|
Getting your Trinity Audio player ready...
|
COLLECTIVE 54
FOUNDER FIELD NOTE
The Endgame · Exit
Why This Founder Is Buying Recurring Revenue to Become Sellable
A firm that wins blue-chip project work can still go from full to nearly empty in a matter of weeks. That swing is exactly what caps the price a buyer will pay.
This digital experience consultancy punches above its weight, winning execution work that much larger firms chase. Impressive logos. Lumpy revenue.
The founder described the pattern plainly: land a great project, finish it, and without guaranteed follow-on you can be a couple of months from full revenue back to almost none. The answer is not to sell harder. It is to change what the firm is made of.
The plan is to acquire a company that already carries retainer and recurring revenue, so a steady base absorbs the peaks and valleys. Alongside it, quiet discipline: revenue has come down while EBITDA has gone up, and no compensation increase in three years, choosing a healthier base over a bigger top line.
“Acquiring a company that does a lot of execution, but has retainer business will eliminate a lot of the ups and downs we get from a great project.”
Why it matters to you
Buyers and lenders pay for predictability. A lumpy project pipeline, however prestigious, reads as risk and drags your multiple down. Recurring revenue reads as an asset and lifts it. You can build that base slowly through new offerings, or you can buy it. Either way, it is the revenue mix, not the logo quality, that makes a firm worth buying.
Your one thing
What share of your revenue would still be there in 90 days if you sold nothing new? If a buyer looked at your pipeline today, would it read as an asset or a risk?
Collective 54 is where boutique service firm founders go to make more money, scale with less friction, and build a firm worth buying.