Real Exit vs. Fake Exit: The Truth Behind Your Business Legacy

Real Exit vs. Fake Exit: The Truth Behind Your Business Legacy

The journey of building and eventually exiting your boutique professional service firm is a significant part of your entrepreneurial story. As founders, it’s important to distinguish between a real exit and a fake exit to ensure that your career trajectory aligns with your values and aspirations. In this C54 Insights blog post, we’re going to shed light on the stark contrast between these two paths, so you can make informed decisions for your future.

Real Exit: A Testament to Growth and Success

A real exit is the result of years of hard work, dedication, and unwavering commitment to your boutique professional service firm. It’s a journey that’s characterized by the following elements:

    1. Steady Growth: You’ve meticulously built a great firm that creates high-paying jobs for loyal employees and leaves clients highly satisfied. Your firm’s quality attracts sophisticated buyers who see immense value in your business.
    2. Value Creation Plan: The buyer comes armed with a well-thought-out value creation plan, demonstrating how your firm can achieve new heights under different ownership. This plan aligns with your vision for your employees and clients, ensuring a smooth transition.
    3. Transparent Terms: A real exit is marked by transparency. You openly share the price and terms of the deal, recognizing the accomplishments of your team. You do this to establish credibility and substantiate your track record as you plan for your future endeavors.

Fake Exit: A Mirage of Success

On the other hand, a fake exit is a different narrative altogether:

    1. Stagnation: Your firm struggles to grow beyond a certain point, and a buyer comes along, offering an escape from the challenges of running the business. This kind of exit may seem appealing on the surface, but it’s a warning sign.
    2. Secretive Terms: The terms of the deal are shrouded in secrecy. There’s a reason for this: the terms are often embarrassing for the founder. Fake exits may involve little to no cash at closing, multi-year earn outs, low purchase prices, and heavy restrictions like non-competes and non-solicitations. The buyer’s agreement to keep these terms confidential is a closing technique that allows the founder to save face.

The Consequences of a Fake Exit

Choosing a fake exit might seem like a way to bolster your resume, but it can ultimately hurt you more than it helps. Here’s why:

    1. Honesty Matters: Most founders embark on multiple ventures throughout their lives. If your firm didn’t achieve a real exit, it’s essential to be honest about it. Learning from your mistakes and being transparent about past experiences will better equip you for success in your next endeavor.
    2. Building Credibility: By acknowledging your firm’s challenges and setbacks, you’re not only demonstrating integrity but also building credibility. This credibility will serve as a solid foundation for your future ventures, making it easier to garner trust and support.

In conclusion, the path you choose when exiting your boutique professional service firm speaks volumes about your values and long-term goals. A real exit is a testament to your achievements and sets the stage for a brighter future. In contrast, a fake exit, marked by secrecy and unfulfilled promises, can hinder your progress and damage your reputation.

At Collective 54, we encourage our members to strive for real exits and to embrace the valuable lessons that come from both successes and failures. Join our mastermind community to gain access to a network of like-minded founders and invaluable insights that can help you navigate your entrepreneurial journey successfully.

Remember, your legacy as a founder is shaped by your actions and decisions. Choose the path that aligns with your vision for the future, and together, we can achieve great things.

How Founder Compensation Changes as a Professional Service Firm Grows Up

How Founder Compensation Changes as a Professional Service Firm Grows Up

As the founder of a boutique professional service firm, you’ve embarked on a unique journey filled with challenges and opportunities. In my book, “The Boutique: How to Start, Scale, and Sell a Professional Service Firm,” I introduced a framework that outlines the three key stages in the lifecycle of a small service firm: Grow, Scale, and Exit. Today, we’ll explore how your compensation as the Founder changes as your firm evolves through these stages.

    1. The Growth Stage: Founders with a Job, Not a Firm

In the early days of your firm, you’re in the Grow stage. During this phase, you’re the primary driver of your firm’s success. You’re not just the founder; you’re also the chief salesperson, project manager, and service provider. In essence, you have a job within your firm.

At this stage, it’s common for founders to pay themselves a salary. Why? Because your primary focus is on selling and delivering work for clients. Your role as an operator is critical, and the salary compensates you for your time and expertise. It ensures your livelihood as you lay the foundation for your firm’s future growth.

The correct amount of salary is best determined by the market. In other words, if you hired someone to perform your duties, what would you have to pay him? The free market determines salary levels. The Founder should pay himself the equivalent.

    1. The Scale Stage: Juggling Two Roles as Founder

As your service firm progresses into the Scale stage, things start to change. You’ve grown beyond being just a service provider; you’re now also an owner who’s actively working on building the firm. This phase is marked by a dual role: operator and owner.

In addition to your salary, you may begin to receive shareholder distributions. These distributions represent the second part of your compensation. While your salary compensates you for your role as an operator, shareholder distributions compensates you for your role as an owner. They reward you for your efforts in growing the firm as a business entity, not just as a practitioner.

The correct amount of distributions is best determined by your working capital needs. Distributions are paid to shareholders out of excess profit. Excess profit is profit more than the working capital needed to run the firm. For example, your working capital requirement might be 6 months of payroll in cash in the bank. Anything cash generated beyond that is considered excess and should be distributed to the Founder in the form of owner distributions.

    1. The Exit Stage: Transitioning to Full Ownership

As your firm matures, it eventually reaches the Exit stage. During this phase, you’ve successfully transitioned from being a hands-on operator to a full-fledged owner. You’ve replaced yourself in the day-to-day operations and are now focusing solely on strategic initiatives that increase the enterprise value of the firm. 

At this point, your compensation structure undergoes a significant change. You no longer pay yourself a salary for your operational role because you’ve delegated those responsibilities to others. Instead, your compensation solely relies on shareholder distributions. This reflects your position as an owner who benefits directly from the firm’s financial success. The salary you once paid yourself can now be redirected to support the new team members who have taken over your operational responsibilities.

And at this stage, the Founder has a critical decision to make. Should he sell the firm, or should he continue to own it? A Founder should sell the firm if there is a buyer willing to pay him a premium for the future distribution stream. The Founder should continue to own the firm if the future distribution stream is larger than what a buyer is willing to pay for it. For example, let’s say your firm is paying you $5 million in annual distributions, and a buyer offers you $20 million to buy your firm. You would accept, or decline, this offer based on whether you feel collecting 4 years of distributions upfront today is a good decision.

Join the Collective 54 Mastermind Community

As you navigate these stages of your service firm’s lifecycle, it’s crucial to have access to a supportive community that understands the unique challenges you face as a founder. That’s why I invite you to consider becoming a member of the Collective 54 Mastermind Community.

In our community, you’ll connect with fellow founders who have walked the same path, gain access to invaluable resources, and receive expert guidance to help you successfully navigate each stage of your firm’s journey. You’ll have the opportunity to learn from experienced professionals and accelerate your firm’s growth and success.

Join us at Collective 54 and take your professional service firm to new heights. Together, we’ll help you master the art of growing, scaling, and ultimately exiting your boutique firm, all while optimizing your compensation along the way.

To learn more about Collective 54 and how we can support you on your journey, visit our website or reach out to our team today. Your fellow founders are waiting to welcome you into our thriving community.

The True Cost of Self-Publishing: Why It’s Costing You More Than You Think

The True Cost of Self-Publishing: Why It’s Costing You More Than You Think

In the competitive landscape of boutique professional services, it’s crucial to elevate your status beyond that of a consultant to become recognized as the foremost authority in your niche. By positioning yourself as an authority, you can unlock new opportunities and take your boutique service firm to greater heights.

However, the journey to becoming an authority is nuanced and requires strategic maneuvering. A cornerstone of this transition is authorship. Publishing a book is more than an achievement; it’s a business card etched with the depth of your expertise. It transforms perceptions, cements your status as an industry leader, and opens doors to unparalleled professional opportunities.

The Path to Publishing

For most business owners, the viable paths to authorship are self-publishing or hybrid publishing.  Self-publishing, with its promise of control and lower upfront costs, often overshadows a critical factor: the hidden, true cost of your time. For busy professionals, especially those billing by the hour or deeply invested in scaling their business, understanding this cost is crucial. The reality is that the journey of self-publishing can demand an astronomical amount of your most finite resource—time. This investment often ends up being counterproductive, detracting from your core business activities and, ultimately, costing more than the monetary savings it promises. Let’s explore why spending more to partner with a hybrid publisher isn’t just a matter of convenience but a strategic investment in your future.

The Unseen Expense: Time Equals Money

 For professionals whose days are already stretched thin, every hour counts. The appeal of self-publishing is understandable: complete control over your book’s content, design, and marketing strategy. However, this autonomy comes at a steep price, requiring you to become a jack-of-all-trades in the publishing industry—a field far removed from most professionals’ areas of expertise. The learning curve is steep, and the tasks involved, from writing and editing to design, formatting, and marketing, are incredibly time-consuming.

Imagine the hours spent drafting, revising, learning design software, understanding distribution channels, and devising a marketing plan. Each of these steps is crucial and demands attention to detail. The time commitment for self-publishing a book can easily range from 340 to 540 hours. For a professional whose hourly rate is, let’s say, $200, the cost of self-publishing in lost income alone could range from $68,000 to $108,000—a figure that far surpasses the financial investment required to engage a hybrid publisher.

Moreover, this time investment diverts your focus from your primary business, potentially hindering growth and limiting income. The opportunity cost of self-publishing is not just measured in lost hours but in lost opportunities for networking, client work, and business development.

Leveraging Hybrid Publishing: A Strategic Investment

Choosing to work with a hybrid publisher is an investment in efficiency, quality, and expertise. Hybrid publishers streamline the publishing process, significantly reducing the time you need to invest. By taking on the heavy lifting of writing, editing, designing, and marketing, they free you to focus on your business. Consider the alternative scenario with a hybrid publisher: your active involvement might be reduced to around 30 to 60 hours, primarily in initial interviews, content reviews, and strategic marketing discussions. This not only ensures that the book accurately reflects your vision and expertise but also allows you to maintain your professional focus where it belongs—on your business and clients.

Conclusion: The Cost of Doing Business

 In the final analysis, the decision to self-publish or partner with a hybrid publisher should be informed by a clear understanding of the true costs involved. For busy professionals, the apparent savings of self-publishing are quickly overshadowed by the significant time investment and its impact on their business and income. Hybrid publishing, while requiring a monetary investment, offers a strategic advantage. It ensures that your book – your key to being a thought leader – is crafted with professional precision, without sacrificing your most valuable asset: time.

As you consider the path to publishing your book, remember that the choice isn’t just about upfront cost, but about making a smart investment in your professional future.  If you’re interested in exploring more about how our hybrid publishing approach can help streamline your journey to authorship, we invite you to get in touch with us.  You can reach out to me directly at [email protected].  Or head over to our website (https://performancepublishinggroup.com/) to schedule a strategy call.  We’re here to help you make a smart investment in your professional future.

Finding the Sweet Spot: Determining the Right Size for Your Boutique Professional Service Firm

Finding the Sweet Spot: Determining the Right Size for Your Boutique Professional Service Firm

Dear Collective 54 Insights Subscribers,

In boutique professional service firms, there’s often a tug of war between those who chase relentless growth and those who prefer a more cautious, risk-averse approach. But finding the optimal size for your firm is essential for long-term success and personal fulfillment. In this article, we’ll explore the three critical factors that can help you determine the right size for your boutique professional service firm.

    1. Define Your Income Goal: Your income goal serves as the cornerstone for building your firm. Start by asking yourself, “How much money do I want to make?” This figure will enable you to reverse engineer your financial targets. Establish a profit target that aligns with your desired income and calculate the revenue required to meet that goal. Hint: “more” is never the correct answer. Put a dollar figure on the income goal.

For example, if your income goal is $500,000 per year and you aim for a 20% profit margin, your firm needs to generate $2.5 million in revenue. This simple equation allows you to define the size of your firm based on your income aspirations.

    1. Assess Your Workload Tolerance: Your firm’s size is intrinsically linked to how hard you’re willing to work. Consider the trade-off between the size of your firm and the amount of effort you’re willing to invest. A founder striving for a $100 million firm will undoubtedly work ten times harder than someone aiming for a $10 million firm. Hint: no one ever said on their death bed “I wish I spent more time at the office.”

For example, we all have the same 24 hours in a day, seven days in a week, and 52 weeks in a year. Reflect on how much of this precious time you’re willing to dedicate to work. Your desired workload will directly impact the scale and growth trajectory of your firm.

    1. Determine Your Impact: The size of your firm also influences the number of lives you can touch. Smaller firms typically have a limited client list and a smaller employee roster, which can limit their reach. Conversely, larger firms often serve a broader client base and employ more people, allowing for an opportunity to touch more lives.

For example, let’s compare my time as the founder of SBI and Collective 54. During my time at SBI, with a small client roster and a limited employee base, I touched a few lives intimately. However, at Collective 54, with hundreds of members in the community, I am making an outsized impact by touching many lives. While at SBI, I was driven by money, not impact, and my approach to sizing my firm reflected that. I purposedly chose a business model that had very few clients with each client contributing large profits. In contrast, today I am driven by touching as many people’s lives as I can, and therefore, my approach to sizing Collective 54 reflects this. I have chosen a business model based on lots of members with each member contributing small profits, just enough to invest in the community. I am optimizing for impact, not money. And this dictates the optimum size of Collective 54.  As you can, by comparing these two examples, the optimum size of your firm is determined by the goals of the Founder. You.

In conclusion, determining the right size for your boutique professional service firm is a strategic decision influenced by your income goals, your willingness to work, and the level of impact you wish to achieve. Finding the balance between these factors is crucial for your success and satisfaction as a founder.

If you’re ready to explore this further and join a community of like-minded founders who can support you on your journey, we invite you to apply for membership at Collective 54. Together, we can help you define and achieve the perfect size for your boutique professional service firm.

Don’t miss this opportunity to grow smarter, not just bigger. Apply to Collective 54 today and embark on a path towards a more fulfilling and prosperous future for you and your firm.

De-coding Poor Margin & Profitability: The Dreaded Ops Black Hole

De-coding Poor Margin & Profitability: The Dreaded Ops Black Hole

The root-cause to declining margins & profitability lies in the deep, dark, spreadsheet-laden abyss of your project financials & resourcing…  “The Operations black hole”. A place where hard-won project dollars shall never, ever, return from… and high-flying consulting space-ships can disappear forever.

Most professional service firms don’t even know the black hole exists. Occasionally they spot it in their rear-view mirror, months after engagements are finished, and in the distance they faintly spot all the $margin they’d expected to make, vaporized by scope-creep, over-delivery & poor pricing.

The gut-reaction is to blame the three main protagonists…

    1. It’s the clients fault – they always push for more, get our team on the back-foot & drag out a project. Problem is – if you’d spotted all of that earlier, you could’ve stopped it… or better still, $charged them!
    2. Or is it the delivery teams fault… I mean, where have all those budgeted hours gone? What side-of-desk extras weren’t subject to a change order? If time was tracked & utilization monitored – you’d have no surprises.
    3. So it must be sales? They over-promise, knock down the price to get the deal… that’s why there’s never any margin left… and they get all the commission & bonuses! Sorry to burst the last bubble, but if you need a standardized offering, based on proven previous project profitability (I wanted to add “productization”, but 4 P’s is enough (just ask E. Jerome. McCarthy)).

So none of them are to blame… and you can’t really point fingers at the resourcing team either, because they’re trying to construct your space-ship, designed to navigate the “operations black hole”, out of plastic, sticky tape & glue… I’m not an intergalactic engineer, but even I know you’ve got to have the right tools, in the hands of the right people, if you want a job done right.

So how do you navigate the Ops black hole?

    1. Get people to accurately track their billable time, at least at client AND project level. Bonus insights coming your way if they track to deliverable & non-billable time too.
    2. Use the time captured data, to start analyzing live projects against their existing budget… and tightly manage any potential scope-creep & over-delivery in real-time. This will surface some scary results. Scary good, scary bad – part of the process!
    3. As you now start to build a bank of delivered projects, start to review which of those generated the highest $gross margin. Look at your charge out & cost rates too.
    4. Analyze the same projects & client work, but with your $cash flow hat on… which enables you to best manage your WIP, speed up billing & cash collection?
    5. Build increasingly repeatable propositions & all new proposals around the best-performing projects. You’ll have solid pricing, billing & resourcing profiles by now. 
    6. When sales say they need prices dropped on future opportunities, get them to evidence from past client work, their proposal delivers the $margin you need.
    7. When delivery say they need more time or people, get them to do similar!
    8. Repeat steps 1-7, improving your process incrementally.

Successfully positioning, incentivizing & motivating people to execute on this plan, will enable you to course-correct from impending ops-black-hole doom, to a spaceship back on-track, with a crew all aligned too. Here’s to killer $margins & profitability for 2024 & beyond. Continued success! 

Interested in exploring these concepts further? I’m just a click away—let’s connect!

Seven Signs Your Boutique Professional Service Firm Is an Undifferentiated Body Shop

Seven Signs Your Boutique Professional Service Firm Is an Undifferentiated Body Shop

Hey there, fellow founders of small service firms in North America! I’m Greg Alexander, and today we’re going to delve into a critical topic that might just change the trajectory of your business. We’re going to talk about the seven signs that your boutique professional service firm is at risk of becoming an undifferentiated body shop.

But first, let me introduce you to Collective 54 – the first, and only, community for boutique professional service firm leaders like you. Our mission is to help firms like yours thrive and avoid the pitfalls of becoming just another commodity in the market. Come check us out at www.collective54.com.

So, let’s dive right in and explore the signs that could be holding your firm back from greatness.

    1. Discounting Fees:

If you find yourself constantly lowering your fees to win business, you might be heading down the undifferentiated path. Competing solely on price erodes your value proposition and can lead to a race to the bottom.

Action item: take a fresh look at your value proposition. Is your firm the only place a prospect can get the kind of help you provide?

    1. Modifying Terms:

Are you bending over backward to accommodate clients’ payment terms or contractual agreements? If you’re too flexible on your terms, it can signal a lack of confidence in your unique offering.

Action item: make your contracts noncancelable and nonrefundable. Prospects who are unwilling to accept these terms are not in your ideal client profile, and do not value what you offer enough.

    1. Accepting Unconventional Invoicing Requests:

When clients request invoicing in ways that don’t align with your standard procedures, and you say yes without question, you risk becoming a mere service provider rather than a trusted advisor.

Action item: get paid in advance. No payment, no work. If a client will not pay you in advance, they do not believe in you and are hedging their risk.

    1. Providing Lots of Free Work:

Do you find yourself investing significant time and resources into potential clients before they commit to an engagement? This can lead to a drain on your profitability and an imbalance in your client relationships.

Action item: when you go to the doctor, do you pay for the diagnosis, or do they give it away for free? They run lots of tests, diagnose your symptoms, and you pay for this expertise. Why? It is valuable. Fast follow the medical profession.

    1. Letting the Client Define the Problem:

If you’re always allowing clients to dictate the problem to be solved without offering your expertise and insights, you risk becoming a reactionary service provider rather than a proactive advisor.

Action item: 50% of solving a problem is naming and framing it correctly. Prospects frame problems incorrectly often and send you off to build an inconsequential solution. Insist in being involved in problem definition.

    1. Letting the Client Design the Solutions:

Allowing clients to design the solutions themselves can diminish your role to that of a mere pair of hands, devoid of the strategic value you should be providing.

Action item: a prospect looking for an extra pair of hands to augment their overworked internal team are client to avoid. This is the worst possible position for a boutique professional service firm to be in.

    1. Lacking a Point of View:

Lastly, if your firm just tells clients what they want to hear without offering a unique perspective or point of view, you’re on a slippery slope to becoming an undifferentiated body shop.

Action item: thoroughly research each prospects problem, collecting and analyzing data and providing to the prospect a unique point of view backed up with supporting evidence.

The Consequences of Being an Undifferentiated Body Shop:

Now, let’s discuss the grim consequences of letting your boutique professional service firm fall into the undifferentiated body shop trap.

First and foremost, as a founder, you’ll find yourself working tirelessly to win business, only to see your profit margins squeezed by constant fee discounting. This relentless effort will leave you exhausted and frustrated.

Secondly, the financial picture of your firm may not be as rosy as you’d like. Undifferentiated body shops often struggle to command premium prices, resulting in lower revenue and profitability.

Lastly, your job satisfaction and sense of purpose may dwindle as you become just another service provider, lacking the excitement and fulfillment that comes from being a trusted advisor and problem-solver.

The good news is that it’s not too late to avoid these pitfalls and transform your boutique professional service firm into a thriving, differentiated business. Collective 54 is here to guide you, connect you with like-minded founders, and provide you with the tools and strategies you need to succeed.

Don’t let your firm become just another undifferentiated body shop. Join Collective 54 today, and let’s work together to elevate your business to new heights of success!

From Consultant to Authority: Unleash Your Boutique Service Firm’s True Potential

From Consultant to Authority: Unleash Your Boutique Service Firm’s True Potential

In boutique professional services, there’s a crucial distinction that can significantly impact the growth and scalability of your firm. This distinction lies in the roles of being a “Consultant” and an “Authority.” Let’s delve into the definitions and implications of these terms, with examples from within the boutique professional service industry segment.

Let’s start with a basic definition for each.

    • A consultant typically offers expertise, advice, and services to clients based on their knowledge and experience. They often work on a project or retainer basis, billing clients for their time and deliverables.
    • An authority, on the other hand, is recognized as an industry leader and trusted expert in a specific niche or domain. They have a deep understanding of their field and are sought after for their unique insights and perspective. For example, my friend Geoff Smart is the world’s foremost authority on hiring A players. As a result, he built a firm with approximately 175 people and $100 million in revenue from scratch in 1995.

Here is a simple example applying these two definitions to the management consulting segment to illustrate.

    • Consultant: A management consultant may provide strategic advice and project management services to a client looking to optimize their business processes.
    • Authority: An authority in management consulting might be a renowned thought leader who has authored influential books on leadership and innovation, attracting clients seeking transformative solutions.

This subtle, but important distinction has considerable implications for Founders of small service firms. Here are just a few to consider:

    • Increased Earnings Potential
    • Authorities can command higher fees for their services due to their specialized expertise and reputation. Clients are willing to pay a premium for their unique insights and proven results. Most don’t charge by the hour, never negotiate fees, and always get paid in advance.

For instance, a consultant in a marketing agency offering general digital marketing services may charge standard rates for running ad campaigns. An authority in the marketing industry, known for groundbreaking marketing strategies and case studies, can charge premium rates for exclusive consulting services.

    • Scalability:
      • Authorities have a more scalable business model as clients often seek them out, reducing the need for constant client acquisition efforts. Their reputation draws a steady stream of clients. Authorities have more demand than supply and cherry pick which clients and projects to work on.

For instance, a consultant in a software development firm might need to actively market their services to secure new projects continuously.

In contrast, an authority in software development, renowned for pioneering coding techniques, can maintain a waiting list of clients eager to work with them.

    • Exit Strategy:
      • Authorities possess intellectual capital and a strong client base, making them attractive to potential acquirers or investors, making an exit achievable. However, most authorities don’t sell their firms because they are growing fast and generating piles of cash.

For instance, a systems integration firm staffed with consultants may have a successful practice but may find it challenging to sell their firm for there are many just like it. An authority in systems integration, known for developing groundbreaking integration solutions, can attract acquisition offers from firms looking to enhance their capabilities.

If you want to migrate from a firm staffed with consultants to a firm staffed with authorities, and reap the benefits, here is an outline of the steps to take.

    1. Narrow Your Niche: Choose a specific niche or domain within your field where you can develop deep expertise. Ask yourself: “In what field do I know more than anyone else?”
    2. Outlearn the Competition: Invest in continuous learning and stay updated with the latest trends, technologies, and developments in your chosen niche. Ask yourself: “How can I learn at a rate 10x that of others in my niche?”
    3. Create Unique Content: Start sharing your knowledge and insights through various channels like books, blogs, articles, podcasts, webinars, or videos. Ask yourself: “How can I create THE newsletter that is a must read never to be missed publication in my niche?”
    4. Build Your Presence: Establish a strong online presence by developing a professional website and social media profiles optimized for search engines, social media platforms, and large language models. Ask yourself: “When a prospect finds me online do they say ‘oh my gosh. Where has this been all my life?”
    5. Network and Collaborate: Connect with other authorities and influencers in your niche. Collaborate on projects, co-author articles, or participate in panel discussions. Ask yourself: “Who are the people in my niche that I respect and want to be associated with? How do I become a valuable thought partner to them?”
    6. Give Things Away: Provide free resources, tools, or templates that demonstrate your expertise and help potential clients or followers. This showcases your commitment to helping others and establishes trust. Clients will pay when they need to apply the tools. Ask yourself: “How am I going to overcome my fear of giving away my secret sauce?”
    7. Collect and Showcase Testimonials: Encourage satisfied clients to provide testimonials or reviews about their positive experiences with your services. Display these testimonials prominently on your website to build trust. Ask yourself: “which clients are my best sales people and how do I get them in front of prospects to tell my story?”
    8. Speak: Seek opportunities to speak at conferences, webinars, or podcasts related to your niche. Sharing your insights as a speaker can further solidify your authority status. Ask yourself: “If I am truly the authority in this niche, how can someone have a conference without me on the agenda?”
    9. Think in Years Not Days/Weeks/Months: Becoming an authority takes time and consistent effort. Continue to produce high-quality content, engage with your audience, and refine your expertise over the years. Ask yourself: “Am I behaving like a get rich quick scam artist or an authority built to last?”
    10. Adjust: Periodically assess your progress and adjust your strategies as needed. Pay attention to the feedback you receive from your audience and adapt accordingly. Ask yourself: “Is my skin to thin?”

In conclusion, understanding the difference between being a consultant and an authority is crucial for founders of boutique service firms. While both roles have their merits, becoming an authority can lead to higher earnings, easier scalability, and a more promising exit strategy. By positioning yourself as an authority in your niche, you can unlock new opportunities and take your boutique service firm to greater heights.

Wanted to learn from those who evolved from consultant to authority? Join Collective 54, a mastermind community filled with those who have made this change. Apply here.

 

Tips for Preventing Founder Burnout in a Services Firm

Tips for Preventing Founder Burnout in a Services Firm

Play Video

Starting your firm takes a lot of courage, and it can feel like starting it is enough, but once you start scaling ambitions expand tremendously. And once you start asking yourself how big you can grow your business, burnout becomes a real threat.

That’s why we’re highlighting tips to prevent burnout. This video will help you explore options for intentionally scaling your firm without spreading yourself too thin.

In this video, you’ll learn:
– The true value of time tracking in professional services
– The benefits of building a task force
– The difference between growth of revenue and growth of headcount

The Art of Silence: 6 Reasons Not to Tell Your Employees About the Pending Sale of Your Firm

The Art of Silence: 6 Reasons Not to Tell Your Employees About the Pending Sale of Your Firm

Hey there, fellow founders of boutique professional service firms. If you’re contemplating selling your firm, you’re undoubtedly entering into a complex and potentially game-changing process. It’s a decision that requires careful planning and execution, and one of the crucial questions on your mind might be whether or not to inform your employees about the pending sale. In this blog post, we’re exploring the six compelling reasons why you should consider keeping your cards close to your chest when it comes to sharing this news with your team.

    1. Deals Often Fall Apart During Due Diligence

Let’s face it, folks – deals in the world of business can be as unpredictable as a roll of the dice. Many a promising transaction has crumbled during the due diligence phase for various reasons. Telling your employees about a sale that might not even go through can create unnecessary stress and anxiety. It’s better to maintain business as usual until you have a signed agreement in hand.

2. Employee Distraction Can Lead to a Dip in Results

When the word gets out about a pending sale, employees may start to wonder about their job security. This uncertainty can lead to a dip in their performance and focus, which is the last thing you need during a critical phase like a sale. Such distractions can also undermine the confidence of potential acquirers, making them question the stability and viability of your firm.

3. Loose Lips Can Sink Ships

Employees are a talkative bunch, and news of a pending sale can easily leak into the industry grapevine. Competitors might seize this information to their advantage, and even your clients might pause their relationships with you, uncertain about the firm’s future. Keeping the sale under wraps can protect your business from unnecessary turbulence.

4. Deals Morph During Due Diligence

During the due diligence process, deals often undergo significant changes. These changes can affect who stays, who goes, and the overall structure of the transaction. Until the final details are ironed out, it’s prudent to maintain confidentiality to avoid unnecessary confusion and anxiety among your employees.

5. You’ll Need Everyone On Board to Hit Your Earn Out

If your sale includes an earn-out clause, it’s crucial to keep your team motivated and engaged. Prematurely disclosing the sale can lead to a spike in turnover, with key employees potentially leaving before the deal is finalized. It’s essential to maintain a cohesive and committed team to meet your earn-out goals.

6. You Might Decide Not to Sell

Finally, and importantly, founders have a tendency to change their minds at the eleventh hour. The allure of selling might wane as the details become clearer, or unforeseen circumstances might arise. If you’ve already told your employees about the sale, you’ll face a difficult and potentially disruptive situation if you decide to back out.

In Conclusion: Maintain the Art of Silence

In the world of business, discretion is often your best ally. While transparency with your employees is generally commendable, when it comes to pending sales, it’s often wise to err on the side of caution. Keep these six compelling reasons in mind before prematurely sharing the news with your team.

Remember, a successful sale requires careful planning, strategic thinking, and a well-executed process. Maintain the confidentiality necessary to navigate the complexities of the transaction smoothly. When the time is right, and the deal is firm, you can share the news with your employees, providing them with the stability and reassurance they need to thrive in the transition.

So, dear founders, as you venture into the exciting world of selling your boutique professional service firm, keep these reasons in mind and play your cards close to your chest until the right moment arrives. Your employees will thank you for it, and your potential acquirers will respect your professionalism and discretion.

If you are contemplating a sale of your firm, consider joining Collective 54 by applying here. You can learn a lot from a community of peers going through the same process as you.

What NOT to do when building a Commercial Sales Engine for your firm

What NOT to do when building a Commercial Sales Engine for your firm

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Building a commercial sales engine doesn’t happen overnight. You need some sort of business development strategy.

Join us as we explore the reality of building a sales function, why it’s important to start today and trust in future results, and perceptions that prevent you from getting it right.

In this video, you’ll learn:
– Why every founder needs to be prepared to go through the experimentation period
– The lag effect that’s present in everything you’re doing now
– Why many founders never make a business development plan
– Strategy vs tactics