Avoid the Trap of Golden Handcuffs After You Sell

**James Gardner** (0:00)
Then I turned around 40 and I got a little bit itchy feet and midlife crisis. I didn't want to buy a fast car or do anything silly. So I was looking at, do I start another business or what do I do? And I kind of realized I don't work well for other people. And you've got to weigh all of those things up and decide what you want to do. I think you've also got to decide, do I want golden handcuffs or do I want the freedom to be able to come into work every day, or every other day, or whatever your contract says, and be happy to do that? Or am I going to hate coming into work every day? Because that's really important to your mental health.

**Jacob Oros** (0:39)
Welcome to M&A Talk, the number one podcast on selling a business brought to you by Morgan & Westfield, a boutique M&A firm specializing in the sale of small to mid-sized companies. I'm your host and president of Morgan & Westfield, Jacob Oros. If you're considering selling your business and you'd like to work with me throughout the process, you can schedule a free consultation at morganandwestfield.com. Or if you'd like my team and I to perform evaluation of your company for a one-time fee of $1,500, visit morganandwestfield.com or see the link in the show notes. Today, we're going to talk to James Gardner, and James is a serial entrepreneur. He started a manufacturing company and later sold that and stayed on with the company. And we're going to talk about that experience, that Golden Handcuffs experience, and some of the lessons that he learned from that process. And James, welcome to the show.

**James Gardner** (1:37)
Thank you, Jacob. It's great to be on.

**Jacob Oros** (1:39)
So Golden Handcuffs, first of all, what is that? And then we'll talk about why.

**James Gardner** (1:43)
So for me, it's a way of describing how I felt personally when I'd sold my manufacturing business and stayed on for a number of years afterwards. And it was the miss-sell, I guess, of on the emotional side, the finance went through fine, there was no issue with that. But on the emotional side of building up this business, literally from scratch, and we can talk about that in a minute if you like, and then passing it over to somebody and staying on and seeing how they handled your business and more importantly, your team differently to how you would.

**Jacob Oros** (2:14)
What's your experience when it comes to this?

**James Gardner** (2:17)
So firsthand, building a business, literally my brother and I started a business back in 2000 My first day was working on my sister-in-law's dressing table in their bedroom with a laptop and a fax machine and a phone just to make some calls. He was in a manufacturing industry and we were trying to carve out a niche for us in this small to medium volume users of industrial plastic components basically.
It was something that was just kind of joyous to build and to work with my brother. I've got two wonderful brothers, but my eldest brother is 12 years older than me. I got to work with him for 15 years and we built that business up literally from scratch. From that, we moved into a farm building and we had a garden shed as our first office that we lined and carpeted and painted and had two desks in there and a filing cabinet and a couple of phones. Away we went. From there, we built a business to be multinational. We then started in St. Louis, Missouri and in 2009, Halloween, the 31st of October, I flew over to St. Louis and set up a division of our business in the US, which was fantastic. Then we built the team up and up and we'd done all of this work and working on acquiring customers and looking after them and all that goes with that, the blood, sweat, and tears as people call it. Then we were approached by a business to acquire us. Long story cut short, but we agreed and signed on the dotted line, but then stayed on and it was the most money I'd ever had in my bank account at that time but probably the most unhappy I was as well.

**Jacob Oros** (4:00)
Interesting. Now you're the CEO of six companies and what else are you doing now?

**James Gardner** (4:05)
Yeah.
I stayed on with that business, our post-acquisition. My brother and I actually ended up running the UK and European division for the business that had acquired us, and we stayed on. He then retired at 52 He was the majority shareholder of our business, so there's a good rule of thumb there is always be the majority shareholder and he's very happy now retiring. He's got a property portfolio and loves his life, which is great. I stayed on and ran that business for another three years and was the CEO for their UK European division. Then I turned around 40 and I got a little bit itchy feet and midlife crisis. I didn't want to buy a fast car or do anything silly, so I was looking at, do I start another business or what do I do? I realized I don't work well for other people. It was okay and the company that bought us were great, apart from one or two people on the UK side that left. But I wanted to see whether we could just roll the dice and do something again. I didn't want to wait another 20, 25 years, get a nice pension and a gold watch. So I thought, what do I do? And starting businesses is really hard. So I stumbled across M&A and was reading about it and listening to podcasts like this, and learning different things from different people. And then I was trying to find out what business sector would I buy in? Because I didn't want something that was just going to be sort of not recession proof is what I was looking for. And I didn't really want to go down the manufacturing route. I wanted something different. I thought it was a bit cheeky to go back into the business that I'd already just built up and sold for whatever reason. I think my morals kicked in there. And a phrase kept coming back to me that there are two certainties in life, which is death and taxes. Now, I didn't know much about taxes apart from paying a load. But I did know something about the death industry, because one of my first jobs when I was a young teenager was, I used to wash the cars for a local funeral home here in the UK as a Saturday morning job. And anyway, I stayed with that company for a while and washed more cars and then started to learn the trade a bit more. And actually left university early to start working as a trainee funeral director in my early teens, early twenties, sorry, late teens, early twenties, and realised quite quickly that it was a small business, family run business, and I wasn't really going to go anywhere within that because my name wasn't above the door. So left to conquer the world, worked for a couple of companies up in London, and then started this business with my brother. Anyway, long story cut short, 2019, I was looking to maybe acquire a business and I thought, let me just reach back out to the owner of the business that I used to wash cars for. He was 62 at the time and I said to him, whenever you're ready to sell the business, would you give me first refusal on the business? He hadn't got a succession plan in place by the looks of it. Anyway, he turned round right there and then we were just having a coffee and a catch up, and he turned round there and then said, I think I'm ready now. So a very serendipitous moment. That was October 2019