Built to Sell Chapter 7: Growing Pains Every Owner Faces

Chapter 7 of Built to Sell is where the story gets real. Alex has been making big changes to his agency. He has a product now, a sales team, a process. Things are moving. But here’s the thing. Moving forward does not mean everything is smooth.

This chapter is called “Growing Pains” and the name fits perfectly.

The Sales Team Starts Selling

Angie, Alex’s first real salesperson, starts strong. She divides the city into four territories, brings in a colleague from her old job named Seamus, and they set up a whiteboard in the middle of the office to track their numbers. Appointments, logos sold, weekly goals. Very visible, very competitive.

Within a month, Angie is booking ten appointments per week. Seamus gets to eight. And then it happens. Angie closes her first logo sale. She runs into Alex’s office with the signed contract. They ring a bell. The whole office celebrates.

But here’s what I found interesting. That night, Alex realizes he does not even know the name of the company Angie sold to. And he is happy about it. He is finally building something bigger than himself. Someone else can sell the thing he created. That is a big moment for any business owner.

The Hard Conversation with MNY Bank

This is the part that takes guts. Alex meets with John Stevens from MNY Bank, one of his biggest clients. MNY gives Alex tens of thousands of dollars in work every month. Brochures, ads, all kinds of projects.

Alex puts on a suit, sits down, and tells John that the Stapleton Agency will only do logos from now on. No more brochures. No more random projects. This is the last one.

John is not happy. “I’m not sure you’re in a position to dictate to us,” he says. Think about that. Your biggest client telling you that you have no leverage.

But Alex holds firm. He thanks John for the support, explains the decision, and walks out standing tall.

I have seen this situation many times in IT. Big client pays well but keeps you trapped doing whatever they want. Walking away from that money feels wrong. But staying means you never grow past being their helper. Alex made the right call. Scary, but right.

The Accountant Brings Bad News

So here’s what happened next. Alex’s accountant Harry comes in for the quarterly review. And the numbers are ugly. The company is on track to lose $12,000 this month and another $9,000 next month.

Alex is confused. They have lots of cash in the bank. Logos are selling. How can they be losing money?

Harry explains the accounting rules. When you sell a logo for $10,000 and the project takes three months, you can only recognize $3,333 of revenue per month on paper. So even though the cash came in up front, the profit and loss statement shows the revenue spread across three months. The switch from one-time projects to a standardized service creates a temporary gap on paper.

This is something I wish more people understood about business transitions. Your bank account can look great while your financial statements look terrible. They measure different things. Cash flow is about actual money moving. Profit and loss is about accounting rules. Both matter, but they tell different stories.

Harry’s advice? Go back to accepting random projects. Stop this logo nonsense.

Ted Puts It in Perspective

Alex runs to Ted, frustrated. Ted is calm as always. He explains that Harry is just counting numbers. Harry cannot tell the difference between good revenue from a scalable product and bad revenue from random one-off projects. To an accountant, it is all just revenue.

Ted’s advice is simple. Ignore the profit and loss statement during the transition year. As long as cash flow stays strong, the paper numbers will catch up in three months. Once older logo projects start completing, each new month will begin with revenue already on the books.

But here’s the problem. Alex was planning to take a big bonus this year. Pay off the mortgage. Take the family to Hawaii. None of that is happening now.

Ted tells Alex something important. This whole process will take two more years. Two years of running the company with the new model before it is ready to sell.

Alex pushes back. Two years is a long time. But Ted makes a good point. If Alex sold the company today, any buyer would require a five year earn-out. That means Alex would be stuck working at his own company for five more years under new ownership. Compared to that, two years of building something sellable is actually the shorter path.

Breaking the News at Home

This was the part that felt most real to me. Alex has to go home and tell his wife Pam that there will be no bonus this year. No mortgage payoff. No Hawaii trip with the kids.

Pam is not thrilled. They had made promises to the kids. They had plans.

Alex says they can still take a vacation, just somewhere cheaper. He promises it will be worth it in the long run. They hug. He promises himself he will make it up to her.

This is the part of business books that usually gets skipped. The family side. The spouse who supported you for years and now has to hear that the payoff is delayed again. I respect that Warrillow included this. It is honest.

Planning at the Beach House

Ted lends Alex his beach house to do some planning. Nice place. Ocean views, hot tub, stainless steel grill. But there is a catch. Ted gives Alex a sealed envelope with one question inside:

“What is the price at which you would be prepared to sell the Stapleton Agency?”

Alex does the math. Revenue is $1.4 million. Pretax profit is $87,000. Small service businesses sell for three to four times profit. That puts the value under $500,000. Not enough.

Then he thinks about it from the other direction. What would he need to feel free? To pay off the house, maybe travel, not have to answer to anyone anymore.

After a steak, some wine, and a long walk on the beach, Alex writes his number.

$5 million.

That is a huge gap between what the business is worth today and what Alex wants. But at least now there is a target.

My Thoughts on This Chapter

Three things stood out to me.

First, the accounting trap. So many business owners get scared when their profit and loss statement looks bad during a transition. They panic and go back to the old way. Ted’s point is correct. If cash flow is strong, you can survive the paper loss. But you need someone like Ted to tell you that, because your accountant will not.

Second, the two year timeline. Nobody wants to hear that success is two years away. But Ted is right about the alternative being worse. A five year earn-out where you work for someone else is a prison sentence with a salary. Two years of building is freedom.

Third, Alex finally has a number. $5 million. It seems impossible based on current financials. But having a specific target changes everything. Now every decision can be measured against that goal.

Growing pains are real. In science, in IT, in business. You change something and it gets worse before it gets better. The trick is knowing whether “worse” is temporary or permanent. In Alex’s case, it is temporary. The question is whether he has the patience to wait it out.

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