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When he decided to sell his food delivery business Fit2Go, Cesar Quintero identified a key issue that could affect his company’s value. He was involved in all aspects of the company, and it would be difficult for the business to run without him. For Fit2Go to be attractive to acquirers, Cesar knew he had to work towards delegating to other members of his team.
“Leadership isn’t about telling people what to do. It’s mostly just allowing people to take ownership of their jobs and their roles… I did all these things to decentralize me and connect with my team, which was a big game-changer for me.” – Cesar Quintero, founder of Fit2Go
Building a Self-Reliant and Resilient Team
Hub and Spoke is a concept in business that measures the extent to which your business can thrive without you. When owners find themselves at the center of everything in the business, this creates reliance on them, which is an unattractive quality for potential investors and acquirers.
When assessing his business through the lens of Hub and Spoke, Cesar understood that his company was too reliant on him. This led him to create an open-book management style. This style of management involves creating transparency for your employees and outlining how their specific role and output influences the company’s finances. Giving employees a better idea of how the company is run, and how their contributions affect the company as a whole, encourages them to continue working hard to see positive effects.
Under this new structure, each employee understood where Fit2Go was financially positioned and how their work impacted the bottom line. By implementing an open-book management style, employees were empowered to do better and take ownership of their work. With employees now self-reliant, Cesar had new-found time, which gave him the ability to open additional businesses and focus on other passions outside of the business.
Payout With a Purpose
Once Cesar recognized that he’d lost his passion for the business, he knew it was the best decision for both the company and him to sell. However, while looking for buyers, COVID-19 hit and brought everything to a halt. Fit2Go’s sales were hit hard by COVID-19, and Cesar realized he should have sold back when he initially recognized he’d lost his passion.
In the end, he sold his remaining stake in Fit2Go to one of his operation managers and recounts:
“Why [did I] want to sell? For me, it was because it was aligned to my purpose for my employees and empower[ing] them to live the life they wanted to live and also to empower me to live the life I wanted to live.”
Despite selling for less than he would have made years prior, he has little remorse. He made back minimal margins but what he was truly selling was an opportunity to someone with vision. Cesar’s operation manager took that vision and her newly acquired company and has been able to pivot and turnaround the business and expand from only a meal delivery service to a full kitchen commissary.
Cesar, on the other hand, has been able to pour himself into his other businesses that align more with his purpose and bring him happiness.
No one wants to lose out on money but if you’re exhausted and frequently distancing yourself to focus on other passions and businesses, it might be time to consider your exit strategy and give your business a new chance to grow.
If Cesar’s story sounds familiar, you might be looking to exit your company at any cost, or are willing to find innovative ways to pivot. In our eBook 8 Ways to Re-Invent Yourself in a Crisis, you’ll hear real stories of business owners who invested in change to emerge from a crisis with a better, more durable, and more valuable company.