Summary:
Jim and Jason walk you through Jason’s journey which started as a computer programmer at Arthur Anderson (Enron) through to his happenstance opening of digital marketing company. How he built it, sold it and then proceeded on his journey as an advisor.
Main Questions Asked:
- How did you go from Arthur Anderson to a digital marketing agency?
- You started your agency in what year?
- Did you starve for a while getting through the bust?
- What provoked you 11 years later to think about selling?
- What made you say this time, we will be interested in talking to you?
- Did the buyer come in and put a number on the table or did the company go through valuation later?
- How long from the Letter of Intent to the closing?
- How do you know they got the valuation right?
- What can you say that you might have done better through the process?
- Did you have an M&A advisor, lawyer, or broker?
- Would you have any advice on how to pick out an experience broker?
Key Points made:
- I opened a digital marketing agency and owned it for 12 years. (1:23)
- I made a website making fun of Insync and people liked it and asked me to make them websites, so I just kind of fell into it. (2:05)
- I started my agency in 1999. (2:21)
- I didn’t have any goals or vision or what we wanted to do or be until about year 5. (2:48)
- The bust took down a lot of bigger companies, so we could maneuver and pivot really quick and go after those nice sized account. (3:20)
- I didn’t even know what an invoice was and this was before Google. (3:35)
- Our business was positioned as a lifestyle business. (4:57)
- We always had suitors and we kept saying “no”. (5:10)
- We thought if we joined a bigger company that we could do better: (5:16)
- The number was very good but we had done it for 11 years and were ready for something else. (6:00)
- We had them do a letter of intent first. (6:20)
- If we like your letter of intent, we will talk to you. (6:40)
- It took about two months. (6:50)
- We had good systems in place, so when they asked for something I already had it. (7:14)
- A business is worth whatever someone will pay you for it and what you value it at. (7:51)
- People are looking for contracts, predictability, scale and those sorts of things when looking to buy a business. (8:23)
- We had an earn out. I lost millions in the earn out. (9:50)
- If your whole intent is to sell, know what people want. (11:45)
- I had a really bad M&A broker that didn’t provide me guidance. (12:28)
- You should have probably brokered a flat fee for your broker. (15:05)
- I advise marketing and digital agency owners. (15:42)
- I work less than 100 hours a month and show people how to do that. (16:01)
- If you can’t tell me your client’s biggest challenges, you haven’t gone far enough down. (17:15)
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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