Are you using Facebook and Twitter to promote your business?  If so, one of the questions you’ve already, or will face is whether to promote yourself personally or your company. For example, should your Twitter address be @JoeBlow or @JoesLawnCare? Likewise, should you use a personal Facebook profile to promote your business or create a Facebook “fan page”?

As trivial as the question may seem at first, I think the brand yourself-vs-your-company decision has real economic implications. According to Forbes Magazine, Oprah has a net worth of $2.4 billion largely because of the personal platform she has built.  The Oprah Winfrey Show has 75,000 followers on Twitter, O magazine has 106,000 followers, Oprah Radio has 25,000 followers. Oprah herself has more than four million followers.  I wonder how the Forbes researchers valued the power of her personal brand? Is Harpo (her holding company) worth much without Oprah as its chief pitch person?

Tim Ferriss on why you should stop wasting time on branding yourself

For answers I spoke with Tim Ferriss this week who, as the author of The Four Hour Work Week, has a six figure Twitter following and one of the best-read blogs on the internet. I asked Ferriss whose new book The Four Hour Body comes out later this year, why he never used his personal brand to promote his business BrainQUICKEN, which he sold last year:

WARRILLOW: You have one of the best-read blogs in business with hundreds of thousands of followers yet you rarely used your personal platform to promote your business.  Why not?

FERRISS: Unless you’re in one of a handful of businesses like public speaking, I think managing and growing a personal brand can be a huge distraction for company founders. I see all of these entrepreneurs trying to collect Twitter followers and it reminds me of a matador waving a red flag in front of a bull.  In this case, the founders are the bull. The bull fighter moves away the flag and the bull comes up with nothing but air.

Steve Jobs has a personal brand but it is Apple’s product design that makes it such a valuable company.  He isn’t jumping on FourSquare to develop his “personal brand”.

I’ll use my Twitter feed (@JohnWarrillow) to let you know when the full article with Tim comes out but in the mean time, it’s interesting to see how Gary Vaynerchuk approaches personal vs. business branding differently.

Could Oprah and Gary Vaynerchuk both be wrong?

Vaynerchuk is the guy who wrote Crush It! Which chronicles how he took his father’s corner liquor store and transformed it into a global wine retailing business leveraging tools like Twitter and Facebook.  In our interview, Vaynerchuk explained how he took the opposite approach from Ferriss and branded himself ahead of his company:

WARRILLOW: You’ve built an amazing personal brand, but was it a mistake to promote yourself over your company?

VAYNERCHUK: I know if I stopped hosting Wine Library TV, we’d probably lose 75 per cent of our audience, but the remaining 25 per cent is still a big number.

WARRILLOW: I think business owners reading this would be horrified at the thought of losing 75 per cent of their customers.

VAYNERCHUK: I understand, but look at the numbers. The average liquor retailer in the United States sells for 30 cents for every dollar in revenue, so a $10-million liquor retailer is worth around $3.5-million. I’ve been offered $2 per dollar of revenue for my business, so I’m confident the value of my personal brand is accruing to my business as well.

If people are worried about undermining their business value by promoting their personal brand, they are not thinking big enough. Look at Oprah or Martha Stewart or even Martha Stewart’s chef, Emeril Lagasse, whose business interests she (Martha Stewart Living Omnimedia) just acquired for $70-million.

My Opinion: decide how you want to spend the next 20 years

Vaynerchuk and Ferriss are two wildly successful guys with two very different approaches to marketing themselves personally vs. their business interests.  So what’s the right answer?

I think it comes down to how you want to spend your time in the next chapter of your life. If, like Vaynerchuk and Oprah, you like bringing your personal brand to a variety of different businesses projects and philanthropic causes, then cultivating a personal brand ahead of any one business gives each new project you undertake a head start.

In contrast, if your goal is to sell your business and ride off into the sunset or do some anonymous angel investing where your contribution is your brain not your brand, then pouring your marketing resources into promoting your company will likely get you a higher price for your business.

What do you think? If your goal is to sell your business one day, should you brand yourself or your company?

As you ponder that, here are two new article I wrote this week on selling a business…

Don’t be boring, follow Jeremy Gutsche’s advice

~ published September 28, 2010 the Globe and Mail

Predictability is one of the most important attributes of any business. Owners, investors and acquirers all want a reliable stream of profits well into the future.

But almost by definition, predictability can be boring, and those same owners, investors and acquirers want to see growth, which usually comes from selling new products and services, and winning new customers. »more

Why You Need to Sell Less Stuff to More People

~ published September 23, 2010 BNET

Are you trying to grow by selling a lot of stuff to a few people or one thing to a lot of people?

If you want to sell your business one day, I’d encourage you to consider selling one thing to lots of people. In fact, if any one of your customers represents more than 15 percent of your revenue, it may be time to diversify.  Being overly reliant on one customer is not just risky now, but it will also discount the value of your business when you’re ready to sell it down the road. »more

(photo of Timothy Ferriss courtesy of UK Telegraph)

(photo of Gary courtesy of Gary’s Facebook page)

This week I spoke with Pat Lencioni, the author of Getting Naked and Five Dysfunctions of a Team, among other bestsellers.

Getting Naked is a fable about a business owner who decides to abruptly sell his successful company, Lighthouse Partners, after his daughter is involved in a car accident. Once the new acquirer takes over the business, they discover that Lighthouse is successful because of their unique culture as opposed to a superstar sales team or proprietary methodology.

Pat’s hypothetical story raises a number of real world questions about selling a business: if your culture is the secret sauce that makes your business unique, how do you give an acquirer confidence it will live on after you leave? Is your culture an asset that contributes to your valuation?

To create a valuable and transferable culture, Pat recommends you hire people who embody your company’s core values. The moment Pat mentioned “core values”  my eyes rolled. I tried implementing core values in my previous company and it was a waste of time. In fact, sometimes I think we all simultaneously read Good To Great and Built To Last and plastered our offices with some variation of:

Integrity
Teamwork
Honesty
Balance
Innovation
Respect

These words are so over-used they are neither meaningful to employees nor differentiating. They are essentially wallpaper.

Before I could protest, Pat pre-empted me saying that Jim Collins’ idea is sound but most people implemented it badly. We picked too many over-used clichés as values describing what we wanted to be, instead of who we already are.

Pat shared the story of a Fortune 500 CEO who wanted “sense of urgency” as one of their core values because he wanted to give his complacent management team a kick start. He figured by using “sense of urgency” as a core value, they might get some. Pat urged the CEO to discover what his business stands for today, not what they aspire to be in the future.

At Southwest Airlines, one of their core values is to operate with a sense of humour and they won’t hire anyone – even for the most technical jobs – without one. They don’t want to be funny in the future for some strategic reason, it is part of who Southwest is today.

In speaking with Pat, the penny finally dropped for me on core values. To create a valuable, transferable culture, I should have picked two things that defined our company’s exiting personality and used those values as hiring, managing and promoting criteria. I wonder how many other entrepreneurs took Jim Collins’ idea and butchered the implementation like I did.

I’ll use my Twitter feed (@JohnWarrillow) to let you know when the full interview with Pat about building a transferable culture comes out.  In the mean time, please let me know what you think. Does a company’s core values belong on the balance sheet?

Here are some new articles for the week on building a sellable business:

One dominant customer scares investors away

~ published September 14, 2010 the Globe and Mail

Whenever one customer wields too much influence over your business, your value in the eyes of investors and buyers will be reduced.

If that customer happens to be a government, some investors may shun your company altogether. » more

If owner’s a dictator, company’s value suffers

~ published September15, 2010 the Globe and Mail

Perry Miele’s firm, Beringer Capital, is usually in the business of selling companies on behalf of their owners, but Beringer also buys businesses as investments in the hopes of nurturing and growing them.

I asked Mr. Miele, Beringer’s chairman, to put on his buyer’s hat and share an example of a company he was interested in but ultimately walked away from. I wanted to understand what caused him to get cold feet when the shoe was on the other foot. » more

Trader Joe’s flirts with being bigger over better

~ published September 16, 2010 the Globe and Mail

Trader Joe’s — the hipster food retailer popular on both coasts of the United States — is, according to Fortune magazine, at a troubled crossroads: If it continues to grow, it may lose what makes it special.

Whether you prioritize bigger over better has a lot to do with your ultimate goal for your business. » more

Has This CEO Earned Her $2,645/Night Hotel Room?

~ published September 16, 2010 BNET

Are you using your company to fund your lifestyle?

Imagine a business owner who occasionally treats herself to a night at the Ritz-Carlton when she travels to San Francisco for business. Her club room costs her $529 per night, but she figures she has earned it. She can run the cost through her business; it won’t even be a blip on her expenses for the month. »more

One of the things I like best about writing is the chance to interview interesting entrepreneurs. This week was exceptional as I chatted with Seth Godin, the author of 12 bestsellers and Gary Vaynerchuk of “Crush It!” fame.  Below are some of the highlights of our conversations on building a valuable company.

Seth Says….

I asked Seth about his book The Dip which describes the loss of energy entrepreneurs feel as the honeymoon period of starting a business gives way to the long slog of actually building a company someone would buy.

Seth shared a little known story of a business he quit just before it would have been sellable. He used to publish a directory of law firms and he got tired of the business when things got tough and punted which he describes as a “big mistake”.

After the directory business, Seth went on to create Yoyodyne, which was ultimately acquired by Yahoo! in 1998. Seth lasted a year at Yahoo! before leaving to write books and start Squidoo.

I asked Seth for his thoughts on differentiating between being in a hopeless business and a natural dip. His advice was to find other milestones that suggest you’re not just riding a dead horse. For example, despite almost missing payroll a few times, Seth knew he was on to something with Yoyodyne because his contract value kept going up; from ten thousand dollar projects to hundred thousand dollar projects to finally landing some seven figure deals. So despite troubles in other areas of the business, his average contract value was a solid indicator that things would improve at Yoyodyne.

I’ll let you know when the full article with the working title “Seth Godin: building a valuable business without losing your soul” comes out in the next few weeks.

Gary V…

As if chatting with Seth wasn’t enough, I also got a chance to talk one-on-one with Gary Vaynerchuk for a story I’m writing on the perils of building a personal brand that eclipses your business’ brand.

By way of some background, “Gary V” —  as he is known by his fans — started in business working for his Dad’s liquor store. He noticed an opportunity to sell wine to novices and among other things created a video blog called Wine Library TV. Gary promoted his new show through Facebook and Twitter and ultimately became one of the first entrepreneurs to capitalize on the economic potential of social media.  He then wrote the book Crush It! to reveal some of his social media wisdom and it became a New York Times Bestseller.

I still have to finish the article, but one factoid I thought you’d like was about the value of Gary’s wine business.  According to Gary, the typical alcohol retailer sells for thirty five cents per dollar of revenue (in other words, a store generating $10 million in annual sales would be worth around $3.5 million). In contrast, and as a testament to his marketing savvy, Gary has been offered two dollars per dollar of revenue for his company. It just goes to show what hype and savvy marketing can do for your valuation.

I’d like to include some quotes from other entrepreneurs who have grappled with the same issue in the story so if you have an opinion on how building a personal brand at the expense of your company’s brand effects your valuation, please use the comments section below.

I’ll post the Seth and Gary V interviews to my Twitter feed @JohnWarrillow in the next week or so. In the mean time, here are a couple of fresh articles from this week on creating a business you can sell:

Ready to sell a business? Don’t make this mistake

~ published September 7, 2010 The Globe and Mail

Recently I wrote that the private equity company Riverside Group closed only 15 of the 4,228 acquisitions it considered last year.

Why such a high failure rate?

“The number one reason deals fall apart is missing your numbers,” says the chairman of Beringer Capital, Perry Miele, who makes his living buying, selling and occasionally investing in companies in the marketing, communications and media industry.   »more

Why this profitable company failed to sell

~ published September 8, 2010 The Globe and Mail

A top-line growth rate will garner interest in your company from potential buyers, but if you buy that growth with lower margins, you may end up sabotaging your deal.

The first part of this two-part series looked at why so many acquisitions fall apart. As an example, private equity giant Riverside Group closed just 15 of the 4,228 deals it worked on last year. »more

How an Inc. 500 winner lost everything

~ published September 9, 2010 The Globe and Mail

Jere Thompson Jr. sells electricity. A lot of it.

With the help of 70,000 independent agents, Mr. Thompson has built Ambit Energy into the fastest-growing private company in the United States, according to Inc. magazine’s 2010 rankings.  »more

Decoding the Secret Language of Angels, VCs, and Eric Schmidt

~ published September 9, 2010 BNET

Whether you’re a start-up looking for Uncle Oliver to give you some love money, a technology company seeking a venture round, or a growth business hoping to get noticed by Google CEO, Eric Schmidt, you need to know the language deal makers use when making investments and buying companies.  »more