Summary:
Rick takes you through his very smart choices in building and selling his business. There is so much good information in this podcast you can’t afford not to listen to it if you are thinking about selling your business.
Main Questions Asked:
- Were you thinking about an exit when you started your business?
- When did you really begin to get serious about selling, what was your catalyst?
- Did you reach out and retain an M&A advisor?
- Did you get an offer out of the blue or what did you do to get business sold?
- How long did it take you from retaining a broker to selling?
- Was it a smooth closing or were there a lot of peaks and valleys?
- Did the recession affect the timing or issues at all?
- What did you do right and what would you like to do over?
- Was your advisor group built of good friends?
Key Points made:
- My first business was an auto-detailing business in college. (:30)
- Avia is a large telephone equipment company. (2:00)
- I did not have an exit strategy, I was excited to have my own business. (3:00)
- About 10 years in, I started wondering what I would do next. (3:33)
- The industry went through significant changes and I could see the handwriting on the wall, so it was time to sell. (4:25)
- I put together a private board who guided me along the path of selling. (5:45)
- My board said I don’t want to sell with the financials I gave them. (7:00)
- The board said to stop investing and keep our money for maximum cash flow. (7:30)
- We cleaned up the books and made the company more profitable. That is when I hired a broker. (8:00)
- It took about a year to sell our business. (9:20)
- We thought about geography, customer base, product offers, and all that combined decided who to market to. (10:05)
- Once you do an LOI you know the price only goes down from there. (11:30)
- Seeking that outside advise was the best decision I made and then to follow their advice. (13:40)
- We did a lot of internal things to make sure the company could operate without me. (14:20)
- Only one of the three people that I had on my board did I know prior to inviting them to be on my board. (15:40)
- My operations guy was a nut for the numbers and everyone on my board had been there, don’t that. (16:40)
Resources Mentioned:
Business by Day – 5 minutes to a performance business
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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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