Moving Up Market: A Strategic Shift for Boutique Professional Service Firms

Moving Up Market: A Strategic Shift for Boutique Professional Service Firms

In the ever-evolving landscape of professional service firms, one question looms large for boutique firms: How can we move up the market and focus exclusively on strategy work? In this article, we’ll delve into why your firm might want to make this shift and outline a four-step method to successfully transition from implementation to strategy. By the end of this journey, you’ll see why bigger is not necessarily better, but being more profitable is.

Why Move Up Market?

Many boutique professional service firms often find themselves at a crossroads, grappling with the desire to scale and expand. However, in the quest for growth, they frequently fall into the trap of taking on implementation work, diversifying their service offerings, and diluting their unique value proposition. The question to ask is: Is bigger truly better, or is it more profitable to specialize and excel in what you do best?

Moving up market by focusing exclusively on strategy work has several compelling advantages:

    1. Increased Profitability: Strategy work often commands higher fees, leading to more substantial profit margins for your firm. By eliminating the operational overhead associated with implementation, you can boost your bottom line significantly.
    2. Enhanced Reputation: Specializing in strategy work positions your firm as an industry leader in your niche. Clients are more likely to seek your expertise and trust your recommendations when you’re recognized as an authority.
    3. Strategic Relationships: Referring implementation work to trusted partners can lead to mutually beneficial partnerships, expanding your network and access to clients seeking your services.
    4. Focused Growth: Eliminating implementation work allows you to allocate your resources towards enhancing your strategic capabilities, ultimately attracting clients seeking your specific expertise.

Now that we understand the why, let’s explore the how with our four-step method to transition from implementation to strategy:

Step 1: Remove All Mention of Implementation

The first step in your journey is to eliminate any references to implementation from all your communications. Update your website, proposals, statements of work, social media profiles, emails, and any other client-facing materials to emphasize your strategic focus. Consistency in messaging is key to rebranding your firm successfully.

Step 2: Start with Assessment Projects

Begin every new client engagement with an assessment project. Assessments are inherently strategic, offering insights and recommendations without committing to implementation. By leading with assessments, you train your clients to understand your firm’s unique value in providing strategic solutions.

Step 3: Refer Out Implementation Work

While you may still assist clients with implementation, consider forming strategic partnerships or outsourcing implementation tasks to trusted collaborators. This approach allows you to provide comprehensive solutions without the need to perform implementation in-house.

Step 4: Execute a Reduction in Force

To fully commit to your strategic focus, consider restructuring your staff. Lay off employees who primarily handle implementation work. This decision may be challenging but is essential to eliminate the temptation to revert to old practices and maintain your commitment to strategy. If implementation staff remain on the payroll, you will feel compelled to keep them utilized and bring in implementation work. And avoid the common mistake of trying to develop an implementer into a strategist. It more often than not does not work out.

In conclusion, remember that bigger is not always better. Your firm’s profitability and reputation can soar when you focus exclusively on strategy work. Strategy firms often yield higher returns and position themselves as industry leaders, setting them up for long-term success.

If you’re eager to make this pivotal transition and want to learn from peers who have successfully executed this strategy shift, we invite you to join the Collective 54 Mastermind Community. Here, you’ll have the opportunity to connect with like-minded professionals, share experiences, and gain valuable insights to take your boutique professional service firm to new heights.

Join us today, and let’s embark on this journey toward greater profitability, enhanced reputation, and strategic excellence together.

7 Key Diagnostic Questions to Determine If Your Firm Is a Strategy Firm or an Implementation Firm

7 Key Diagnostic Questions to Determine If Your Firm Is a Strategy Firm or an Implementation Firm

Are you wondering whether your boutique professional service firm is a strategy firm or an implementation firm? This crucial distinction can significantly impact your business growth and operational strategy. In this blog post, we will provide you with a comprehensive diagnostic tool to help you identify your firm’s true identity. Knowing whether you’re primarily focused on strategy or implementation is crucial when aiming to scale your operations effectively.

7 Step Diagnostic

    1. External Perception: Have a friend visit your website and ask them if they think you are a strategy firm or an implementation firm. Sometimes, an external perspective can reveal how your firm is perceived in the market.
    2. Billing Breakdown: Examine your billings. What percentage of your total billings come from high bill rate employees (senior strategists) versus low bill rate employees (implementers)? This ratio can indicate your firm’s primary focus.
    3. Client Titles: Review the titles of the clients you market to, sell to, and deliver for. Are they primarily in the C-suite or middle management? High-level client titles often correlate with strategy work.
    4. Project Timeline Analysis: Scrutinize your project plans. What percentage of the project timeline is dedicated to strategy versus implementation? A heavy emphasis on strategy might signal that you are a strategy firm.
    5. Client Questions: Listen to 10 recent Zoom calls that you recorded. Isolate the questions asked by the clients. What percentage of these questions are related to strategy and what percentage are related to implementation? This can provide insights into the nature of your client engagements.
    6. Competitor Analysis: Examine where your existing clients are choosing to spend with your competitors instead of your firm. Are you losing out on strategy work or implementation work? This can highlight areas for improvement.
    7. Delegation Patterns: Investigate whether clients are delegating you down to lower-level employees. If so, to which titles? Do these titles correlate with strategy work or implementation work? Understanding delegation patterns can shed light on your firm’s core competency.

In conclusion, understanding whether your boutique professional service firm is primarily a strategy firm or an implementation firm is crucial for scaling your operations effectively. It is hard(er) to scale a firm that does both. This diagnostic tool will help you gain clarity on your firm’s identity and areas for improvement. If you discover that you’re in the wrong category and want to pivot, consider joining the Collective 54 Mastermind Community. Our community can provide the guidance and resources you need to execute a successful transition. Don’t hesitate to reach out and explore how we can help you navigate this strategic shift in your business.

The Gift & The Curse: Non-Billable Time

The Gift & The Curse: Non-Billable Time

Most firms have hours, days, weeks even – of non-billable time unceremoniously dumped into “admin” every month… or worse, not even recorded at all (but we’ve talked about that before!).

That could be $100’s of thousands of dollars of time on genuine, useful & essential “admin”… or not. Mostly likely “not” to be honest.

Don’t get me wrong – tracking non-billable time as “admin” is a useful starting point on your journey to superior $margins, but a common curse is it often becomes the final destination…

Imagine: You’ve sold in the value of time management across the firm, so your team diligently record everything billable to projects, but then stick the remaining 10-50% (junior > senior) of their week in the “admin” dustbin… you still feel positive, because you can start to analyze utilization, project margin & staff availability (to a degree) …

Not bad.

By doing that though, the curse is cast, because you tell yourself you’ll get on top of the “admin” bucket later… once time-tracking has been fully adopted, when your team grows, or whenever the next excuse you want to tell yourself occurs… and it never, ever, happens.

If you break-down non-billable time from this day forwards, it’ll be the gift that keeps on giving… 

There are, at least, 5 game-changing insights you will gain:

    1. Sales and new business are often a big suck of your most senior (& expensive) people’s time… so many firms commit resource & expense to building relationships, proposals, proof of concepts… ‘Cost of sale’ is often a huge hidden expense in PS firms, who are constantly working on RFPs or bids… so get a handle on which opportunities drive revenue & high margin work, are a sunken cost, or just a complete waste of time.
    1. Continued learning & development is crucial to your key employees, so ensure they track every internal & external training, mentoring session, company insights… so when it comes to their performance review, the hours of education your firm has provided, is well-documented… & given you know their hourly rate, you can put a $dollar value on what you’ve committed to their personal development. 
    1. Intellectual Capital (IC) is huge in PS firms – it’s the secret sauce in your delivery methodology, it’s the value creating documentation, a framework that delivers client results… find out how much $investment is being made into your IC, which feeds your pricing, your value proposition, or reveals it’s under-invested & needs TLC.
    1. Marketing & personal brand will help drive referrals, inbound & your lead-gen machine… and for most PS firms that doesn’t mean huge $spend on Ad campaigns, but getting their people to tell client stories, share industry insight & therefore use their non-billable time in a productive way. Insight into the true cost of your webinar series, eBook or in-person events is often startling.
    1. Admin! After you’ve run a Work Breakdown Structure, you’ll be able to determine what “admin” actually constitutes (pro tip: changes for different people) … updating spreadsheets, creating reports, filling in CRM records… this gives you a clear picture of which “admin” you should automate, outsource, rationalize etc.

Every PS firm is different, but the non-billable time gift is present for all firms to maximize. Avoiding the curse doesn’t have to be Founder-led – whoever wears your “Operations” hat in your firm should be tasked with driving this… but the benefits are huge for founders & your team.

Feel free to reach out to me if you have any questions.

Choosing Between Strategy Work, Implementation Work, or Both: A Founder’s Dilemma

Choosing Between Strategy Work, Implementation Work, or Both: A Founder’s Dilemma

Hello, Collective 54 subscribers, I’m Greg Alexander, and today, we’re diving into a crucial decision many founders of boutique professional service firms face – whether to focus on strategy work, implementation work, or a combination of both. This decision can significantly impact the trajectory of your firm, the types of clients you attract, and your overall satisfaction with your work. Let’s explore the pros and cons of each approach:

Why One Should Do Strategy Work:

    1. Attracts the Best Clients: Offering strategy services often draws higher-caliber clients who value strategic thinking and are willing to pay a premium for your expertise.
    2. Higher Profit Margins: Strategy work typically commands higher hourly rates or project fees, resulting in better profit margins compared to implementation work.
    3. Less Employee Headaches: Strategic projects tend to involve smaller, more specialized teams, reducing the complexity of managing a large workforce.
    4. Lower Client Concentration Risk: By working with a diverse range of clients on strategy, you can mitigate the risk associated with over-reliance on a single client.
    5. More Enjoyable for Some Founders: Many founders find strategy work intellectually stimulating and fulfilling, making it a more enjoyable aspect of their business.

Why Someone Should Not Do Strategy Work:

    1. Stiffer Competition: The allure of strategy work attracts more competitors, making it challenging to stand out in a crowded market.
    2. Longer Sales Cycles: Closing strategy projects often takes longer due to the need for extensive client education and relationship-building.
    3. Inconsistent Revenue: Strategy projects can be sporadic, leading to uneven cash flow, which might not suit all business models.
    4. Less Predictable Workload: Strategy engagements can be less predictable in terms of workload and deadlines, causing stress for some founders.
    5. Potential Client Disappointment: High expectations for strategic outcomes can sometimes lead to client disappointment if results don’t meet their lofty goals.

Why One Should Do Implementation Work:

    1. Steady Client Flow: Implementation work can provide a consistent stream of projects and clients, ensuring a stable cash flow.
    2. Diverse Revenue Streams: Offering implementation services alongside strategy can diversify your revenue streams, reducing dependency on one area.
    3. Loyal Client Relationships: Implementation work often fosters long-term client relationships, leading to repeat business and referrals.
    4. Predictable Workload: Implementation projects usually have well-defined tasks and timelines, providing founders with a predictable workload.
    5. Client Satisfaction: Clients appreciate one-stop shopping, finding it convenient to have both strategy and implementation services under one roof.

Why Someone Should Not Do Implementation Work:

    1. Lower Profit Margins: Implementation work often involves more extensive resources and lower billable rates, resulting in thinner profit margins.
    2. Higher Employee Headaches: Managing larger teams for implementation projects can be more complex and labor-intensive.
    3. Client Concentration Risk: Relying heavily on a few long-term implementation clients can expose your firm to client concentration risk.
    4. Less Enjoyable for Some Founders: Founders who prefer strategic thinking may find implementation work less personally fulfilling.
    5. Intense Competition: The implementation space can also be competitive, especially if your firm lacks unique differentiation.

Why Someone Should Do Both Strategy Work and Implementation Work:

    1. Meeting Client Needs: Offering both services addresses the full spectrum of client needs, creating a holistic client experience.
    2. Higher-Quality Work: Combining strategy and implementation allows for seamless execution of strategic plans, ensuring higher-quality results.
    3. Diverse Client Base: Serving clients in both areas can help balance your client portfolio, reducing concentration risk.
    4. Optimal Profitability: A balanced approach can optimize profitability by leveraging the strengths of each service offering.
    5. Client Convenience: Clients who seek comprehensive solutions appreciate the convenience of obtaining both strategy and implementation services from a single provider.

Why Someone Should Never Do Both Strategy and Implementation Work:

    1. Overwhelming Workload: Juggling both aspects can lead to an overwhelming workload, potentially compromising the quality of your work.
    2. Confusion in Branding: Mixing strategy and implementation services without clear branding can confuse clients and dilute your firm’s identity.
    3. Lack of Focus: Splitting your focus between two distinct areas can hinder your ability to excel in either one.
    4. Resource Drain: Balancing both aspects can strain your resources, including personnel and time.
    5. Limited Differentiation: Without a clear differentiation strategy, you may struggle to stand out in the market compared to firms that specialize.

In conclusion, the decision to focus on strategy work, implementation work, or both is a critical one that should align with your firm’s unique strengths, goals, and client base. Consider your passion, competition, profitability, and client needs when making this choice.

If you’re interested in further discussing this topic and connecting with peers who face similar decisions, I encourage you to join the Collective 54 Mastermind Community. Here, you can gain valuable insights, network with fellow founders, and navigate the complexities of the professional service industry together. Your journey to success awaits!

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.

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.

Tips for Preventing Founder Burnout in a Services Firm

Tips for Preventing Founder Burnout in a Services Firm

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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

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

How to Know the Right Time to Recap or Sell Your Business: An Investor’s Perspective

How to Know the Right Time to Recap or Sell Your Business: An Investor’s Perspective

Imagine you’re in a game where your character has a treasure of immense value, attained through years of sacrifice, risk taking and toil.  The objective of the game is simple – find a buyer for the item and transact at a mutually acceptable price.  Easy, right?  Well, there’s a twist[1]:

    • The buyer’s identity and location are a mystery
    • You can only transact once (i.e. no do-overs)
    • The item’s value fluctuates, and
    • A poorly-timed trade may sentence you to a lifetime of regret and self-loathing

Yikes.  Who would want to play that game?  Well, this mirrors the journey that founders embark upon when contemplating either a recapitalization of their business with a private equity firm partner (a ‘recap’) or the full sale of their business  (an ‘exit’).  Not to worry, there are people and insights that can help across all of the anxiety-laden dimensions of planning a recap or exit.  While the ultimate decision is yours, you are not alone.

Indicators That It’s Time

This piece will focus on timing and is informed by my nearly 20 years of experience as an investor in and seller of businesses.  Interestingly, across the matrix of decisions that a business owner has to make, timing of a recap / exit is one of the more straightforward exercises.  The trick is knowing what indicators to look for.  So, without further ado, here are some signs that the timing might be right:

    1. A comparable business in your industry achieved an appealing valuation. If you see another founder deciding to engage in a recap or exit transaction, it may merit introspection on your own transaction timing.  What’s good about another founder “going first” is that the multiple they sold for will eventually become known in the circles that care about these things[2].  We suggest reaching out to the investment banker(s) that worked on the transaction to learn about what attributes of the other business buyers focused on the most (i.e. the “value drivers”).  If you would like an introduction to one or more investment bankers who have strong qualifications and successful transaction experience working with owners of B2B professional services firms, please email me, and I’ll connect you
    1. Proceeds from a transaction will allow you to “hit your number”.  Admit it, you have a magic number in mind (after tax) that you would like to achieve from all of your efforts to develop your business.  This number is typically informed by various objectives for life in retirement such as estate planning goals,  philanthropy, or simply enjoying the well-earned fruits of your labors.  The reason for defining this number before you consider a transaction is to prevent clouded judgment during negotiations.  Therefore, if a transaction is likely to meet or exceed your target, then the timing could be right.  Remember the adage, “Pigs get fat, hogs get slaughtered.”   As importantly, when considering a recap vs. an exit transaction, keep in mind that the recap will provide you with two opportunities to monetize the value created by your team’s efforts while the exit transaction is a one-shot payout.  So the total proceeds and likelihood of reaching your target amount may be substantially greater in the recap scenario.  I’ll share more on this very important topic of recap vs. exit transaction in an upcoming blog post.  
    1. You’ve experienced multi-year growth in revenue and profits. In the words of Bruce Lee, “Long-term consistency trumps short-term intensity.”  This certainly applies to how investors will assess the quality, sustainability, and growth potential of your revenues and profitability.  For instance, if you have an abnormally great year with outsized profitability, you might conclude that you should exit to capitalize on your inflated earnings.  However, if your surge in EBITDA is attributed to one-time revenue wins or other unsustainable factors, a buyer is not likely to give you anywhere near full credit for it. Further, if your financials have been volatile such that there are a lot of ups and downs one year to the next, you’re not going to garner the same multiple as a business that elicits more confidence in the predictability of future financial metrics.  Consistent growth creates a reassuring storyline that will attract more interest.
    1. Value remains for a new investor. Sometimes looming headwinds can drive an owner’s decision to exit.  Conceptually, getting out before these challenges arrive makes sense, but it’s likely that investors are already, or will be, attuned to those same issues, and it may then be too late to drive an optimal outcome from a sale.  Would you purchase an orange with all of the juice squeezed out of it?  Clearly not.  At a minimum, investors are going to need to know that the prospects for growth will remain strong for the next 5-10 years.  Otherwise, they may encounter challenges when they ultimately seek an exit.  Think of it this way, reflect on whether you would want to invest in your business today.
    1. Bringing on a partner could help address the strategic needs of the business. For first-time founders of growing businesses, it’s a truism that their company is the largest entity they’ve ever managed.  For a time, managing growth can be fun and present an array of “high class problems” whose solutions can be fulfilling to solve.  However, growth can transform manageable hills into formidable mountains whose successful summit requires the support of someone that has climbed them before.  A good partner, like a sherpa on Everest, will see the opportunity that these mountains present and be able to help you develop a path forward.  Common strategic challenges that get a founder thinking about bringing on a financial partner include (i) their industry’s transformational change, (ii) investing in and building a formal and scalable sales and marketing system / organization, (iii) a sizable add-on acquisition, or (iv) professionalizing / incentivizing a management team.  

While these signs can guide your decision, the ultimate choice is personal and nuanced, and I wish you well in making it with the full support of your trusted advisors.  Get in touch any time if you ever want to talk through where you are in your journey.

About RLH Equity Partners

RLH is a private equity firm with over 40 years of experience investing in rapidly growing, founder-owned, knowledge-based B2B services firms.  Our value creation strategy is defined by a heightened focus on culture, continuity of founder leadership, an emphasis on organic growth, and a conservative approach to the use of debt.  In our long history, we’ve invested in and divested dozens of businesses and made many decisions about the optimal time to sell the companies in which we are investors.

[1] There are certainly exceptions to all of these items, so simply accept them here for the sake of example.

[2] Two other advantages of allowing a peer company to go first are (i) the number of viable targets for the interested investor/buyer universe has been reduced by one which improves the scarcity value of the remaining peers and (ii) the prospective investors/buyers who finished second, third, and fourth in the process to acquire the peer company probably still want to acquire a business similar to yours and are logical targets for your transaction process.

Why Being Unique and Having No Competitors is a Bad Business Model

Why Being Unique and Having No Competitors is a Bad Business Model

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No competition equals a bad business. If there’s no competition, there’s likely very little demand for your solution. So how can you get into a competitive space and create a successful business?

This video offers actionable steps to win deals over big firms. We provide focal points you can’t ignore, opportunities to create competitive advantage, and the benefits that will accompany you
along the way.

Watch this video to learn more about:
– The benefits of doing business in a competitive market
– How to be better, faster, and cheaper than your competition without sacrificing profits
– How to adjust your strategy as you grow for maintained success