Why Most Businesses Are Built to Fail—And How to Fix Yours

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Many entrepreneurs don't start with a business plan—they start with a passion. That's how I began: not as some Ivy League graduate but as a graphic designer who found himself freelancing after a layoff. Over the years, my solo endeavor grew into something bigger. But like many small business owners, I never developed the processes that turn a business into a truly sellable asset.

In Michael Gerber's book The E-Myth Revisited, we meet Sarah, a pie shop owner whose story mirrors mine. Passionate about her craft but overwhelmed by the demands of running a business, Sarah embodies the challenge many of us face. Like her, I turned my freelance gigs into a career out of necessity. It wasn't long before I realized that without structure and processes, my business was more of a job than an asset.

As the business matured, we began implementing systems: formalized project management, repeatable onboarding processes, and a dedicated team. These changes made life easier and strengthened and improved the business. It's not just about working harder but smarter.

Now, don’t get me wrong, I’m 20 years in, and my business is still evolving. Processes are being improved and refined, and to be totally honest, some things are still a shit-show. However, the point is progress. If you don’t have things figured out today it’s OK. But if you take steps in the right direction, just a couple each day, eventually, you’ll get to where you want to be.

So let’s get to stepping!

This week's guest-pert, Thomas Smale, has helped myriad businesses transform from day jobs into valuable assets. Even if you never plan to sell, structuring your business like an asset can make it more efficient and profitable. Read on for actionable insights on turning chaos into structure and unlocking your business's full potential.

Meet This Week’s Guest-pert: M&A Expert Thomas Smale

Buying and selling businesses isn’t just for Wall Street dealmakers. Small business owners—especially those in tech, SaaS, and e-commerce—are making multi-million dollar exits right now, and Thomas Smale has helped over 1,200 of them do it.

Thomas is the founder and CEO of Fe International, a leading mergers and acquisitions advisory firm that has closed over $1 billion in business sales. He’s an expert in maximizing business value, preparing companies for acquisition, and navigating the complex world of deal-making.

In our conversation, Thomas breaks down:

• What makes a business truly sellable (hint: it’s not just revenue)
• How to structure your business so buyers want to acquire it
• The biggest mistakes entrepreneurs make before selling—and how to avoid them

If you’ve ever wondered how to build a business that could sell for life-changing money—even if you’re not planning to sell yet—this interview is a must-read.

How to Build, Scale, and Sell for Maximum Value

On Building a Sellable Business

“Regardless of what your mindset is, you should at least plan to sell at some stage and be in a position where you can.”

The insight: Even if you never plan to sell, structuring your business for an acquisition makes it stronger, more scalable, and more valuable.

“Fundamentally, you've got to be making money. Buyers care about revenue and, more so, profitability—especially when markets get challenging.”

The insight: A profitable business is almost always sellable. Focus on strong financials to maximize valuation.

“The next thing is removing the reliance on yourself or other business owners.”

The insight: If your business only functions because of you, it’s not an asset—it’s a job. Build systems that allow it to operate without you. (This one stings me personally a little bit! Ouch!)

On Scaling & Hiring

“The first hire is the most difficult because you’re committing to that person. You can no longer make selfish decisions in your business.”

The insight: The shift from solo operator to business owner starts with that first employee. It forces you to think beyond yourself.

“Once you figure out how to do something, generally speaking, you can apply that to a bigger and bigger version of that same thing.”

The insight: Scaling isn’t about reinventing the wheel—it’s about refining and repeating what already works

“People rarely quit companies they don’t like. They quit managers they don’t like.”

The insight: Strong leadership is crucial for retaining talent as your business grows.

On the Acquisition Process

“Almost any business is sellable—the question is whether or not you get a good valuation.”

The insight: The key to getting top dollar? A well-documented, profitable, and systematized business.

“You can’t buy reputation. You could take out every billboard in every major city, but that still won’t replace a strong referral network.”

The insight: Word-of-mouth and credibility are long-term assets that drive business value.

“Many sellers make the mistake of changing their business based on feedback from a single buyer. Never pivot for one potential acquirer—grow your business for the broader market.”

The insight: Don’t let a single conversation dictate your strategy. Build a valuable business, and the right buyer will find you.

Own your business; don’t get owned by it.

If there’s one takeaway from this conversation, it’s that a business should be built to thrive, not just to survive. Whether you plan to sell one day or simply want a more efficient, scalable operation, the key is creating systems that make your business run independently of you. The best companies—those that attract buyers and command top dollar—aren’t just profitable; they’re structured, streamlined, and built to last.

Thomas’s experience proves that exit planning isn’t just about selling—it’s about building value. A business that can function without its founder isn’t just sellable—it’s sustainable, resilient, and positioned for long-term success. So, ask yourself: is your business something you own or something that owns you? The answer could shape your future.

Thanks for reading. –R

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Ready for more?

Catch Thomas Smale’s interview in its entirety on Eggs! The Podcast.

Don’t miss a show! Subscribe on Spotify, Apple Podcasts, or really anywhere great podcasts are found.

Path Picks

Cool stuff to help you forge your path to greatness.

Note: The Path Weekly is reader-supported. As such, I may be using affiliate links below. If you want to support the newsletter at no additional cost to you, please consider using the links below. If you’d rather not, most items below are widely available anywhere you want to shop. Thanks! –R

Reading list

Want to learn more about developing and applying grit and resilience? Here are some great books that will help you forge your path.

• The E-Myth Revisited – by Michael E. Gerber
• Built to Sell – by John Warrillow
• The Art of Selling Your Business – by John Warrillow
• Buy Then Build – by Walker Deibel
• The Lean Startup – by Eric Ries
• Fe International Valuation Tool – Want to know what your business is worth? Get a free valuation from one of the most trusted M&A firms in the game

More to explore

Thomas Smale on X: https://x.com/thomassmale

Thomas Smale’s M&A Consultancy Fe International: https://feinternational.com

Work with me

R2 - Creative Services for Agencies and SMBs:

https://www.r2mg.com/

Eggs! The Podcast:

https://www.eggscast.com/

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