the podcast recap episode with aj & rory vaden

Ep 99: Seven Principles To Make Your Company Irresistible with Jim Cumbee | Recap Episode

Welcome back to another recap episode! In our previous interview with Jim Cumbee, experienced business intermediary and President of Tennessee Valley Group, we spoke to him about making your business irresistible to buyers. He shared with us how a business is quantitatively valued using a metric called EBITDA, how you can increase your company’s value, and why strong businesses don’t always sell. In this recap, we go ov

er our favorite takeaways from that interview, including building a business that operates without you, the dichotomy between selling a great business and wanting to keep it, recurring revenue, and applying these thought processes to purchasing rather than selling, as well as just having fun and making some money along the way, and the value of having an extensive contact base. Tune in today!

Listen to the episode below:

Key takeaways from this episode:

  • Boiling the interview down to one takeaway – build a business that operates without you.
  • The dichotomy is if it’s a business worth selling, then it is also a business worth keeping.
  • Every founder struggles with building both a personal brand and a business brand.
  • Recurring businesses are more likely to sell and sell for more because they are less risky.
  • If it is less risky for someone else, it is also likely less risky for you as the business owner.
  • You don’t have to sell your company for a ton of money to be successful, you can have fun and make some money along the way.
  • It’s not just about selling your business, but also the thought process you go through to purchase or acquire another business.
  • Sometimes, it’s not the product or the services that you’re buying, it is just the contact base.

Tweetable Moments:

“Typically, recurring businesses will sell for more and are more likely to sell because they are less risky.” — @aj_vaden [0:05:28]

“You don’t have to be the person who does an IPO, or sells their company for a ton of money so you could fly a private jet to be successful. It pays your bills, you have fun, it makes a difference, and you make some money along the way. What a great thing to aspire to, to build.” — @roryvaden [0:06:52]

“Don’t discount the power of contacts.” — @aj_vaden [0:08:39]

About Jim Cumbee

Jim Cumbee is widely recognized as one of the most effective business transition specialists in the Southeast. He has over twenty-five years experience handling scores of transactions valued in the hundreds of millions of dollars. Jim is respected thought leader, the author of Home Run, a Pros Guide to Selling a Business, and the recently penned and widely-read white paper, Selling a Business in a Post-Corona World.

Jim is a former Assistant Attorney General in the state of Missouri, and has an MBA from Harvard Business School. He is a Tennessee Supreme Court Rule 31 approved general civil mediator. Jim is on the board of governors of M&A Source, an international merger and acquisition trade association, and a founding member of the Nashville chapter of the Exit Planning Institute, and the Nashville chapter of the Private Directors Association.

Links Mentioned:

RV: (00:07) Welcome to this special recap edition of the influential personal brand podcast. We’re breaking down the interview episode with our good friend Jim Cumbee, and this was a different interview for us. AJV: (00:19) Yeah, it was awesome. And Jim is just such a wealth of knowledge, truly one of the smartest people we know truly. RV: (00:25) Absolutely. And I, I think you know, if I had to boil the whole interview down to, you know, one big takeaway for me, which would be the thing that I’ve always learned from Jim was that it’s really simple, like as an entrepreneur, whether you’re a personal brand or you’re building any real business, the ultimate objective is to build a business that operates without you. And that is AJV: (00:49) Also, it’s kind of interesting because I think it’s such a dichotomy of, if it’s a business worth selling, then it’s also a business worth keeping. And if you can keep a business without it needing you, why would you ever sell it? RV: (01:03) Yeah. I mean, that’s how valuation basically works. Right. And, and you know, by the way, I just want to make a shameless plug that if you loved that conversation and the topics of that conversation, you should come to our event, that’s called eight figure entrepreneur. Cause it’s the whole event is about that kind of thing. Buying you’re evaluating your, your company. But so yeah. What was, what were some of your big takeaways? AJV: (01:24) Yeah, so I think this is for everyone. If I think for a lot of you listening, you have a personal brand, but then you also have another company, right. A personal brand and everything you do within that courses and speaking, and coaching and consulting they also lead into something else that you may do. And this is both for those, with a personal brand and those without a personal brand. But I think one of the, it’s kind of to what you said, one of the big questions you have to ask yourself is can the business continue without me? And I think that’s just a great question, a great gut check for those of you who are going like, can my business continue without me? And if the answer is no, it’s probably not very sellable. RV: (02:07) Yeah. And I think so what was interesting for me as a personal brand and someone who thinks in that framework. So that was a takeaway, which is something that I always get when I talk to Jim. And then I think my second kind of big takeaway was I’ve always kind of thought, okay, well, if you’re a personal brand, like if your business is built around a personal brand, this is a struggle that is really unique to you. Like, because you’re the personality and you’re the face or whatever. And then Jim said, every founder struggles with this problem. And so it’s not actually a problem that is specific to personal brands. It’s specific to every small business, which is that if you take out the owner or the founder or the original person, like my whole thing starts to break down. Yeah. And so that was enlightening in a weird way to go, Oh, well, it’s not just, it’s not just us and our clients, you know, that our personal brand people. So AJV: (03:04) Yeah. Just can the business continue without you. Right. And I think that that’s for any business, not my second one was around this concept of recurring revenue and just the simple fact that, you know, we talk a lot about this at brain builders group and an acronym that we call dayers, which is how, how many of these can you check, right? Can you make your business digital, automated, recurring, evergreen, and scare scalable, right. And this is all about this recurring component, which is just by the pure fact of how businesses are sold and purchased that I recurring business well, typically sell for more because it’s less risky. And I think that’s just a great for all of you who are trying to figure out your business model, like, do I do a course or do I do a membership program where they pay monthly? And then you’ve got to ask yourself, do I think I would ever sell this one day? And I think having that longterm perspective will help you make those short term decisions of going typically recurring businesses will sell for more and are more likely to sell because they are less risky thing. That was just a great aha and good takeaway for anyone who thinks maybe one day I’d like to sell this. RV: (04:17) Yeah. And I, I would say on the note of the recurring revenue, if it’s less risky to someone else, it’s probably also less risky to you, right? So there’s some real value to that recurring revenue model. At the same time, you got to sort of ask yourself, all right, do you do, I think people would only stay, let’s say it’s a hundred bucks a month. If they’re only going to stay three months on average, it’s like, well, if I sold it as a thousand dollar course, I might be able to get a thousand dollars versus, you know, a hundred a month for three months. And those are all the kinds of questions you gotta answer. And it’s not like there’s a right answer. There’s only a right answer for you. There’s a right answer for you. AJV: (04:54) Well, it’s also leveraging that question with a question of, do I want to sell, or do I want to keep this as a lifestyle business? Because I think those are also two very, very important. RV: (05:03) And that was my third takeaway, which was, you don’t have to build the company to sell it. Right? Like you, you could just build it to operate. Exactly. Like you said, is, is a business worth selling looks a whole lot, like a business worth keeping. If you can get that thing running on autopilot and it’s fun and it’s not burning you out, you know, hate it. You know that it’s like, why say why? At least on most days, why would you sell it? Why, why not do it? And I think that was super powerful. It’s like, you don’t have to be the person who does an IPO or like sells your company for a ton of money. You can fly a private jet to be successful. It’s like it pays your bills. You have fun. You make a difference. And you make some money along the way. What, what a great thing to aspire to? AJV: (05:52) Yup. My third one was not, that was completely office it, which is, I think this was a great aha for again, to me, I don’t, I have never built our business in the mode of one day. We’ll sell it. Right? So some of this is just like really great, more for purchasing and acquisition, not for selling. And I think that’s something too, for all of you who are listening, it’s not just whatever, sell my business, but what is a thought process that I would, would want to go through if I was to purchase or acquire someone else’s business. And that was how I process interview because I don’t ever foresee selling this business, but I do foresee potentially growing it, expanding it through acquisitions and mergers and buying other businesses. So you can also filter this through that lens. And one of the things that caught my eye as I was watching this and listening to it was this whole concept of now, not that you would tell somebody this per se on the, on the buyer side, but sometimes it’s not the product or the services that you’re buying. AJV: (06:53) It’s just the contact base. And if you have, so some of you are going okay, well, I don’t like what program or subscription or course would I ever have. That would be worth selling. That’s not it for all of you. Some of you it’s because you’re going to build an enormous list that somebody else will want access to. And that has to do with an enormous list that has a proven track record of success. And people will be likely to buy that for the same reason as they would your recurring business model or anything else. So I think that was just a, Hey don’t discount. The power of just contacts, right? Instagram back in the day, sold for a billion dollars to Facebook before $1 of revenue was generated. They were buying access to contacts. You can do the same thing. RV: (07:44) Love that. Yeah. I mean, it’s like these days, instead of buying a real estate building, you might just be buying a database of emails and contacts. So listen to the interview. It’s not everyday. You get to talk to a Harvard MBA about buying and selling companies. Go check it out. Stay encouraged, stay focused. We’re playing the long game, always at brand builders group. And we’re happy to be alongside of you. Thanks for being here. We’ll catch you next time. [inaudible].

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