Not Your Typical Exit Strategy: Stephanie Gordon Shares How She Sold Her Property Management Business

As the owner of a property management company, have you thought of your own exit strategy yet? Whether you’ve already chosen your path, or you’re still unsure about the best option, it’s worth listening to how Stephanie Gordon did it.

If you don’t know Stephanie Gordon yet, you should. She is the founder and CEO of Gordon Property Management in San Francisco, and she has been a successful business owner and thought leader in the property management industry for decades. In July of 2018, she sold a large part of her company to a trusted team member.

Stephanie joined us on The Property Management Show to talk about how she came to that decision, what the deal looks like, and why she didn’t pick a different exit strategy.

A Different Property Management Exit Strategy

The decision to do this began taking form a few years ago, when Stephanie started to feel burned out. Her company has grown a lot over the years and she knew it was time to start thinking about an exit strategy when she noticed a shift in her attitude. She had always cared about her customers and their properties, but suddenly she didn’t feel excited about adding new doors to her book of business. Things felt different, and she knew something had to change.

After 32 years of operating a property management business, her burnout is understandable.

As a starting point, Stephanie sat down with all of her financials and analyzed the value of her company. She realized she could squeeze through an early retirement if she really wanted to, but she didn’t want to give up the lifestyle that she loved. So, she reluctantly decided to keep running the company and managed to get out of the funk she was in.

Months later, as Stephanie was taking a walk near her Sonoma home, she had a bit of an “aha” moment where she realized the perfect solution: sell part of the business rather than the whole business!

It was a simple exit strategy that would allow her to continue earning income while easing into a better retirement. So, she spoke to a trusted team member if she was interested in buying half of the company. This person’s name was Meghan.

Meghan Guerin has been working with Stephanie for more than 15 years. She knows the company, she knows the business, and she is great leader in the organization. Stephanie always told her in passing that she’d sell her the company when she was ready. This worked for everyone because it kept Meghan at Gordon Property Management and gave her a pretty substantial goal to work towards. It also provided Stephanie with an alternative exit strategy if her children didn’t want to over the business. Selling Gordon Property Management to a stranger was completely out of the question for her.

The opportunity to buy half of the company was great news to Meghan because she would continue to have Stephanie’s support as they transitioned into co-owners and partners.

So, last summer the deal was closed: Stephanie owns 51 percent of Gordon Property Management, and Megan owns 49 percent of Gordon Property Management.

What That One Percent Means: Owning 51 Percent versus 50 Percent of a Company

Every expert Stephanie talked to advised against a straight 50/50 split. If there’s a disagreement, Stephanie has the final say and the majority control. That’s important to her since she’s not ready to give up the business entirely. No one anticipates a situation where Stephanie has to outvote Megan, but if the unthinkable happens – she is prepared and protected.

Getting to the Deal: The People and Concepts that Helped

When Stephanie met Greg Crabtree, the author of Simple Numbers, a few years ago at a retreat hosted by PM Grow in Puerta Vallarta,