This week on Life After Business we have the benefit of an appearance from an absolute master, Sam Thompson. This man built up his business, hired the right partners and then sold to them at a price that everybody was happy with. He sold at the perfect time… with time left to spare. It took him seven years of careful planning, but Sam is an example of just how much can be gained by thinking about your exit at the earliest opportunity. He even took heed of the advice from one of our previous guests on the LAB podcast, John Warrillow.
Sam combined his exit planning with a rock-solid strategy for his next career and basically achieved the ultimate life after business.
The first partner came on board four years after he started.
Sam openly courted partners because he knew he needed them to grow the business. They were all incentivised with bonus shares which proved to be a very effective strategy.
Approximately $5m for a number of years, then post 9-11 they had to radically change the business model to be less dependant on people flying in. They bought a warehouse and focussed on teambuilding for local businesses.
There wasn’t one event. He thought about exiting casually, went to seminars, and bought the book Built-to-Sell by John Warrillow. There was agreement among the partners that they needed to do something.
He empowered his team of employees to have more responsibility by promoting a number of people, and thus safeguarded the value of the business without him.
It was tough, but worth it.
Seven years in total.
He did some research, went to a convention and eventually became certified to be a business intermediary.
When Sam wanted to sell, the other partners didn’t, so the only way he could exit would be for the partners to buy his share. They arrived at a figure by using the average of an accountant’s valuation and a less conservative valuation from a business broker.
The main stumbling block was how much Sam would be missed, but because of the increased responsibility that Sam had given other members of the business, this was eventually overcome.
Originally there was an SBA loan along with a promissory note of 10%. Basically he got a loan from a bank that was financed using the company cash flow and a personal guarantee on a stream of payments of a certain period of time.
Probably, but the exit option he chose felt better for him and everyone overall.
He stayed on for a year first but then said to the partners after six months that it was time to stop – they didn’t need him. All of the key employees stayed on after the sale and the business continued to be successful.
The transaction went well but maybe he should have used an exit planner.
“You want a business attorney when selling a business. They know how to get these deals done.””
“You want a business attorney when selling a business. They know how to get these deals done.”
“There’s a lot of good businesses out there but they hit a brick wall & they’re ready to move on.”
“There’s a lot of good businesses out there and there’s nothing wrong with them – they’re like me, they hit a brick wall and they’re ready to move on and do something different.”
“Make sure when you’re ready to sell that you’re making money”
“Make sure when you’re ready to sell that you’re making money. Sometimes owners don’t realize that… they’re doing everything they can at the end of the year not to take a tax hit. But when you’re ready to go, you need three good years.”
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Sam Thompson is founder of metroConnections, a Minneapolis based event and conference planning company that has been in business for over 32 years. In 2012 Sam sold his shares of metroConnections to his three partners and began his next career as a business intermediary helping business owners sell their businesses. Sam is past president of the Association of Destination Management Executives International (ADMEI) and has received the Lifetime Achievement Award from both ADMEI and Meet Minneapolis (Minneapolis Visitors Bureau). Sam is certified with the International Business Brokers Association and is very active with the Edina Rotary Club. Sam has a BS degree from the University of Wisconsin- Stout in Hospitality Management. Sam lives in downtown Minneapolis and had 3 daughters ages 23 and 19 (identical twins).
Today’s guests are Alexander McCobin (CEO of Conscious Capitalism) and Dan Golden (owner of BFO). We’re talking about “Conscious Capitalism”, a book and movement that I’ve mentioned a lot on the show. Alexander, Dan, and I talk about what got us into the movement, the fundamentals of the movement, how capitalism and “doing good” can overlap, and how to make these conscious decisions. What you will learn: Alexander’s background Dan’s background What is the “Conscious Capitalism” movement? The four principles of conscious capitalism How to improve the value of your company Short-term versus long-term decisions Tangible examples of conscious decisions by companies, which create value for people How Conscious Capitalism helps businesses make changes The future vision for conscious capitalism Takeaway: How can you do good and make money at the same time? Find out how conscious capitalism helps you with your exit strategy, avoid burnout, and find out how to grow yourself and your company in a way that fulfills you. Links and Resources: Conscious Capitalism, the website Conscious Capitalism, the book BFO Alexander McCobin Dan Golden The Conscious Capitalism 2019 CEO Summit ARKONA Boot Camp Reach out to me if you have questions about the boot camp! About Alexander and Dan Alexander McCobin is CEO of Conscious Capitalism, Inc., dedicated to elevating humanity by improving the practice and perception of business. Capitalism is fundamentally a human endeavor, ...
“Take your customers through a journey by telling a story” is a phrase we have all heard before, but have you ever learned how to actually put storytelling into action that generates the results you want in your business?On today’s show, David Mann — who is a leading expert in creating simple messaging — shares with us how to master your sales and marketing by turning your IDEAS into WORDS that inspire ACTION.David believes in opening opportunities — and therefore growing the value of your business — by closing communication gaps. When David graduated from Northwestern University's theater program more than three decades ago, he has earned an enduring reputation as a dynamic theater artist, author, educator, speaker, and the creator of storytelling programs for lawyers and business leaders.David’s philosophy:If it's clear, they'll understand. If they understand, they'll care. If they care, they'll take action. What You Will Learn How much time you actually have to capture someone's attention, no matter their level of interest How one person shows force you to grab - and keep - an audience's attention, and how that helps David create stories for businesses and lawyers How to tie your marketing and messaging to your products and services and ultimately to the EBITDA and value of your business The role practice, revision, and truth-seeking play in creating your business message and how that imitates art Why it’s so important to talk to your customers and understand what they ...
David Lekach is an entrepreneur from Miami, Florida and he got the entrepreneurial itch in the early 2000s when he was working as an investment banker in NYC and couldn’t fall asleep. To solve his own problem, David founded Dream Water - water-shot that is best described as the opposite of a five hour energy - and managed to get his products into big box stores like Duane Reed, Walmart, CVS, Publix and Safeway. After 8 years of being the owner and operator of DreamWater, David sold the company to One Harvest, a Canadian cannabis company for $34.5 Million in 2018. In this part one of our two part series, David talks about how he grew the company and his mindset along the way. In part two, we talk about what triggered him to sell the business. We dive into the nitty gritty of all the details of the process and how he structured the sale. What You Will Learn David’s thoughts on whether you are born an entrepreneur or whether you choose to be one Why David founded Dream Water and what it meant to him personally How understanding what “business you are really in” is crucial to scaling a company Why David did not invest heavily into manufacturing - even though his business was a product - and how that impacted his grow strategy How the impact on the world you are having with the business can be the thing that keeps you going even when things are hard How David got into some of the biggest box retail shops like WalMart, CVS and Duane Reed David’s thoughts on the importance of stopping to celebrate the wins Why David prioritized data management from day one and ...