The first book I ever read about entrepreneurship was The E-Myth by Michael Gerber.
I loved it.
Gerber’s knack for simplifying the complex art of starting and growing a company resonated with me immediately. Although I’ve never met Michael, I consider him to be one of my very first teachers.
I have not read his more recent books so when his publicist contacted me last week to see if I would interview Michael on Built to Sell Radio, I was keen to hear what he had been up to since The E-Myth.
In this interview, you’ll get a summary of his new book, Beyond The E-Myth including:
For the better part of 40 years, Michael Gerber has been encouraging business owners to work “on, not in” your business. That’s exactly what we do with owners that leverage The Value Builder System™. Each month, you’ll get focused time with one of our Certified Value Builders to help you build your company as if it were a product to sell. Get started by completing your Value Builder questionnaire.
Frank Cottle led an investor group to buy Hi-Mark Software for 10 times EBITDA. Cottle then sold a chunk for 15 times and ultimately sold his last tranche of equity for more than 16 times EBITDA to Lufthansa. In this interview, you’ll get deep inside the mind of a private equity buyer and learn:
Most of our Built to Sell Radio episodes have been success stories but this week’s show is a cautionary tale of what happens when you don’t plan ahead. It features Dan Bradbury, a young entrepreneur who was growing a successful business right up until the day he had a cycling accident and ended up in a coma.
Bradbury made a full recovery after seven months, but his business didn’t make out as well. It suffered in his absence, and instead of committing to build it back up upon his recovery, Bradbury decided to sell it, reasoning he needed to safeguard his family’s finances should anything bad happen again. After a long search, Bradbury found a buyer but the offer he received revealed his weakened negotiating position.You’ll hear Bradbury's cautionary tale along with:
Mark Stephenson and his partners grew their conference business, Media Edge Communications, to north of $10 million in annual revenue when they were approached by an acquirer. They agreed to a deal that was just shy of eight times EBITDA—85% of the deal was in cash with 15% in an earn-out. If Stephenson had the deal to do over again, he would change his earn-out structure to avoid leaving money on the table. You’ll learn about Stephenson’s earn-out mistake along with:
- The emotional impact of selling.
- How buyers try to grind you down during diligence (and how to counter).
- How to tell the difference between a time-kicker and a serious acquirer.
- How long it takes to negotiate the sale of a business.
Steve Huey bought The Learning House, a company that creates online courses on behalf of colleges, for $2.7MM in 2007 because he saw the opportunity to professionalize the sales and account management of the business. Five years later, Huey sold the business to Weld North, a private equity company for $27.5 MM earning his shareholders an 8 to 1 return.
In this episode, you’ll hear Huey’s advice on: