Summary:
Ray talks about buying his family business from his dad and how they structured their partnership agreement for good growth and possible exits. They also talk about how to structure your business to be able to most the most of it when you decide to sell.
Main Questions Asked:
- When you bought the company were you thinking about an exit.
- Did the multiplier ever change?
- Did you sell to someone in your partnership?
- How long did it take you from the time you decided to leave to being bought out?
- What led to your decision to sell?
- What advice do you give other people?
Key Points made:
- In our business, you always wanted to be in Florida, Texas, and California. (3:00)
- He didn’t want to grow the business because he didn’t want more problems. (4:00)
- We grew the company five-fold in 10 years. (4:50)
- Part of our partnership agreement was we came up with an exit strategy using a multiplier based on a valuation. (5:50)
- The value of the company increased, but we agreed on exit terms at the beginning and we never changed or negotiated it. (6:45)
- I sold out to my partners. (7:14)
- The agreement made things clean and succinct. (8:00)
- I would choose a partner that brings something to the table that I don’t bring. (11:55)
- I kind of had to give my life away to make the business grow. (15:25)
- I would decide on a number to walk away and when I met that number, I would up it again. (17:30
- It took a year and a half to two years to exit the business. It was an internal struggle for me. (18:10)
- A lot of people work in their business not on their business. (19:04)
- It is important for people to recognize what they are good at and not good at. (21:00)
- People step over dollars to pick up dimes. (21:05)
- You need to put the proper management teams in place. (21:45)
Resources Mentioned
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Tennessee Valley Group
Jim Cumbee established Tennessee Valley Group to help business owners fulfill their dreams for life after business ownership.
It’s a mission that his 30+ year career history had prepared him well for—in addition to being an attorney, transition mediator and business broker, Jim has been a buyer, seller, and entrepreneur. His broad range of experience gives him unique insight into how business buyers and sellers can achieve their goals.
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