You own the shares, but are you really just the custodian?

I’ve built three businesses and I’ve said the same thing most entrepreneurs have probably said to their mates and family at some point: “Give me three years. I’ll build it, sell it and retire.”

Hands up, how many people actually did that?

I don’t think many people start on day one saying, “I’m going to build this into a £2m business, sell it on this date and that’s me done.” You start with an idea. Then you get into it.

You employ people. They build careers around you. Advisers trust you with their businesses. Families rely on the income. Suppliers back you when you’re small. Somewhere along the way it becomes something very different to what you started.

Maybe I’m getting older and softer, but I’ve started to think that once a business gets to a certain size, you stop being just the owner.

You become the custodian.

And that creates an interesting question when somebody eventually wants to buy it. Because I think your head changes.

You’ve spent years looking at growth, people, investment and where the business could be in five or 10 years. Then somebody puts a multiple on your EBITDA.

Suddenly every extra £100,000 of profit might be worth another £600,000 at a 6x multiple.

I’d be lying if I said that wouldn’t change how I looked at certain decisions. That’s not greed. It’s human nature.

And it’s why the structure of these deals is actually pretty clever. Keep the founder and management team for another two or three years. Give the buyer stability, protect the relationships, set targets and give everyone a clear outcome.

It makes complete sense. But it does create a question I find really interesting.

Is the decision that produces the best EBITDA over the next two years always the same decision that builds the best business over the next ten?

Maybe it is. Maybe it isn’t.

Do you still make an investment today that might not pay back for three years? Recruit ahead of where you need to be? Carry a bit more cost because you know the service is better for it?

I’d like to think you do. But when every additional pound of profit potentially has a multiple attached to it, the incentive has changed.

That doesn’t make selling wrong. Far from it.

I’ve watched people in financial services who are brilliant at building businesses specifically to be acquired. You see it in the lender space.

Build the proposition, bring together a great team, put the infrastructure in place, prove it works and sell it to somebody capable of taking it through the next stage. Then a couple of years later, go and do it again.

I admire that.

Some people are brilliant at taking something from zero to 100. Others are better taking it from 100 to 1,000. They’re different skills.

The important thing isn’t how long you own something. It’s whether you understand what you’re building and why.

I’ve probably started thinking about all this more since we bought Rotherham United Women.

Technically, we own the club. But I don’t really think we do.

It was there before us and, if we do our job properly, it’ll be there long after us. Whether we’re involved for five years, 20 years or until we’re too old to remember the score, at some point somebody else will sit in our seats.

Our job is to make sure they inherit something better than we did.

The more I’ve thought about that, the more I think a business at scale is the same. There can be thousands of people relying, directly or indirectly, on the decisions you make.

So I’ve got absolutely no issue with somebody who’s put 10, 20 or 30 years of blood, sweat and tears into a business taking money off the table.

I might do exactly the same one day.

Or I might never do it and they’ll have to carry me out of the office in a coffin. Who knows?

But if that day ever comes, the number on the cheque can’t be the only question.

I’d want to know who I’m handing it to. Why do they want it? What happens to the people? What are they going to invest in? What does the business look like in five or 10 years? What’s their end game?

Because it can take years to build trust with people. If staff have trusted you with their careers and advisers have trusted you with their businesses, I think you’ve got a responsibility to understand who you’re handing that trust to.

Maybe that’s what a successful exit should really look like.

You get properly rewarded for what you’ve built, but the people staying behind get an even bigger opportunity because of the decision you’ve made.

And if five years later you can look back and see the business is bigger, the people are doing well and what you started is still growing, that’s probably worth something as well.

Maybe that’s being a custodian.

You might own the shares. But eventually somebody else will own them.

The real question is what you leave them.