder to sell a business than it is to build it. They’re really good at building, and they haven’t had the experience of selling it. And when they decide to sell it, they typically don’t know the right price, and they don’t know the process. So what we try to do is teach them the process because if they take their eyes off of running the company, typically sales, and also the value of the company, whatever the value is, goes down. And so what we find is they’re just really good at building businesses, they don’t know how to sell it properly. And that’s what we help with.
Fundology: When you’re advising a company that is planning an exit, do you do all of the work yourself? Do you bring a team in to work with you?
Mills: No, we don’t do the work ourselves. We advise the business owner against that. That’s one of the hallmarks of The Exit Strategy Handbook, and also the software that we’ve written for this process. We felt that the business owner needs a team. The business owner needs to be in charge, and that’s why with our software they can look at the process every day if they want to, to see where it is. But we want a team. We call it the success team. We want typically an M&A firm or investment banker. We want an attorney that the owner trusts. We want tax CPA’s so they can calculate the after-tax money. We want certified valuation appraisals and so forth. Usually we recommend there’s about eight to ten people on that team that work in congruence with the business owner in helping support them. We believe in the team concept because there’s so many good professionals, and they need to use their skill set to help further the goals of the business owner.
Fundology: And how do you select those team members?
Mills: Well, business owners are interesting. They typically have some people that they already know, maybe an attorney, maybe a CPA for the taxes or audit, and so they have relationships, and typically they like keeping those relationships. But if they don’t have other relationships; for example, an M&A firm, an investment banker, or if they need some other advisers — we’ve been doing this for a long time, and we just have those relationships. We typically — when we introduce a professional to the business owner, we ask them to interview two or three different people because the personality has to fit as well as the skill set. They have to get along, and not only with the business owner, but with the team. So we will make recommendations, and then hopefully, by going through that process, we can build a cohesive team. And simultaneously, we can let the business owner keep doing what he or she is doing, get out of the process, and just go build the value of the company.
Fundology: Can you tell us about a unique situation that you’ve worked on, advising a company?
Mills: Well, there have been so many. We had one in our firm recently where we were going through this process. It was a female-owned business, very successful. And she was married, and she passed away suddenly. And so her husband then was given the role to step in her shoes to go through this exit strategy process. And he fortunately, we think, inherited the values his wife had. She didn’t take the top bid. She went with a lower bid because the lower bid had the values of taking care of her employees. And so you never know when you’re working in a situation. What we want to do is work together with our professionals and the team to carry out the goals and missions of the business owners. So that’s a unique situation, but overall, it may not be that unique.