(Tracy A. Woodward/THE WASHINGTON POST) - Bill and Denise Medved in the kitchen of their home in Annandale, Va. The couple have turned the Metropolitan Cooking and Entertaining Show into one of the most popular cooking shows in the country.
Unless you are a gifted performer or you win the lottery, there are two basic ways to create wealth. The first is to live beneath your means, save like mad and invest wisely.
The other is to build a business. Build it, create value, reinvest in it and one day you may own a valuable asset.
I am not an entrepreneur, so I beaver away at the first, living frugally and saving in stocks and bonds. (I still believe. What else is there?)
Denise and Bill Medved have followed the second route. They have built the Metropolitan Cooking & Entertaining Show, a consumer trade show that runs this weekend in the Washington Convention Center, into a valuable asset that they may sell for a big payday.
The “show” is an umbrella company for three shows in Washington, Houston and Atlanta. The three events gross $3.2 million and produce a net profit in the $300,000 range — after salaries and health care for eight employees, office space in Annandale, back-office expenses and a smidgen of debt.
Denise and Bill each take around $50,000 in salary, plowing everything back into the business, hoping to defer their payoff until they sell the company — which may be sooner than you think.
“If we were going to sell this right now,” said hard-charging Denise, “we could probably get $4 to $5 million.”
I knew these trade shows could be lucrative — if you do them right. Sheldon Adelson, ranked eighth by Forbes with $21.5 billion, built his fortune from the 1995 sale of the computer trade show Comdex, which he sold to a Japanese company for a personal profit reportedly at $500 million.
The Medveds appear to be doing it right. They have one offer, predicated on financing, that could earn them a personal takeaway of at least $2 million pre-tax.
Denise, 50, and Bill, 56, started the show in 2006 after Denise finished bouncing around the trade-show business and was intent on pursuing her passion for cooking. She wrote a book called “The Tiny Kitchen,” then used her experience in trade-show circles to start the local exhibition.
They own a majority of the show, though they have two investors with significant stakes.
The Medveds’ revenue comes from four primary sources: $1 million worth of tickets at prices ranging from $24.50 to $500 from 25,000 visitors; $500,000 from 360 exhibitors that rent booths to sell everything from kitchen knives to hot sauce; $100,000 in sponsorships; and about $65,000 from book sales. Total is about $1.7 million.
The biggest expense is the six-figure appearance fees paid to cooking stars. This year, Paula Deen, Giada DeLaurentiis and Jacques Pepin will each perform in Washington. The Medveds say those names draw in customers, who spend $2 million buying cheese, pots, pans and much more.
Other costs include $70,000 to rent 80,000 square feet of space in the convention center for five days (three to set up, two for the show); $90,000 for a stage; $100,000 for advertising; and then there is a general contractor who decorates the building.
The Washington show is by far the most lucrative of the three city shows that the Medveds produce, netting around $800,000 after costs.
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