Professor Bentley (not his real name) was one of the most revered yet feared professors at Harvard Business School. Every time he entered the classroom, you knew you were in the presence of genius. But with one question, he could make you look or feel like the village dunce. I didn't learn the principle of supply and demand at Harvard, I knew that a long time before I got there. However, in the rigorous case study Read More
Are You Guilty of The Wimpy Effect?
“I’ll gladly pay you Tuesday for a hamburger today.” If you are 60 or older, you probably recognize that comment frequently spoken by J. Wellington Wimpy. This character from the Popeye cartoon series seemed to be a successful businessman (after all, he wore a suit and tie). But curiously, Wimpy never had money in his pocket to buy his favorite lunch. He seemed to always be saying “you can trust me, I’ll have it in Read More
Earn Your Way to a Better Exit
When Mayor Johnson (not his real name or title) asked me to meet, I assumed he wanted me to sponsor a table at his next fundraiser. He ushered me into his office, and after looking at pictures on the wall of him with nationally prominent politicians, he got to the point. “I’m not here to talk politics, Jim, I want to talk about selling my business. I know you can help me.” Mayor Johnson has lived in his community Read More
The A of Valuation ABCs
It’s no fun telling a songwriter his song is bad. Telling an author her novel won't sell takes nerves of steel. Telling a business owner his business is overvalued is no way to make a friend, much less gain a client. Marvin (not his real name) was flat P-O’ed at me. When I told him how a buyer would look at his business, he told me in no uncertain terms he was not going to hire me because I didn’t know the market Read More
The Danger of an LOI
“Let's have a celebration dinner, I want to thank the team for getting us here.” Hugh (not his real name) was rightfully excited. He had just signed a Letter of Intent (LOI) to sell his company for enough cash to take care of his children's children. But I put a stop to the idea of celebrating too soon. I said, “Hugh, signing the LOI is great, and I know it’s taken you a long time to get to this point, but the next Read More
Why It Can Be Hard to Find the Right Business to Buy
Randy (not his real name) had been trying to buy a business in the Nashville area since early 2015. A few weeks ago, he called to ask if he could retain me to assist his search effort. Though he had met with about 10 business owners over the past two years, Randy had nothing to show for it. He was ready to be more professional and intentional about his search process. Randy was not a neophyte. He had run his Read More
How Can You Know Your Company’s Value?
“Cumbee, you don’t know what the heck you’re talking about, my company is worth way more than you're telling me.” Mike (not his real name) was about to tell me what to do with the valuation I prepared for his company, and he used a word other than heck. I could appreciate his frustration. Starting his company during the ‘08-’09 recession, Mike had done everything right to build his business to $9 million a year. He Read More
Think Outside the K-Cup, Three Business Principles I Learned While Comparing Starbucks Via with Starbucks K-Cups
I discovered Starbucks in 1994 when a group of Disney executives held a meeting at the Whistler Blackcomb ski resort in western Canada. One morning our Canadian hosts took us to a charming coffee shop in the village and one guy ordered this thing called a “latte.” I had no idea what that was, I assumed it was a special local favorite. I ordered coffee, black, large. Whoa, one sip and my boring Maxwell House life was Read More
