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The Kevin Harrington Way to Structure the Sale of Your Business

November 27, 2020 |  

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Mark Timm built Cottage Garden, a company selling decorative music boxes, to $8 million in revenue and around $1 million in EBITDA when he decided to sell it.

Timm sold the business for around 4.5 times EBITDA. He got half of his cash up front, with the other half paid over a five-year earn-out. Timm not only stayed for his earn-out, but when the acquirer decided to move the offices of Cottage Garden, Timm agreed to repurchase the business, only to sell it two years later, for a second time.

Selling the same business twice gave Timm a do-ever, and he took what he learned from the first sale and used it to maximize the return for all of his shareholders.

This interview is jam-packed with wisdom, including:

  • What Timm learned about structuring deals from Shark Tank’s Kevin Harrington (the co-author of Timm’s book, Mentor to Millions).
  • How guaranteeing your EBITDA can help you structure a deal.
  • Why a guarantee should come with the removal of a cap on your earn-out.
  • Why you need both an M&A attorney and an HR lawyer when you sell.
  • The downside of selling your assets vs. shares.
  • The importance of selling earlier than feels natural.
  • The difference between a good deal and a fair deal.

During the interview, Timm shares his philosophy for creating a fair deal for both sides, which inevitably means being open to receiving some of your proceeds based on your company’s future performance in the hands of a seller. The more options you’re willing to consider, the more likely you will receive an offer. More offers mean more leverage, which in turn means you’ll likely have a better shot at dictating the ones you want. In an ironic twist, the more flexible you appear to acquirers, the better the chances you’ll be able to dictate your terms. Find out about the five ways you can structure a deal to sell your business by completing your PREScore™ questionnaire now

About Our Guest

Mark Timm has been a serial entrepreneur and exponential-thinking practitioner for almost three decades. He has started more than a dozen companies, several of which have multiplied and been sold. He has spoken professionally for more than 25 years, giving thousands of speeches to millions of people around the globe.

Mark’s greatest value comes from being a master collaborator who brings people together to accomplish far more than anyone imagined. His strategic vision enables him to see future possibilities and strategically position assets and systems to take full advantage of what’s next.

Today, Mark believes his most important role is CEO of the most valuable business in the world: his family of six young adults with his wife, Ann. His own experience of dealing with entrepreneurial challenges fueled his passion for helping people balance the demands of family life and business. www.marktimm.com

Watch the interview

Want to increase the value of your business by up to 71%?

Take the 13-minute survey and get your Value Builder Score

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Transcript

John Warrillow:

So, once a year, you go to the doctor. They take your blood pressure, maybe they prick your finger, and they take a little blood, and they give you a sense of your cholesterol level. Maybe if you go to one of those fancy health care facilities, they get you to run on a treadmill for a while, see how your heart’s doing. You get a checkup.

John Warrillow:

The same thing should be true of your business. When we look at your business through the Value Builder Score, we’re going to look at it through eight key drivers that acquires care about whether you want to sell your business immediately or in 10, 20 years from now. These are the eight factors that business buyers care about. Knowing them now will help you maximize the value of your business going forward. Just go to valuebuilder.com and take the questionnaire.

John Warrillow:

So, when you sell your company, when do you want to get paid? My guess is the day you hand them the keys, you’re looking for a check in return, which is a legitimate desire. But unfortunately, not usually the end of the story. In fact, in most cases, for small companies, when you sell, you’re going to get some of your money up front and then some in the form of future payments, whether that’s a future payment on a vendor take back or some sort of earnout scheme. There’s going to be some money in the future. And while I think everybody wants 100% of their money up front, many times there’s got to be some transition.

John Warrillow:

And my next guest is a guy named Mark Timm. And he has sold the same business twice, as he will describe in this episode. He sold it, bought it back and then sold it again and had the opportunity to go through the sale of the same business twice. And so, from that he learned lots. And one of the things he learned was the importance of what he describes as the difference between a good deal for you as the entrepreneur and a fair deal for both parties.

John Warrillow:

Here to describe the difference and what you should strive for as an entrepreneur is Mark Timm. Mark Timm, welcome to Built to Sell Radio.

Mark Timm:

Hey, I am so excited to be here, man, just looking forward to sharing and pulling back some curtains.

John Warrillow:

Awesome. Well, let’s get into it. I know you’ve had seven exits. So, it’s hard to pick. It’s like a Chinese menu trying to pick out what you’re going to have. But we decided to focus in on Cottage Garden, because I think there’s a really neat story there. So, let’s get into it. What is Cottage Garden?

Mark Timm:

Yeah, so Cottage Garden is, it’s a company that was started right out of my garage. And it’s one of those true entrepreneurial stories where I’m working for USA Today, have an idea for a business. We started out of the garage, literally having to apologize to the neighbors for the UPS truck pulling up. And then one day a semi pulls up to our house. And that was kind of the tipping point. At that point, we had to start passing product out to all of our neighbors or we were in trouble. But we finally did graduate to a real warehouse. And the next thing you know, we doubled business every single year for five years.

John Warrillow:

Hold on, explain to people before we get too far in the story, what does Cottage Garden sell?

Mark Timm:

Well, and so, that’s actually where I was going. And I like to tell the preface of kind of what we did because then I circle back and say, in the beginning, we literally sold photo frames. And what we figured out is that we were retailers first. And so, what we figured out is that people needed to take the risk out of retail. So, they didn’t really care what you sold. They cared about the risks they took. A retailer takes risk in every purchase they make. If they don’t sell the product, their entire profit is their ability to get rid of bad decisions.

Mark Timm:

And so, our product in the beginning wasn’t that great, man. I got to be honest with you. It’s not something that I was really that proud of. But our business model was extraordinary. And being retailers, we said, “Look, people are shipping slow. They don’t take any of the risk. And so, let’s start a company and let’s ship everything within 24 hours. Let’s guarantee the sale of the product. And let’s be the kind of partner to a retailer that they need.” And guess what, that’s all that was necessary. And so, we literally had more business than we could handle on the philosophy of how we did business.

Mark Timm:

Now, at a certain point, we had to actually get a really good product. And so, I’m literally standing there in China with my photo frame. And I’m looking at a box and I’m saying, “If you could put that photo frame on top of that box and make it a music box, I think it would be something.” And I literally created a music box out of our photo frame. And next thing you know, the following year, we started selling a million music boxes a year and we became the largest musical gift company in North America selling our product not just in North America, but on every continent in the world, all from that one idea of that crazy photo frame became a music box.

Mark Timm:

And why was it so successful? Because it allowed people to buy a music box and turn it into anything they wanted. You give a music box to a mom that says, “Mom, you’re the greatest,” it’s a great gift. But when mom takes that lid and puts a photo of her kids, it’s an heirloom that the children will be fighting over 30 years from now. And that would be-

John Warrillow:

Okay. So, music boxes if I’m remembering these, you open the lid and out comes like a ballerina kind of thing. Am I getting that right?

Mark Timm:

There are music boxes like that, and we ultimately got into there, but these are the heirloom, traditional wooden, you open it and it’s a Sankyo mechanical music playing on a drum, and so it’s got this all instrumental music, and we would play songs like Wind Beneath My Wings, and You Light Up My Life and Amazing Grace and really traditional.

Mark Timm:

And so, you say to yourself, wait a minute, can you really sell that many music boxes? Well, fast forward, and I know, we’ll get into the mechanics for the sale, but the company who bought my company, is I just had lunch with them the other day, and they’re still selling $8 million worth of music boxes a year. Okay. And this is now, I guess we started it … So, this is 15 years later.

Mark Timm:

So, sometimes the riches are in the niches. So, if you’ve got a niche business, sometimes that can be more valuable than something that’s really broad because what happens is, you can’t go to a traditional store and find a music box right now. They just don’t exist. But it doesn’t mean there’s not demand for music boxes, it means the demand shifted to online. And so, that’s where people find music boxes at right now is online. So, the demand is there, but you just can’t find them in retail.

John Warrillow:

So, in the beginning, so you had them made in China and then shipped over and then you sold them to retailers. Is that right?

Mark Timm:

Yeah, we sold them to retailers. At the at the beginning of my sale of the company, we online really hadn’t taken place. Because the real precipice … What happened was, is that we were chosen. We applied for some awards and we got outstanding company awards in our local community. We ended up winning Small Business of the Year in Indiana, and we competed on the national level. And we became the number two small business in America in 2007.

Mark Timm:

And that’s what got us a lot of attention and why we decided that maybe we had something that we should sell. Now remember, it wasn’t because we had this incredible product. We were chosen out of much larger companies because of our philosophy. And our philosophy was at Cottage Garden, we take the risk out of retail, because retail is too risky already.

Mark Timm:

And so, if you bought our music boxes, we would guarantee the sale of them until they left your shelf. And we could do that because we would just trade out the face paper. If mom wasn’t selling, we gave you a daughter face paper. If daughter wasn’t selling, we gave you a friend face paper. So, we could stand behind it, guarantee the sale. And so, it was really our philosophy that built the company.

Mark Timm:

And it turned out, we ended up with a pretty cool product as well. And that’s what really took us from that 2 to 3 million level up to the eight plus million dollar level was the music box component.

John Warrillow:

And that’s where you were in 2009 when you wanted to sell? Where were you at revenue wise?

Mark Timm:

Yeah. So, we received this award and we start getting a lot of attention. And I’m one of those people that believe that most people decide to sell their business when they’ve gone over the curve, meaning grow, grow, grow, grow, grow. Now, it plateaus, oh, I want to sell my business. But buyers want to … In my experience, I found that a buyer is interested in buying into the growth, not after the growth has occurred just based on some previous experience that I had in selling other businesses where I’d sold a business that had peaked over the curve.

Mark Timm:

I sold a business that was going into the curve. And I believe that if we were going to get maximum EBITDA return on this business we needed to sell as it was growing. So therefore, we had to get the company … So, it’s like we got the awards in 2007. We then spent 2008 getting the company ready to be sold because it takes a little time to make sure you’ve got everything where it needs to be. And then obviously, we started soliciting buyers for the business and completed the transaction.

John Warrillow:

And so, give me the numbers in ’09. So, eight million on the top line, what are you putting out of the bottom line in that time?

Mark Timm:

Yeah, putting your bottom line a million dollars.

John Warrillow:

Got it. And so, what did you think it was worth? Did you have any sense of a multiple of EBITDA?

Mark Timm:

I mean, we did the homework. We spent some money on this. We hired a consultant to really help us make sure we were doing it right. Retail or wholesale, basically, on the low end was two times EBITDA. And on the high end was five times EBITDA. And so, we didn’t feel that we were on the low end, for sure. And we also were realistic that we probably weren’t going to get on the highest end.

Mark Timm:

And so, we wanted to be on the higher end, obviously, of that. And so, being a wholesaler, we were put into the same classification as a retailer because that’s who we sold to. And that was the EBITDA range that businesses were going for. So, we basically said, “What do we need to do to position ourselves to be on the high end?” Well, not surprisingly, the early people interested in the business were interested in the low end of the EBITDA range instead of the high end. And we knew that we had a growing company. And so, how did we position to get the higher end because we ended up in the 4.5. So, we didn’t get the highest, but we got darn near the highest.

Mark Timm:

And I did something very unique. And that was we were apart by almost a whole point of what we needed to be. And I knew that the buyer was the right buyer, but I knew that we were pretty far apart. So, what I did is I guaranteed the buyer that I would deliver the EBITDA results of the company for the first two years, or I would make up the difference out of my own earn-out.

Mark Timm:

And so, what that meant was that they took some risk off the table, so that if I was wrong, then the company didn’t deliver the results that were currently being delivered, then they got some consideration back for that in the first two years. Now, the earn-out was over five years. So, as far as I was concerned, the risk was two years over a five-year period. But for them, they felt that if something was going to go wrong, if I misrepresented the business, it was going to happen early, not later. And they had more influence on the business later, so, they would control that number a little bit more than I would versus in the beginning, I would control it.

Mark Timm:

Now, knowing that I was in a growing business, that’s when obviously, I’m sitting here in a growing category, and so, I felt pretty confident, but something happened. Okay, you have to understand if you go back into the timing, and that was shortly after the close of our deal, Lehman Brothers, it was right in the timeframe of the financial crisis meltdown.

John Warrillow:

Oh right. It’s 2009.

Mark Timm:

Yeah, so right in that timeframe is when all of this is going down. And so, it did make for a little bit of a challenge, but this is where our philosophy kicked in. So, retailers more than ever did not want to take risk. So, we actually benefited and grew during those really challenging times because retailers still had to have product, people were still buying gifts, but they wanted to take some risk off the table.

Mark Timm:

So, we really pounded our philosophy of taking the risk out of retail. And so, therefore, we came through that time fairly well unscathed as to what could have been a pretty rough go for me having negotiated the deal that I did, I could have been coughing up a good portion of my earn-out back to the buyer. So, anytime you do that, I got the higher earn-out, but I did put risk on the table that I could have had to give back through factors that weren’t really in my control.

Mark Timm:

Obviously, I couldn’t have predicted the financial meltdown that took place. Nobody could have predicted COVID-19 that just hit. And so, there are always factors that come into play. So, that’s the difference between a cash deal and obviously, an earn-out deal.

John Warrillow:

Okay.

Mark Timm:

Go ahead.

John Warrillow:

Let me unpack it because I’d love to unpack this. Because what I didn’t say to our listeners up front was that you sold this company and bought it back and then sold it again. And so, we’re going to do all three of those transactions. So, the first one, if people are listening and think, why are we talking about a business back in 2009? Hold your guns because we’re going to get into the transactions much more recent. But let’s just spend a bit more time unpacking the ’09 transaction if you could.

John Warrillow:

And I’m curious to know the difference between guaranteeing EBITDA and an earn-out. So, you said that you got them to a four and a half times multiple. What proportion of that was at risk in the earn-out?

Mark Timm:

Yeah, so half of it was cash. And so, I got a cash transaction of 50%. And then I had 50% was earnout. So, a large piece of this was at risk. And then, but now here’s what I did. In exchange for guaranteeing the EBITDA, okay, in exchange for guaranteeing the EBITDA in the first two years, I did negotiate not only a higher multiple, but I also put no cap on the upside, which meant that I could exceed the earnout by an unlimited amount based on a percentage formula.

Mark Timm:

And so, that’s something that worked for me in a growing business, because if it’s growing, then if it has the opportunity to keep growing, then in my case, I thought I could potentially exceed the second half of the earnout if the company continued to grow. So, I built that into the equation as well.

John Warrillow:

Okay, so, I just want to make sure I understand that. So, you guaranteed the first two years’ worth of EBITDA. What was at risk? If you hadn’t hit those numbers, were they able to claw back the entire sale price? Or what proportion of that [crosstalk 00:16:28]?

Mark Timm:

Okay, so, you already asked me bottom line, let’s just use a million dollars.

John Warrillow:

Sure.

Mark Timm:

So, if I did not achieve a million dollars, then let’s say I did 600,000, then they could take out of my earnouts of year one $400,000 and apply it to the bottom line of the company. And let’s say catastrophe hit and the company didn’t make any money, then they could to claw back into the cash amount that they gave.

Mark Timm:

So, in essence I literally had, so I had not all of it at risk. But if something catastrophic happened and the company made no profit, they literally could have clawed back a good 80% of what they put on the table, which, which gave them it lowered their risk appetite. And so, obviously one important thing to note is that they hired me to run the business for the next five years.

Mark Timm:

So, that played into a factor of me being willing to make this commitment, because I was the one running the business. And so, I knew I would have a lot of influence over the business, at least for the period of time of my earnout. And that mattered in negotiating a deal structure like this. If I was not going to run the business, this would have been a much higher risk to me.

John Warrillow:

What would have happened had you not hit the profitability numbers and they had fired you as an employee of the company?

Mark Timm:

Yeah. The only way they could fire me is if I committed a felony.

John Warrillow:

Okay. You’re pretty locked in.

Mark Timm:

I’m being very honest. I would have had to have been dishonest. I would have committed crime to be fired. And so, that would have been difficult, because I’m a pretty straight up guy. So, that was part of the negotiation.

Mark Timm:

And this is why I didn’t negotiate the deal myself. I hired someone. I paid a fairly hefty legal bill in the transaction to make sure that I had things buttoned up and that they were done correctly. I hired someone that does this for a living and this wasn’t their first rodeo. And they made sure it was done right. And I’m so thankful that I did that.

John Warrillow:

And I’m so glad … We have never covered this, 300 episodes in. When you talk about hiring someone to negotiate that, I’m assuming you’re talking about a lawyer negotiating your employment contract.

Mark Timm:

Yup.

John Warrillow:

It occurs to me that there’s two types of legal contracts that are critical in the sale of a company. One is the final share purchase agreement, which is usually conducted by an M&A lawyer, someone who’s steeped in corporate finance. And then there is the employment agreement. And employment agreements are usually written by HR lawyers. Did you use the same lawyer to do both?

Mark Timm:

No, no, not at all. So, I had my transactional element. So, I had a consultant that used legal counsel for the actual financial transaction. But then that same consultant recommended a lawyer to do the employment agreement. And I have to tell you, the employment agreement was more important in the life of this transaction than the sale agreement was.

Mark Timm:

And so, so there were more elements that were tested in the life of this in the employment agreement than were tested in the purchase agreement. The purchase agreement turned out to be pretty black and white, pretty straightforward. But the employment agreement was the one that was referenced more often and gone back to and revisited on a more regular basis.

Mark Timm:

And so, I’m so, so, so thankful that I did the employment agreement the way I did, which I could have just done a boilerplate employment agreement and or could have been very problematic in my particular situation.

John Warrillow:

What were the biggest differences between a boilerplate employment agreement and the one that you negotiated?

Mark Timm:

Yeah, it was the same things that we’re talking about. It was the kind of things that they put in to make sure that I couldn’t be fired for just because of a whim. It was the kinds of things that basically gave me … It limited their ability to impact the company’s decision making with regards to EBITDA. And so, that was built into the employment agreement. There was only so much that they could do to influence EBITDA.

Mark Timm:

So, they couldn’t just decide, hey, we’re going to charge this venture $50,000 a month in management fee, and then the EBITDA goes to zero. So, they put in a lot of things that they had seen go wrong in the past to make sure that I actually could run the business and that I had the ability to influence the points that mattered most in the business with regards to hiring, firing, and cost control. And it didn’t mean that they couldn’t. And they ended up deciding to put a lot of burden on the company, but it had to be factored out of EBITDA consideration.

Mark Timm:

So, they basically allowed them to do whatever they needed to do to the company to be in their benefit from a tax consequence. But it could not affect my role as the president of the company, or, ultimately, my EBITDA calculation.

John Warrillow:

So smart. I’m so glad we covered this and you shared in such great detail. In those two years, again, admittedly, the biggest wildcard that we’ve experienced, maybe an exception with COVID now, you were in the throes of this great recession in 2009 was the year and it wasn’t great in 2010 either. Did you hit the EBITDA goal? Or did you actually fall short and have to get back some of the earnout?

Mark Timm:

Yeah. So, year one, I hit the EBITDA goal. And so, it was no problem. Year two was where we felt more of the pain of the financial meltdown, obviously. And so, yeah, I had to contribute some back in the equation. And you know what, it was fair. I don’t look back on that at all. I feel like the company that bought my company was a good company, and good people, and they negotiated a fair deal. And it was a fair deal.

Mark Timm:

And so, consequently, yeah, I didn’t have any problem with the fact that when it fell short in year two, I had to make … And in that particular case, I didn’t have to reach into my pocket. I just didn’t receive as much of the earnout. And so, consequently, it just was what it was. And so anyway.

Mark Timm:

And by the way, like I said, this is one of those situations where I feel like everybody, they couldn’t predict the financial meltdown and I couldn’t predict the financial meltdown. So, it would have been unfair for me to be the total beneficiaries of the global events that were taking place. So, I feel like they did a good job negotiating. I did a good job negotiating. And we both came out as whole as you could in a situation like that.

John Warrillow:

For folks watching on YouTube, we do this on iTunes, but we also do it on YouTube. And I mean, I’m looking at you and you’re pretty young guy. I’m doing the math and I’m like, “Okay, seven businesses, five year earnout,” that was a big proportion of your professional life. That was a huge … And it was a sweet spot of my professional life. But on the same token, I mentioned earlier, I made a conscious decision to sell a business that was growing. And so, frankly speaking, I wanted to run the business.

John Warrillow:

So, sometimes people sell a business and they don’t want to run it. They just want to be done with it. And so, I wanted to run the business. I love the people that were there. I like the company that bought our company, I mean, I was I was happy doing what I was doing. And so, but I was at a really cool and my kids were young.

John Warrillow:

And so, to start something else, to do something else could have really upended a lot of things going on in my life. And so, so it was definitely the right decision for me at that stage. I can tell you, that’s not the stage I’m in right now. So, that would not be something that I would seek to do at this stage of my life. But at that stage of my life, it made a whole lot of sense to be able to keep my family where it was at, me doing what I was doing, doing it with a product that I believed in and doing it for a company that I had a lot of respect for.

Mark Timm:

Yeah, yeah. And a lot of factors kind of merging into that decision, obviously. What was that like he five years? I mean, how was it to be an employee for such an entrepreneurial guy? Yeah, it’s, it’s a challenge. I mean, I had to check my ego at the door. I mean, I would be, I would not be transparent to say, it was easy because as an entrepreneur, you’re in control.

Mark Timm:

And suddenly, I had a boss, and I had a real boss. And he’s a guy who had a business to look out for, and so, and he had to make good decisions for his business as well. And so, from time to time we may have disagreed. And as an entrepreneur, that you get to make the decisions. And in this case, I didn’t get to make those decisions sometimes. And so, that was challenging. But I did respect the company, and I respected him and I learned how to check my ego at the door and say, “This isn’t personal, this is business.” And I made this decision, I negotiated this deal, it’s a fair deal. And so, I need to see this through, and I did.

Mark Timm:

And if it means anything to the equation, to the company, and my situation, I actually re-upped and extended my time a little bit. So, I went beyond the five years, and I did that for my family. And so, that was at the point where I said, “Okay, my kids are at really critical ages. My kids are teenagers. They need their dad.” And the company was abundant enough to see my value.

Mark Timm:

Obviously, the earnout was long gone at that point. So, it was more of a true employment. But I signed up for a couple more years to run that venture. And I carved out some time for myself to do some philanthropic things that I wanted to do. And so, it was, again, a win for me as a husband, as a father, and as a philanthropist to be able to do that.

John Warrillow:

Proverbial, have your cake and eat it too, so to speak.

Mark Timm:

Yeah.

John Warrillow:

So, let’s get into the circumstances around you buying it back. This blows my mind, like I’m trying to think of like, you’ve sold your business, you’ve had the success, you go through a five-year earnout, you’re finally done with it, like you’re finally done with it. And a two-year reup. What happened? Why did you buy it back?

Mark Timm:

It really again, came down to the situation of the company was pivoting, they were going in a little different direction, and they decided they weren’t located here. And they decided that their options … Well, in all fairness, I decided not to reup.

Mark Timm:

And so, I wasn’t going to continue to run it. So, if I’m not running it, does the company even need to stay here? Does it need to stay in this location? And they had decided, no, it didn’t need to stay here. And so, that meant the possibility of some people that I knew and love losing their jobs. And by the way, I did not disagree with their decision. I think it was probably the right decision for them to do that.

Mark Timm:

And so, again, it’s one of those rare situations where we just entered into a conversation and the cost involved in moving a business of this size was substantial.

John Warrillow:

How big was it at the time? What revenue-

Mark Timm:

At the time, I mean, it’s not far off. I mean, it’s a little lower revenue than what it was, but still similar amount of employees, maybe 30 or 40 employees. And so, not a small footprint, in fact, some of the new products become larger. And so, it was a little larger operation from a warehouse space, et cetera. The previous company had done a good job of automating and putting some things in practice that made it a little more complicated of a business than it was.

Mark Timm:

And so, there you had it. And they could easily absorb it inside of their world, but at a cost, I mean. And so, we entered into some conversations and talked. And when they looked at the cost to move it, and then I looked at it and said, “Well, what if I could hold on to it and would I be interested in doing that.” And here was the twist, the only reason I was interested in doing it is because some of the staff that had been with me for a long time stepped up and said, “Hey, we want to be a part of this.”

Mark Timm:

And so, they actually brought capital to the table. And yes, and we bought it collectively, not every single person, but it’s one of those things where it felt really good to me to not be the only owner of this second go around and to have people that literally started, two of the people, it was their first job they ever had was working for me.

Mark Timm:

And they had grown up to the point and had started doing their own thing and it becomes successful. And so, it was a group of employees that went together that completed this second transaction. And so, I was obviously a big part of that, but it was collectively something that we did together as a group. And that felt really good to me because then I wasn’t back as the as the solopreneur in this equation. And so, I had an ownership group that we did it.

Mark Timm:

And in the process, again, I really feel it was a fair transaction. I think it was a fair transaction for the company selling. It was a fair transaction for buying. And so, I don’t think either party actually did better or worse than the other in the transaction. It was a fair deal. And I think for me, the biggest thing that I can look back on my own experience and say, I put a lot of energy into striking fair deals. And I had to learn that the hard way.

Mark Timm:

I had a couple transactions where I got the better end of the deal. And after time, it backfired. And so, it’s one of those things where I personally put a lot of energy into making sure the deal is fair for both sides because then the opportunity for success long term is there. And I felt like it was a fair deal for them, fair deal for us. And we were able to complete the transaction.

Mark Timm:

It wasn’t the intention. I mean, you kind of share the end of the story. It wasn’t the intention to turn around and sell it again right away. But it turned out that there was another business that we were involved in that another buyer was interested in, and the two businesses had become intertwined. One was an eCommerce business and one was a manufacturing business. And so, it was that entanglement that ended up providing the opportunity for a second transaction.

John Warrillow:

Okay. Want to get into that. But before we do, let’s talk about purchasing this business. So, on the front end, you’d sold it for four and a half-ish, half of which was in cash, half was on an earnout, which seemed fair to both parties. How did you structure the purchase?

Mark Timm:

Yeah, so the purchase was a little different. Obviously, cash, you know there’s got to be some cash to the table. But in this particular case, there was an aggressive payback structure. And so, it was a, what do you call it, owner or seller findings. It was part of the equation. So, it was kind of an intricate scenario, cash, some seller financing, and some just kind of consideration.

Mark Timm:

And so, it was not based on there was not an EBITDA consideration. It was more of a just an agreed upon placing a value on what it would be to move the company, placing value on what the assets in the company, placing some goodwill. I mean, it was one of those situations where it was like, let’s find the right number. Let’s find the number that feels fair to everybody.

Mark Timm:

And from that perspective, I think that was really the only way to structure the second time around, was to … Because there were so many other factors involved. There had to be a value placed on what it would be to relocate the business. And so, versus the first time, it was a transaction based on health of the company.

John Warrillow:

Yeah. And so, they’re looking at an opportunity cost on one hand moving it, it’s going to have all those expenses. And I’m interested to know when you bought it, did you buy the shares or the assets?

Mark Timm:

Yeah. So, assets.

John Warrillow:

The assets, okay. So, the liabilities, the severance liabilities of employees and so forth did not transfer across?

Mark Timm:

No, did not, but on the same token, all of the staff was kept. I don’t think there was a lot of liability. I mean, we obviously did would have avoided some of that, should something have come up. But as it turned out, it just was the better way to do the transaction this time around.

John Warrillow:

And did the employees, did they get recognized for their tenure in the new company, if you know what I’m saying? Did they have to sign employment agreements that basically washed out any tenure they had?

Mark Timm:

Yeah, I mean, as an entrepreneur, I mean you know this. Employment agreements are fairly fluid. I mean, it’s not a big company. And so, there’s not massive retirements and all those kinds of things. And so, I think everybody was just thrilled to have their jobs. I think they were thrilled to be doing what they were doing and what they loved and for a company they loved.

Mark Timm:

I’m not trying to paint an overly rosy picture. There’s ups and downs and everything. But it was, again, when you choose the right buyer and you get some of that stuff right, a lot of things can work. Again, I give a whole lot of credit to the company that bought it and I give them a lot of credit for the decision they made to sell it. I mean, I think it was the right decision to buy it. I think it was the right decision to sell it.

Mark Timm:

And it was the right decision for me to sell initially and it was the right decision for me to buy a back. And so, I guess maybe it’s rare that you can have that kind of clarity looking back. But I really do have that kind of clarity. And would I have done a few things different? Of course, I would have.

John Warrillow:

Like what?

Mark Timm:

Well, I mean, looking back, I would have structured things maybe a little different in how I began things in the beginning. I would have made a few tweaks to the employment agreement. I can’t really get into the specifics because I am bound by some legalities around the details of the transaction. That’s why we’re talking round numbers and we’re not-

John Warrillow:

It’s not specific, yeah.

Mark Timm:

And so, because I certainly wouldn’t want to violate a confidentiality. But there are always things that are in those kinds of agreements that you could go back and change. But that’s just life experience. And so, I’ll tell you what, I wouldn’t change. I wouldn’t change who I sold it to. And I wouldn’t change that experience. I’m still in contact with them.

Mark Timm:

The main guy who negotiated the deal, and I mean, he bought my book that I just came out with and he bought it, read it, and then bought it for all of his kids.

John Warrillow:

That’s great.

Mark Timm:

You want that in life. You want to be a decade away from a transaction like this and still feel like you can have lunch with the people and that they’re following you and you’re following them.

John Warrillow:

And I appreciate that you may not be able to answer this with the specificity that I crave. But that’s okay. So, when you bought it back that second time around in 2016, I’m assuming you bought it at a discount to what you sold it for, just given the opportunity costs they would incur with moving the business. So, it would give you a bit of leverage. Can you talk round numbers percentage basis? Are we talking a 50%? Discount, a 10%? discount? Any sense of what-

Mark Timm:

Yeah, I mean, in the spirit of again, not wanting to get in any trouble, yes, I can just say it was at a discount. And just from the story, from the timeframes, from where we were at in the world, you can probably appreciate that there was. But again, here’s the beauty is that remember, I guaranteed profitability so you can also figure out that I delivered some considerable bottom line numbers for everybody, myself and the purchaser.

Mark Timm:

And so, from that standpoint when you look and do the math and over time, all of a sudden, you can see that this was not a situation where the business was failing and where the business didn’t have upward potential. Otherwise, I wouldn’t have been interested in being a part of it again.

Mark Timm:

My only decision not to continue with the company actually had to do with just wanting to do something else in my life. And so, it certainly wasn’t because I didn’t have respect for the company that I was working for. And it wasn’t because I didn’t like the company itself. I just found myself in a place in life where I wanted to try some new things and do some new things. And that was the precipice for me wanting to move on.

Mark Timm:

And what it did is in getting it back and in doing it with a group of other people, I was able to carve myself out of the day-to-day management of the company. And so, it was kind of the best of both worlds. I’m still involved in a company I love, but I’m also freed up to do some other things. And so, that was the real attractive point to me that I could without breaking any employment agreements, I could start to do some other things.

John Warrillow:

It makes so much sense. And I think a lot of people listening to this would be like, “Yeah, that’s exactly what I crave. I’ve been doing this for 10 years, 20 years, 30 years. I just crave the ability to do something else.” So, let’s get back. So, 2016, you buy it back with some of your team, putting in some of the equity as well. Was there a straw that broke the camel’s back in terms of wanting to sell it a second time? You mentioned there was an interconnection between you guys and an eCommerce company. Maybe can you unpack that a little bit? What exactly was the truth?

Mark Timm:

What happened was I had gotten involved with two of the people that joined me in buying this company back, had started an eCommerce company and I had become part of that company as well in the whole process of they gave me an opportunity to get involved in that because I’d given them an opportunity to get started in their career. And so, I took that opportunity.

Mark Timm:

And so, that’s kind of what brought us all together, was me getting involved with their company and them and us coming together with this. And so, what happened was, obviously, the eCommerce company became the largest customer of the wholesale company.

John Warrillow:

What did the eCommerce company do? It was selling stuff online?

Mark Timm:

Selling product on Amazon, selling product on Amazon. And so, obviously, now, owning the original company, and so, now, instead of just having a few products online, you’ll literally listing the entire company online. And so, you can imagine the results of that kind of focus. And so, next thing you know, the company becomes the biggest customer of the wholesale company is the retail company.

John Warrillow:

Because you’re buying the music boxes from you guys and then reselling them effectively on Amazon.

Mark Timm:

Correct.

John Warrillow:

That’s the business model. Okay. Did the two guys that started this eCommerce company, did they run that by you in advance and say, “How do you feel about us going to do this?”

Mark Timm:

Oh, I’m going to be very transparent. This is something I can share. I hired them both while they were still in college. I recognize their talent. And I said, “Hey, look, if you guys will give me five years, and do everything I asked you to do, I will mentor you, I will coach you. And then you have my full blessing to go out and do whatever you want to do.”

Mark Timm:

I didn’t realize they’d do something together. I mean, they didn’t even know each other when I hired them. So, I was true to my word. They gave me some great years of their time and effort. And so, when it was time for them to go do their own thing, they had my full blessing. I mean, I was highly encouraging them to do whatever happened that they saw fit and they were young and saw an opportunity in eCommerce and even became a customer of the company I was running,in a big customer company I was running.

John Warrillow:

But I guess another just strategically, you could have taken the decision in the company that in addition to selling to retailers, we’re now going to set up an eCommerce division and sell to Amazon.

Mark Timm:

Yeah, absolutely. It was early days, it was early days. So, I don’t think we saw that as an option. But we certainly could have. And we were selling to a lot of eCommerce retailers. So, they weren’t the only one. They were just one of the eCommerce retailers we were selling to. So, we saw our business more as selling to other people who were selling online, not selling online our self. So, it didn’t really raise … Now, it’s a little different. People are like, it’s okay for a brand.

Mark Timm:

At that particular time, it was really frowned on for a brand to sell their own product online like you were. You were kind of cheating on your retail customers if you didn’t.

John Warrillow:

Yeah, channel conflict.

Mark Timm:

Now, it’s not the case. But you have to understand the timeframe of when eCommerce was just starting, that was not an okay practice at that particular time. That was frowned on. So, it made perfect sense. I mean, it, it was a positive thing. They were a customer, so it was cool. I mean, and they started selling a lot of them. And so, they became an important customer.

John Warrillow:

And to be clear, are you a partner in the eCommerce business? Are you a shareholder in the eCommerce business?

Mark Timm:

So, at that particular time, no. At that particular time, I’m not. I’m just an encourager. I’m a mentor. That’s, frankly, what I was. And I made the commitment. My integrity was such that I said, “Give me five years and I’ll support you in whatever you’re doing.” And so, I was just a mentor at that point. I didn’t back the company or I wasn’t an investor, I wasn’t a shareholder.

John Warrillow:

Got it. And so, again, I’m trying to get some clarity on the reason to sell. So, you’ve got the eCommerce company that’s now become a thing. And it’s now a customer, which is great. You’ve got the retail business continuing. You’ve only just purchased it back two years prior. So, why sell?

Mark Timm:

Okay, so here’s the deal. I basically brought to the new venture when I did become a shareholder after the transaction. And I basically explained my philosophy on selling a business and that you sell a business when it’s growing, not when it’s peaked and going on the other side. And so, there’s starting to be a regular ownership meeting around, hey, what would it look like if we did a similar thing to what Mark did and collectively.

Mark Timm:

And so, this time around was really cool because I actually got to be the consultant that I had hired to do the first transaction for me. I played that role in this transaction, because I was not the majority shareholder of the eCommerce business. And so, consequently, I helped to facilitate that entire transaction on behalf of the entire ownership group as the consultant that really led it. And I found the buyer, and I was able to use all of my previous wisdom to make sure that we set everything up the right way and did everything the right way.

Mark Timm:

And you asked me, what would I do differently? Well, I got the chance to do it differently in how things were set up in the transaction. But because by this point, the manufacturing company, it becomes so important to the eComm company, you couldn’t really unwind them. You couldn’t really untangle them. And so, it kind of became a package deal in the transaction because unwinding them would have been difficult. So, we sold all of it in that next timeframe.

John Warrillow:

Interesting. So, you kind of jammed them together and say, “Okay, this is the thing.” So, that opens a whole Pandora’s box. So, how did you value the eCommerce company in order to … Because did you actually create an entity with both companies, the manufacturing company and the eCommerce company before? And then you sold that new entity?

Mark Timm:

Yeah.

John Warrillow:

Okay.

Mark Timm:

The entities were separate. And so, they were separate. And so, the eCommerce company was sold in a very similar fashion to what I sold Cottage Garden as a multiple of EBITDA. And I do apologize, I cannot disclose that information. But it was a larger company than where I was at. And the multiple obviously was, it’s a more sexy category than where things were at just a few years ago, so eCommerce is a pretty cool category to be in.

Mark Timm:

The original company, Cottage Garden, it was intact still as an entity. So, it was its own entity. And so, they bought two entities. And so, it was a really a package deal. But they were structured differently. And basically, this is what I can tell you, is that the eCommerce was based on an earnout. And the other one was based on a negotiated amount.

Mark Timm:

And even though there was creative transacting and financing, and how everything was done, and payments, and all of that, it was separated it. And it was easy to separate because it was similarly to how the company was bought back. And so, it was easy to kind of hold and transfer some of that value and the value of the asset and for it to transact in a similar fashion.

John Warrillow:

Did that create tension among the shareholders because you got the eCommerce guys running the sexy business, getting paid handsomely, big multiple, and then you’ve got the maybe traditional business where these guys put their own hard earned money down on the table and maybe aren’t getting the same valuation. Did that create a bit of tension, a bit of jealousy?

Mark Timm:

No. I want to give a lot of credit to the guys that started the eCommerce company. And they came in and they became partners in buying the company back. And they gave the other people that were involved in buying it back a chance to buy into the eCommerce company. So, in the end, everybody was shareholders of everything, now, at much different levels. So, trust me, at much different levels. But everybody was motivated for the entire transaction.

Mark Timm:

Again, it comes back to fair deals. That was so extraordinarily smart on their part to say, “Hey, look, we’re coming in, in a major way to do this transaction. But we could see some future conflict of the haves and have nots, et cetera, so, we’re going to give an opportunity for you to buy in to this venture. And so, that everybody is kind of it has an ownership of different proportions in both ventures.” So, there wasn’t any negative repercussions in this transaction because everybody was benefiting on both sides.

John Warrillow:

The Cottage Garden guys, were they paying cash for the eCommerce company shares or was it actual money out of their pocket?

Mark Timm:

Yeah, I mean, I would say that’s a fair way to say it. I mean, it was cash out of pocket. I would say that a lot of that cash was coming from the venture that they had. But as far as I’m concerned as an entrepreneur, cash out of your company is cash out your pocket. You can use it for other things. And so, thankfully, the business was doing well. And so, the business was able to finance their portion to some extent. But yeah, they came to the table with cash and had to come to the table with more, and likewise myself.

Mark Timm:

And I had to come to the table with cash to buy in to their venture. Rightfully so, that was the right thing to do. And so, there was a lot of cash taking place back and forth to make this all work. But it was always fair in consideration of the value that things were being valued. And the goal was always for the future. It was always like, let’s do something fair now, so that in the future, we can all win together. That’s important.

John Warrillow:

So, at the valuation that you are able to buy in to the eCommerce company, I appreciate you can’t share the actual final multiple, but what was the return on that investment? So, if you bought a share for a dollar, like when you actually sold the eCommerce company, was that shared worth $2, $5, 50 cents?

Mark Timm:

Yeah, I mean, this is what’s cool. It’s fair to say that in a short amount of time, there was a double transaction that was on the table. But here’s the cool part, using the wisdom that I had in the past, I again put together a very similar kind of deal where there was some guaranteed delivery of results in the early side of it, but in exchange for no cap on the backside of it. And so, the opportunity during the life of this transaction, which is not complete, it’s still in the middle, it looks very much like the agreed upon multiple will increase in a very healthy way for everybody because the company continues to be really healthy and profitable and doing well.

Mark Timm:

And that’s the beauty of a transaction is that I feel like the person … When you structure a deal like that, people need to understand is that you say, “Well, man, you’re getting this really great deal.” No, the only way that you get a great deal is if the company is doing so well that the person purchasing it is getting a windfall return above the valuation that they marked whenever they started the whole purchase.

Mark Timm:

So, what I mean by that is, is that if you purchase something for a dollar, and so you say, “Hey, I’m going to value this thing at a dollar, is what I bought it at, and I hope to make enough money to get that dollar back.” And then all of a sudden, the company is doing so well that you’ve made that money back, and you actually have $2 that you’ve gotten back. And now, the person selling it benefits on that extra dollar.

Mark Timm:

And so, they helped you get your money back and they helped you to accelerate the return on investment, and you get a portion of that return on investment in the upside EBITDA calculation. And so, obviously, that wasn’t the case on my first time around, just due to economics and overall, where things are at. I still feel that it was a very fair transaction for both sides. And I think everybody came out fine in the end, but this is a situation that’s not done. So, anything can change. But it does look like it’s going to be a win for both sides with higher upside than what people value the company at.

John Warrillow:

What’s the difference in your emotional response to selling a business where there were a group of shareholders versus the first time through where it was only you benefiting economically? I’m not asking that question very well. But let me see if I can restate it. The first time you sold, you were the one who economically benefited from the sale of this company created for the most part. Now, the second time around, you are benefited along with some of the other shareholders. As you reflect back on that, what are your sort of feelings about that?

Mark Timm:

I mean, I’m in a different place in life. I think it was awesome to do something collectively. It was great to build something of value that somebody else wanted to pay for individually. But at a certain point, I don’t think we were put on this earth to be alone. And I enjoy the entrepreneurial journey this time around at this stage of my life with other people. And it was fun to lead other people through their first transaction. So, everybody in this the second round except for myself was in their first transaction. Go ahead.

John Warrillow:

No. Take me into that room the first time that the idea of selling came up in 2017, it would have been, where you’re a young management team. You’ve repurchased the business a year prior. So, for a lot of people thinking, it would be way too early to sell. But you raise the specter of, well, why don’t we sell when we’re growing? And you said you played the role of consultants to help them sort of think about that. What advice or what kind of consulting did you give them in order to get the business ready to sell?

Mark Timm:

Yeah, I mean, I walked them through the psychology of where most people sell a business when it’s past its point of where it’s plateauing or it’s peaking. And I walk them through that logic. And I also walk them through the logic of saying, the best time to sell a business is when you’re not ready to leave it. And they looked forward and said, “Hey, when would I be interested in leaving it?” And if you can say, five years from now, I want to be doing something else, then you better be selling the business now instead of five years from now.

Mark Timm:

And so, they understood and respected that psychology of the emotional piece of it. And so, they could wait until they’re ready to sell it and probably be past the point of staying with it. And in this case, they were a lot like me. They sold a business that they were eager to continue running, and are still running it today, and are doing a phenomenal job of running the business. And it worked out good for me because I didn’t have to stay with the business this time for five years. I could extract myself after a reasonable amount of time.

Mark Timm:

But I walked them through the emotional rollercoaster that I went through and what worked and what didn’t for me, and they learned from my experience, and I was able to be really raw and real about it, and I think improve on the things that I did right or the things that I should have done differently.

John Warrillow:

There are people listening to this, and they’re saying, “Mark, I’m not going to do an earnout. There’s no way. When I’m ready to sell, I want cash and I want to leave. I know this earnout and vendor take back BS and half up front, half … I want 100% of my money up front.”

Mark Timm:

So, all I can say is this, just like we had to place a consideration on the company moving the company and place a value on that, you must place a value on you walking away. If you don’t, you won’t sell your business for … In my experience, I wouldn’t have sold the business for what I sold it for if it was an all cash transaction. I think I could have got the business sold. But it would have been at a discount to what I got it sold for because there is value on the owner staying with the company.

Mark Timm:

So, I’ve had cash transactions and they’ve been clean, but at a significant discount to what maybe I would have got if I would have stayed with it. But look, in my experience, I’m in a different place in life now. I would be more interested in a cash transaction at this stage of my life than an earnout. But I’m just at a different season in life. So, really, for me, it’s the season that I’m in that will dictate whether I do a cash transaction or an earnout transaction, and it’s who I’m doing it with.

Mark Timm:

I was very fortunate to have partners involved that wanted to stay with the business. And so, it made it very easy to do the transaction that we did. But hey, I get it. I hear people all the time say that. People come to me and they ask for advice. I hear it all the time them say, “Hey, look, I want a cash transaction.” I’m like, “Great, it can be done. You just need a place of value on that cash transaction.” And if you do and you place a real value, then you can likely negotiate a very fair transaction.

Mark Timm:

And I will reiterate this to anyone and everyone always, put more time and making sure the deal is fair than making sure you get the good deal. That is the greatest lesson that I’ve learned in seven transactions is the deals that I got the best deal are the deals that worked out poorly. And the deals that I got the worst deal are the deals I’m the most sour about. But the deals that I put great effort and energy to making sure they were fair for me and fair for the purchaser, those are the deals that worked out and still worked out. And those are the deals that I can still have lunch with the people and I look forward to seeing them the next time I see them.

Mark Timm:

And one piece of just me that I’ve learned through this whole process is that there is no amount of energy or effort that you can put into making sure it’s a fair deal that you would look back and say that was not time well spent. It’s not easy to do. Because as entrepreneurs, we’re wired to get the best deal. If I get the best deal on a car tomorrow, I’m telling all my friends about this great deal I got. But great deals are not scalable. Generous deals are not scalable. The only scalable deal in your life is a fair deal where both parties win. And so, that is the transaction that I look for in an exit.

John Warrillow:

And so, is this something that’s a difference between a fair deal and a good deal, by the way I love that idea. Is this something on which you and Kevin Harrington, your coauthor, disagree? Because I’ve watched Shark Tank. I’ve watched the beat up these young entrepreneurs and just getting completely pummeled and driving them about data valuation. And Mr. Wonderful gets up there and says, “You’re terrible.”

John Warrillow:

I’ve watched the show, I think it’s great. Kevin Harrington, your coauthor is on it. I mean, has been on I should say. The whole purpose of the show is to drive down the valuation and get a good deal, not a fair deal. At this point, you must disagree.

Mark Timm:

And that’s a shark deal. But I got to tell you, Kevin doesn’t disagree, because remember, Kevin was only on the first few seasons. And one of the reasons that he left the show is because he wanted to help more entrepreneurs. And so, you can only help one at a time in that environment if you do a deal with somebody. Most of the people coming on the Shark Tank, they don’t need the money, they need the mentorship. If you don’t know the truth, they need the mentorship. They need the Rolodex.

Mark Timm:

And so, Kevin was able to help a whole lot more people not on the show than he was on the show. And he helped a lot of people on the show. And he did a lot of deals, and he looks back on it as an awesome experience. But he’s able to help a lot more entrepreneurs this way. And I’m going to tell you something, this whole concept of a fair deal, I see him live it out over and over. I mean, he’s taken 20 businesses to over $100 million. And the only difference between him and other entrepreneurs on scale is that he negotiates fair deals.

Mark Timm:

We talked about it in the book. It’s a big section of the book is fair deals and how you negotiate fair deals. And so, one of the reasons he is who he is, is because he learned how to negotiate and puts incredible energy into negotiating fair deals. And so, yes, you would think he would disagree. But the reality is, is that that’s really how he’s wired. And it was a little counterintuitive to what you see on the show. And it’s one of the reasons why he loved his experience, but he moved on so that he could help even more entrepreneurs and mentor more entrepreneurs than he was able to in that environment.

John Warrillow:

That’s so cool. Hold up the book again. Show me the title. It’s Mentor to Millions.

Mark Timm:

Mentor to Millions. And by the way, millions is not millions of dollars, it’s millions of people impacted. If you’re listening and you have a product, purpose or passion that the world needs, the fastest way to get that to the world is mentorship. If you have the right mentor, if you become that mentor’s best student, and then you turn around and you mentor other people, you are well on your way to mentoring and impacting millions of people.

John Warrillow:

Tell me about the writing process because I’ve always wondered, I’m genuinely curious because I’ve seen books where it’s like an Andre Agassi in big letters on the cover and then like in little letters like, and Sam Smith or whatever, and Sam is the one who did all the writing and Andre puts his name on it. Other times, it’s like two luminaries come together, two big idea people come together write a book.

John Warrillow:

My sense is it’s more of the latter in this case than the former. But I’ve always wondered, how do you get a book written with two big personalities who kind of … I could just see, I could never imagine writing a book with someone else, because I’d be like, “No, no, I want to write.” “No, you write it.” It would blow up in about five seconds. What was the writing process for you and Kevin like?

Mark Timm:

Yeah.

John Warrillow:

Did you write a chapter and he responded? What was it like?

Mark Timm:

We’re great partners and we’re friends. And so, we went into this book with honest expectations. He’s probably the busiest guy I’ve ever met in my life. So, Kevin Harrington is not going to sit down and pen out a book. But what he is great at is telling stories and telling life’s lessons. So, we literally spent days just extracting out of him all of these amazing lessons that I learned through my time with him and that he’s learned in his life. And then I was able to sit down and put the meat on those bones, if you will, of the context around where were we when he was telling the story? What was happening?

Mark Timm:

This is not a how-to book. This is a story of an entrepreneur, then everyday relatable entrepreneur, me and his mentor, and learning from that mentor, and I learned stories flying on airplanes with him, at events with him, and at his house with him. And I learned stories and I learned lessons with my kids with him and watching him with his boys.

Mark Timm:

And so, it’s such an easy read because it’s storytelling at its best. You pick it up. You think you’re going to read a chapter. The next thing you know, you’ve read seven chapters because every chapter builds on the other chapter because it’s all stories. And stories are the oldest way of communicating. I mean, this goes back to biblical times, where they’re all told in stories. Aristotle was the original storyteller.

Mark Timm:

I mean, the greatest movement in the world is a story. I mean, a good story is unstoppable. And it will last for centuries, if not generations. And so, we use stories in this book to reinforce our points. We talk about business. We teach a lot about business. But we also talk about relationships. We talk about family. And I deliver this bomb that the most valuable business you’ll ever own, operate or even be a part of is the business you go home to, not the one you go to every day, that your family is your most valuable business.

Mark Timm:

Now, don’t get any big ideas on this podcast. Your family is not for sale.

John Warrillow:

That’s what I was going to say.

Mark Timm:

So, you can’t quite put an EBITDA on your family. But you can’t talk about bottom line. You can’t talk about reputation. You can’t talk about marketing. My family had a logo. We had a mission statement. I mean, we had shares. My youngest child has the same shares that I do in our family business. And so, I legally incorporate in my company.

Mark Timm:

So, if you’re listening out there and you’re good at business, you can be that good at home. I just needed the worlds to make sense to each other. And so, I made my family my most valuable business and it made sense to me, and ultimately, it made sense to my family. And I unpack a lot of that in the book. I take a lot of the lessons Kevin taught me and I show how I applied them at home to my most valuable business.

John Warrillow:

I love it. It’s called Mentor to Millions. As we speak, it’s both the USA today and Wall Street Journal bestseller. Congratulations. Thank you so much for sharing the time with us today.

Mark Timm:

Hey, thanks for having me. I really appreciate your time, a great interview and thanks for unpacking and helping me relive a period of a decade-plus of my life and I hope everybody got some value out of it.

John Warrillow:

Oh, I’m sure they did. Thanks, Mark.

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