Removing the Bottleneck in Your Firm

Removing the Bottleneck in Your Firm

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  • Founders of boutique professional service firms often struggle with building a firm that can run without them. And the challenge begins with separating the role of founder and CEO. Having an effective succession plan can help you do that.

    In this video, we walk through tactics to help multiply your own skills in others and finally remove yourself from the bottleneck. We also discuss the benefits of delegation and why the support around you is vital to the long-term success of your business.

  • In this video, you’ll learn:

    • How to overcome the #1 issue professional service firm founders face
    • A step-by-step guide to succession planning
    • How to efficiently remove yourself from the bottleneck over time
    • Tips for delegation among staff
    • Where to leverage support for your firm

Building an Executive Leadership Team: Tips for the Pro Serve Founder

Building an Executive Leadership Team: Tips for the Pro Serve Founder

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In the early stages of your firm, you’ll hire inexperienced employees to maintain a tight budget. But when you enter the scale stage, that team won’t be enough.

You need an executive leadership team.

Many founders struggle to figure out how to navigate the obstacles that arise when building an executive leadership team. This video simplifies the process.

Watch this video for more on:

    • What an executive leadership team is
    • Why it’s important to have an executive leadership team
    • The right time to build an executive leadership team
    • The 3 ways to split executive leadership responsibilities

Founder vs CEO: Separating Leadership Roles

Founder vs CEO: Separating Leadership Roles

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If one person is doing two jobs, your ability to scale is limited – in fact, we’d argue that you can’t do both. So how do you split the roles of founder and CEO, and identify the best candidate to pass the torch to?

In this video, we examine the role of a founder vs CEO, how to identify and select the right person to move into the role of CEO, and how to clearly separate their responsibilities.

In this video, you’ll learn:

    • The difference between a top performer and a high-potential employee
    • What role corruption is and how to avoid it
    • The 4 numbers every founder should ask their CEO about in monthly meetings
    • The founder’s role in pursuing tomorrow’s business vs the CEO’s role in managing the day-to-day business

Episode  124 – How a Marketing Agency Has Removed The Founder Bottleneck – Member Case by Eric Weisgarber & Adam Diesselhorst

Power members Eric Weisgarber and Adam Diesselhorst have implemented succession planning at their marketing agency, inspired in part by the Collective 54 book The Founder Bottleneck. As a result, they have identified their high-potential employees and are preparing them to take over the firm upon exit. This has allowed them to scale smoothly without the employee headaches and drama found in many firms.


Greg Alexander [00:00:10] Welcome to the Pro Serv podcast, a podcast for leaders of thriving boutique professional services firms. If you’re not familiar with us, Collective 54 is the first mastermind community focused entirely on the unique needs of that boutique pro serve firm. My name’s Greg Alexander. I’m the Founder and I’m going to be your host today. And on this episode we’re going to have a conversation around succession. It’s a very important issue for professional services firms because we’re people-driven businesses. So as a firm scales and maybe someday exits, you know, the baton has to be handled from Gen one to Gen two or from one leader to the next. It’s really important that this gets done correctly and we’ve got a wonderful set of role models on the call today who I’ve recently got to know, and they are very deliberate and intentional about their approach and that’s why I asked them to be on the show today so that they can share with you our members what it is they’re doing. So we have with us Eric Weisgerber and Adam Diesselhorst, how’d I do with those pronunciations? 

Eric Weisgarber [00:01:21] You nailed it. Well done. 

Greg Alexander [00:01:23] All right. Very good. All right. Would you mind introducing yourselves and your firm to our audience? 

Eric Weisgarber [00:01:31] Sure. My name is Eric Weisgarber. I’m the CEO of Analytics, Marketing and Growth. Everybody calls us. That’s our DBA. Everybody calls us the AMG team. And I started the business that we had and kind of followed opportunity and to the point that we’ve had been about a 22-year-long success before we got to where we are today. And and Adam came along about seven years into my journey. And I’m Adam Diesselhorst. I’m the current president of the AMG team. 

Greg Alexander [00:02:03] Okay, very good. So guys, let’s start at a high level. So when I spoke to you, it was obvious to me that you were thinking about succession very early in your journey. So how did you have the foresight to know that that was an important thing to think about that early on? 

Eric Weisgarber [00:02:22] Oh, well, Adam and I were in a different business model. We incubate, incubated what we have today inside of an older business model and found our way to pull out what we had incubated into the agency that we have today and knew that we wanted to grow it over the next 8 to 10 years and sell it and hand it off to the next generation, as you stated. And a dear friend of mine who’s a member of Collective 54 introduced me to you and your content and and told me that I had to take a look at it and get involved and get going on it. So I did. 

Greg Alexander [00:02:56] Okay, very good. And tell the audience a little bit about how you divide up your responsibilities currently. 

Eric Weisgarber [00:03:03] Sure we use similar to in your new founder’s book. One of the chapters, I think it’s maybe nine or ten where you’re talking about the responsibilities and you need to teach people. It kind of follows the same path as Dave Ramsey’s KRAs – key results areas, and we write KRAs for every position in the company and divide them out. And so I’m the CEO. I manage the business with about 20% of my time. And Adam is in the business with about 80% of his time, and he leads the sales portion of our organization. 

Greg Alexander [00:03:47] Okay. And. That determination as to how you’re going to divide your responsibilities. Was that determined based on the skill set that each of you brought? Was it based on your prior working history in the old firm? Was it based on what the needs of the business were like? How did you, how did you land on that? And I’m asking this question because when our members are attempting succession, succession excuse me, they’re struggling with it because people aren’t staying in their lanes, so to speak. They get the concept and everybody says, okay, here’s how we’re going to do it. And they end up with a lot of conflict because everybody’s doing everybody else’s job. And I’m trying to help them stay away from that by studying how you guys are doing it. 

Eric Weisgarber [00:04:30] Yeah, I think I can answer that. It’s a combination of what you had mentioned. It’s all of it. I mean, so I think when I was younger, I used to hire really great people that I thought would fit the job, but I hadn’t really done what you teach, and that is to hire for their potential as well. And I started doing that. So I have both. Everybody is really built for the role that I have available and and where I made the mistakes when I was younger was I’d hire, you know, kind of one of the first two or three candidates I had available. And then we just keep molding the positions around them. Yeah. And developing the positions and hiring the right person, end of them. And if you have the the people on the team that don’t fit it, don’t try and keep them, you know, let them go, be successful somewhere else and hire the people that you need. And that’s what we do today. 

Greg Alexander [00:05:25] Okay. And is there an age gap between the two of you? 

Eric Weisgarber [00:05:29] Seven years. 

Greg Alexander [00:05:30] Seven years. And is there a timeline as to when you’re going to retire and Adam’s going to take over it? Have you built it out to that degree? 

Eric Weisgarber [00:05:40] Yeah, absolutely. So we have we have an executive team in place and and a couple of high potential people that are going to replace us. We expect that Brooke Thompson on our team has been with me for 17 years. Adam and I have worked together for 16. Then she’ll actually wind up being the CEO and we’ll put her in that spot in about 2028. Adam will become an almost an interim CEO in about two years or so. And then we have a high potential on Adam’s sales team that we believe will be the president of the company that does really the role that he does and leading that portion of the the organization. And we have a couple other players that are high potential as well that are being apprenticed right now. So we we intend to sell the company, start the process in about eight years and hope to have that done two years after that. 

Greg Alexander [00:06:38] Okay. So you have a very deliberate and intentional schedule, which is great. How did you come up with those dates? 

Eric Weisgarber [00:06:47] I’m just. What I think we can do within that time period with a little bit of conservative conservative amount of time built in there for messing up and then just desirous, I don’t think Adam and I are guys that are ever stopped working, but we’d like to get our our large one off from our core business. This when I’m about 58 years old and and Adam wants to exit when I exit. 

Greg Alexander [00:07:14] Okay. So it’s a stage of life scenario as opposed to some something happening within your industry sector. Is that fair to say? 

Eric Weisgarber [00:07:24] Yeah. I mean, we’re built the last 50 years. 

Greg Alexander [00:07:29] Yeah. And Adam, you’re in the president role and you’re very patiently going through that. Sometimes the the number two, the person in the president role gets a little impatient and the succession planning process doesn’t go smoothly because the younger gentleman wants the old fart to get out of the way. So how are you remaining patient and being so accommodating? 

Adam Diesselhorst [00:07:58] Well, I think I have you know, Eric has done a really good job in leading in myself, I believe, leading also to our our particular departments. But seeing a vision. It’s helped me a lot, you know, knowing those steps that are in place and have that clear picture painted for me. You know, I’m naturally a sales person, so I don’t have a very good patience. But I do understand the value of of the succession of me going from president to kind of the interim CEO and then that version of the founder where Eric and I can exit together. And, you know, Eric and I have come up with some clear there roles for me as we go through this process. And the other thing I think that will help me too, is Eric is ahead of me in the process. And like we always kind of like to say with each other as is, I’m about two years behind him so I can we’re going to do this and then about two years later we’re going to do it again. And so I’ve got Eric as somebody kind of as the lead for me to follow in behind. 

Greg Alexander [00:08:58] Okay. And the high potentials that you mentioned earlier that are going to come up behind the two of you, are they aware that they’ve been deemed the heir apparent and I guess the same patience questions would be applied to them? 

Eric Weisgarber [00:09:14] Yes. In fact, when I told him that we are we had joined Collective 54 on what we were doing Adam and I visit for an hour and a half on your content every Monday afternoon and go through a chapter together in our notes. And we we take the task separately and then we compare notes on the tasks and talk about what next steps do we need to take and where does this fall into our plan. And we started in December. So for us, that was maybe four and a half months ago. And they came to us, both of them, and said, you know, what does this look like for you guys? Where are you guys going? And when are you leaving? And we explained it to them and talked to them about them being high potentials for us. And it was great that they came to us because they were our high potentials and they said, Where do we fall in line with this? And so I already had an outline for them and and laid it out to them as to what they thought about it, and then moved it to a next formal step and took them out to dinner and kind of did the steaks and wine and and long term vision and what needs to happen between now and then in these segmented periods of time to evolve to that place. And they fell in love with the idea. 

Greg Alexander [00:10:26] You know, that’s the thing with high potentials, their high potentials for a reason. You know, they they’re proactive. They came to you. They can understand and buy into our vision. They can play the long game practice, prudence, you know, delay gratification for something bigger down the road. You know, top performers, very valuable for sure, but different than high potentials. It’s a little bit more of a what have you done for me lately kind of mentality? Yeah, a little bit more mercenary in nature. So you’re fortunate that you have these high potentials and congratulations on you and and treating them properly and nurturing them and showing them the vision of the future that’s that’s inspiring them. And high potentials want to be motivated. They want to see a vision. They want to know they have a future. 

Eric Weisgarber [00:11:10] Yeah. So we laid out to them even the the path of you had thought on one of the classes. Adam and I don’t really miss the classes. That’s part of a nice apprenticeship. As we take notes, we listen to it and watch in separate rooms and then we compare notes afterwards and. And stuff. So. One of them you had talked about, you know, you go from salary to and increased salaries to, you know, bonuses to, you know, be built in on the profits. And so we did that with one of the the person that’s going to wind up being CEO already. And and then we talked about the warranties that come after that. But really Adam’s the only person that whatever that I’m ever going to give equity to outside of myself. So but the warranties were a great piece of communication. Um, where, where does that fall in line if they hit their benchmarks along the way? And so they, they see the big picture and the rewards from it as well. 

Greg Alexander [00:12:09] Yep. And for those that are listening that might not be familiar with that concept is, is if you don’t want to dilute yourself by distributing equity, there’s a financial mechanism called the warrants or sometimes referred to as warranty and it is what it sounds like. You tell an employee, Hey, someday if we sell the firm, you’ll get X percentage of the sales price or here’s how you’re going to contribute. And it’s the same exact vehicle. You know, it performs the same way, I should say, and that they’re they’re being rewarded for helping getting the firm to the exit stage and for helping the exit happen at a big dollar amount, etc. That’s a very effective way to retain and motivate high potential employees. I’m really happy to hear that you all have embraced that. Something that’s interesting about your story is that it sounds like the two of you are going to exit at the same time. And that’s unusual. That’s very unusual. Not under normal conditions. And I’m not saying it’s right or wrong, just acknowledging that that’s a little different. Under normal conditions, what would happen is one of you would go first and then the baton would be handed to the person who’s staying, you know, with the full understanding in the acquirer’s eyes that a year or two later than the next person would go, and so on and so on. Like when I sold my firm, it was kind of a first in, first out type mentality. Have you thought about that and was there a decision to exit together for a particular reason? 

Eric Weisgarber [00:13:39] I think it was really just we pulled this out of the old business model the way we wanted to. We had the same dream of getting out the same time. I think we’re fortunate that we have Brooke and Layne and others on our team that are already leaders and a couple of people that fit this. Being able to lead the business and already be able to be seasoned enough and in that spot for 2 to 3 years before we get to the beginning of selling. And and so it’s really like I think it’s better for us. I mean I get to practice really, having done this to Adam and how well did that happen and lay down the grass that way and then and then watch him and support him and doing that again with Brooke when she becomes the CEO. So and we’ll be able to demonstrate that to somebody who would buy us that, that, you know, we’ve done this twice already. Yeah. 

Greg Alexander [00:14:36] And over an extended time period. Right. Which will make the buyer feel really comfortable that you were that you really took your time to do as well. Okay. My last question before we run out of our time here, is any any kind of gotchas or landmines you want to mention to help our members avoid paying any unnecessary dumb taxes? 

Eric Weisgarber [00:14:57] Great question. I would just say that you you do say it in these meetings that we have on Tuesdays and Fridays, and you say it in the book quite a bit from time to time on both books, really, that you cannot do it all at once. I do think you need to read the you know, I think it’s chapters seven, eight, nine and ten of The Founders Bottleneck and you got to read that book like you’re studying for an MBA. If you’re in my role and that you have to get an A-plus on this test and take notes in the margins, I mean, I treat this thing like it’s a Bible and I have my notes and then I go back and work on my plan and Adam does the same thing. And so we work on it together and we take it one step at a time, although we do move and it’s a there’s a phrase that a mentor, Greg Taylor, taught me that you need to move slower to grow faster, and that’s the methodology to doing that. And, and it works. So just don’t do it all at once. Yeah.

Adam Diesselhorst [00:16:03] And I think for me, Greg, it’s really the being somebody in a position of always been in sales and business development, business development, you know, really getting to a place where I value my time and I itemize that percentage of time of value that I’m doing to where I’m making this transition and figuring that part out of it. So I don’t know if that’s a gotcha moment, but it’s definitely something for me that has been a big step. But, you know, one thing that I learned. Eric mentioned the old model we ran. I used to always tell Eric all the time that I didn’t think we could ever charge people certain amounts for things. And I’m seeing that differently in a professional services business, not in a transactional marketing place I never thought was a reality. So to me I have the proof and this book’s been a fantastic guide for both of us to make sure we kind of see the vision.

Eric Weisgarber [00:16:57] Yeah, 100%. 

Greg Alexander [00:16:59] Yeah. Well, guys, we’re out of time here. It was a great conversation. I’m so looking forward to a private member Q&A with you. When we schedule that, I know our members are going to have a ton of questions. This is a very hot topic right now, and there’s so, so much to it. So you’re a shining example of how to do it correctly. And I appreciate the enthusiasm upon which you consume our material and and your willingness to give back to the community as well. So on behalf of all the members, thanks for being here today. 

Eric Weisgarber [00:17:29] Thank you, Greg. We both agree remarkable and appreciate and are grateful for everything you’re doing.

Adam Diesselhorst [00:17:32] Thanks, Greg. 

Greg Alexander [00:17:34] All right. Okay. A couple of calls to action for listeners. So if you are a member, be sure to attend a Q&A with these guys and get your questions ready to ask them about succession. If you’re not a member, I encourage you to consider joining. You can go to Collective, fill out a form, and somebody will get in contact with you. If you want some additional content. A couple of resources for you. So the first would be Collective 54 Insights. That’s a weekly newsletter, and we published blogs, videos, podcasts, charts of the week, etc. I think you’ll find helpful. And then of course, we have our books, which is The Boutique: How to Start, Scale, and Sell a professional services firm. And then when you join, there’s a member-only book called The Founder Bottleneck: How to Scale Yourself, which lays out the case for succession planning, which is what we talked about today. Okay, that’s it for this episode. Thanks for listening. And until next time, I wish you the best of luck as you try to grow, scale and sell your firm.

Should You Give Employees Equity?

Should You Give Employees Equity?

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Equity splits are the number one cause of business divorces and can cost you millions. So how do you ensure you not only get it right the first time but keep it right as your business evolves?

This week’s video lays the groundwork for it all. Join us to hear about the reasons you should care about equity in the first place, mistakes to avoid, criteria for signing equity, and when to make adjustments.

In this video, we also cover:

    • Six criteria for signing on equity
    • Dynamic equity splits vs static equity splits
    • What dead equity is and how to get rid of it
    • Why 50/50 splits almost never work
    • When to divide up equity

Start scaling your business through delegation 

Start scaling your business through delegation 

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Did you know founders can actually prevent their business from scaling due to under-delegation?

Ask yourself how often your employees or contractors request your help with a task or challenge. If it’s a lot, you may be suffering from under delegation in your business.

In this video, Greg Alexander offers steps you can take to start scaling your business through delegation. 

In this video, you’ll learn:

    • The hidden cost of under delegation
    • How to overcome under delegation in business
    • Scaling through delegation

Have You Structured Your Firm Effectively to Scale?

Have You Structured Your Firm Effectively to Scale?

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Have You Structured Your Firm Effectively to Scale?

The professional services org chart is unique. With labor as the highest expense in your firm, it’s critical that you get this right. In this video, Greg Alexander, Founder of Collective 54 and Capital 54, shares the common ways that professional services firms organize their teams, the pros and cons to consider, and how to decouple your rate of growth from headcount.

In this video, you’ll learn:

    • The 3 types of employees you need to structure your team
    • The Up-or-out pyramid in professional services and why it’s a go-to model, but pitfalls to watch out for
    • Professional services team structure and other considerations to preserve margins

Episode 86 – How a 43-year-old Marketing Agency Handled a Generational Transfer – Member Case with Rob Rankin

Decision making evolves as your firm scales and the founder must be replicated in the successor. On this episode, Rob Rankin, CEO at Clarity Coverdale Fury (CCF), shares his perspective on developing the next generation of the firm, with a focus on succession planning and how decisions are made. 


Greg Alexander [00:00:15] Welcome to the Boutique with Collective 54, a podcast for founders and leaders of boutique professional services firms. For those that aren’t familiar with us, Collective 54 is the first mastermind community to help you grow, scale and exit your firm bigger and faster. My name is Greg Alexander and I’m the founder and I’ll be your host today. And on this episode, we’re going to discuss power. And when I say power, basically what I am referring to is how decisions get made inside of a boutique. And how that changes over time as we move through the lifecycle of a boutique from growth to scaled exit and even beyond. When the first generation is transitioned into the second generation and the second generation is transitioning to third generation and so on and so on, the decision making power dynamic tends to morph when that happens. That’s really important because decisions in a small firm are easy. There’s not a lot of them. They’re simple. They’re not complex. The founder who’s making the decisions can play the role of dictator because he or she is still really close to the business and has great instincts. But as you get bigger in, the founder or co-founders might be two or three steps removed from the day to day or the clients, you know, they might not be the best people to make decisions anymore because their inputs have changed quite a bit. So that’s what we’re going to discuss today. And we have we have a great role model, Rob Rankin, and Rob is in the middle of this. He has a really great perspective because he has been through a generational transfer and has a viewpoint from that standpoint. So, Rob, welcome to the show. It’s great to have you. And would you mind, please, giving a proper introduction of yourself? 

Rob Rankin [00:02:06] You got it. Thanks, Greg, and thanks for having me today. My name is Rob Rankin and I’m president and CCO of CCF, we’re a marketing communications firm that was founded in 1979 based in Minneapolis. And our sole world headquarters are still in Minneapolis. 

Greg Alexander [00:02:23] And what type of clients do you serve? 

Rob Rankin [00:02:26] About 60% of our book of business is in health care and health and wellness. And what we like to call we know health care from all four angles. So public health manufacture, payer and provider. 

Greg Alexander [00:02:39] Okay. Got it. And Rob, we wanted you to speak on this subject because as you just mentioned, your firm was founded in 1979, and right now it’s 2022. So there’s been a journey. And I’m sure the decision making power has changed over time and there’s been generational transfer. So if you wouldn’t mind, maybe kind of walk me through briefly that history from then till now and how the power dynamic changed. 

Rob Rankin [00:03:06] Yeah, so I joined the firm in 1998 and it was founded in 1979 by three Gentlemen’s Clarity, Coverdale and Furey. And in 1978, I was just an account guy and then grew up into a more leadership role account supervisor and ultimately running a department. It was also at that point in time where the gentleman who founded the company were getting ready to retire. One was very ready and the other two weren’t very far away. So over probably a 3 to 5 year period of time, we started to have discussions about a transfer. A few of us, what we call Gen two, formed a team and moved into that and we bought that firm in 2014. We’ve been running it successfully ever since. I’ve since lost one of my partners to retirement and another just is trying to retire this year. And we’re we’re going to get her out of the door to her own accord shortly here. And we’re building that Gen three team that can ultimately take it over from myself and my two other partners. 

Greg Alexander [00:04:13] Yep. And this progression. Gen one, gen two, gen three. You know, this is very common in professional services because it’s a people business. And very often there’s the next generation that wants to stay and wants to continue to do what they’re doing. And there’s an opportunity, if you handle it this way and handle it correctly, you know, for each generation to benefit for not only financially but in other ways. Rob When, when Gen one was transferring to, to Gen two, you and your partners, did it go as smoothly as you had hoped or was there, were there any bumps in the road? And what type of lessons might we learned from that, from that tale? 

Rob Rankin [00:04:59] Yeah, I’m super blessed in that it did go what I would say, relatively smoothly. Perfectly. Absolutely not. And the founding partner, Tim Clarity and myself used to say, because we intended at least to keep the name the same, that if we wake up five, seven years from now and no one know you guys bought it, it worked. And it worked really, really well. And that actually happened. I will say that there were some speed bumps early on as we were forming our Team Gen two and there was a person in place who just wasn’t going to be partner material. And so there were some really, really hard discussions that had to be had to let him know that. And to say that was what was easy. It wasn’t it wasn’t easy at all, but it had to be done or we would have been setting ourselves up not for success, but for failure. And so that was probably the most difficult thing. And then the other thing, at least from Gen two, is perspective being patient because we had we had a kind of a phased approach with each of the partners where they wanted to phase out over time for different reasons. And we allowed that to happen. And from an outside looking in perspective, it still appeared like they were in charge even though they weren’t. And that was important to them and it was okay with us. You know, it wasn’t something where we needed to be seen front and center. We also didn’t want to reinvent the enterprise. We didn’t want to rename it. We didn’t want to rebrand it. We didn’t want to blow the whole thing up. They had a model that was working and had worked for a really long time. And we felt the blow up, that type of equity in the marketplace would have been a big mistake. So that required a little bit of discipline, but we were able to do that as well. 

Greg Alexander [00:06:38] You know, what jumps out at me about your story is that, you know, you joined as a young account person and grew up to where you are right now, which means that those that Gen one did an excellent job of identifying high potential employees and grooming them to take over bigger and bigger responsibilities. That that happened in the typical kind of apprenticeship model where it was just through osmosis or was there some formal system put in place? 

Rob Rankin [00:07:05] It was really more of an apprenticeship model. Tim Clarity I tend to be the type of person that if you give me a lot of room to move, I work better. If you constrain me, I’m not good being micromanaged. And so that’s kind of the philosophy in the culture here. We hire really responsible people and let them do their way, do their job, and we do our best just to get out of their way. That doesn’t mean they don’t need coaching. It doesn’t mean they don’t need training. It doesn’t mean they don’t need mentoring of sorts. But but we let them do their job. And Tim allowed me to do that and allowed our media director at the time, Danny there to do the same thing and in and of it. She and I both kind of grew up together in the business and became somewhat area parents at the end of the day. Diane was probably interested in retiring sooner while she was. She’s already retired sooner than I and and she’s since moved on. And because of that, she didn’t want as big a share when we transitioned. But we had a third person internally who also had really was a finance person and had really great, great credentials in that space. And so she worked in that and she was interested in buying in a little bit more. And between the three of us, we found we found a good balance for each of us. 

Greg Alexander [00:08:21] Now, you mentioned buying, so I’m assuming there was some type of transaction that happened from Gen one to Gen two. And was it the traditional way where the first generation kind of set up, maybe like a sellers note and they transitioned a piece at a time based on profits that were being generated by the business? Or did you guys have to go out and raise the money to pull this off? 

Rob Rankin [00:08:42] No, we were really fortunate. There was an owner financed buyout over a five year period of time with an option for a year, six and seven, if needed, at the seller’s discretion. So we didn’t control that, and then we did have to have some skin in the game. So there was a certain percentage of the overall price that we agreed upon that we had to we had to go to a bank and we had a we had to find financing for that. And based on our individual percentages, that’s what we had to put up. 

Greg Alexander [00:09:13] And they structured that way because they wanted skin in the game. Or was that the only way to close the gap in price? 

Rob Rankin [00:09:19] They wanted to know that we were serious and 100% owner financed buyout, I think and I believe that it was the right decision for us. It was the right decision for them. They wanted to know that we were serious and that, you know, being able to have needing to go to a bank and taking out some form of a loan, you know, it it ratcheted things up just a bit. 

Greg Alexander [00:09:40] Right. And during that transition, let’s call it five years. Back to the main topic here, which was how decisions are getting made or the power structure externally. It was important to them to still be perceived to be in charge. But internally, you and your partners were running the firm. Sometimes this gets messed up because the generation that’s on their way out, sometimes they don’t want to give up control and they they stick their nose where it doesn’t belong at times. How did that happen at all? 

Rob Rankin [00:10:09] And in not to a not to a degree where it was terribly difficult to the partners that simply wanted their name still on the door, it was more that they just wanted to be seen as still the important person that started the company, and rightfully so. They’re fantastic gentlemen, their friends and mentors to this day. There was one that loves to do the work and is just passionate about the work and was an in 30 until the day he walked out the door. But it wasn’t difficult and there wasn’t anything that was acrimonious or needed, lawyers or anything like that. 

Greg Alexander [00:10:46] Okay. You know, and then Gen2 takes over and some of them are retiring, as you mentioned. Is there like a mandatory retirement age or is there some some rules around when somebody can walk out the door there? 

Rob Rankin [00:11:02] There aren’t, other than once you decide to walk out the door. The firm has up to ten years to purchase your stock at the firm’s discretion. I say so we can do that over time. But you can’t hold on forever. And you also can’t be the one that drives that. You can’t walk out the door and say, I want to get paid tomorrow. 

Greg Alexander [00:11:23] Very good. I mean, that makes a lot of sense. That keeps everybody on the same page there. It sounds like to me you had some great legal counsel that held your hand here and put these things in place to make sure that, you know, there was no unnecessary tension and drama. Is that fair to say? You had great counsel. 

Rob Rankin [00:11:40] We we had fantastic counsel. And my only disappointment is that he moved on and went and worked for his dad’s company. So he’s no longer my lawyer. So. 

Greg Alexander [00:11:52] And would you advise our members that might attempt to do this, not to do it themselves and find the right attorney to help? 

Rob Rankin [00:12:01] 100%. I would say that unless you’re an attorney yourself, and even if you are, it would be a mistake to try to do this without the one. Putting the structure in place from a legal standpoint. Kept us all in line. Yeah, we all knew the rules. We agreed to the rules, and we knew we had to follow them. And we did. Yeah. 

Greg Alexander [00:12:18] And that’s the important thing. And everybody agrees upfront, right? So there’s, there’s no surprises. And when I’ve seen this and I’ve seen it several times now, it’s very rare. Does a dispute wind up in court because of this? I mean, it was it’s friends cell and a friends, so to speak. And it’s a very natural, organic thing to do. And this is well-worn territory. This isn’t something for those that are listening. You don’t have to go invent the wheel here. I mean, this has been going on for a long time period just because it’s the first time that you may be doing it members. It’s not the first time that it’s been done. Okay. So now let’s fast forward a little bit. So your partners are retiring. At some point you’re going to retire and you’re going to have to go to June three. Do you plan on using the same approach or are things the world is different now than it was back in 1979, 1998, even 2014 does is the process still workers? Is it changing? Does it need to be modernized? 

Rob Rankin [00:13:13] I think it can work, but we have to be sure that certain components are in place. So right now we have one gentleman who’s actually a member of Collective 54 as well, because he’s brought in and is a partner and and he’s a candidate to take that lead. Now, we have to do a few things. We have to surround him with people just like I was surrounded with great team members to be a part of that. And so if we can do that over the next 3 to 5 years, then we’ll have a gen3 and I think it can work pretty seamlessly. If not, we do need a plan B, you know, whether that’s a merger and acquisition selling, where we’re bringing on talent to help round out that individual or surround him, I should say, with others that can help him with the day to day business. And then that’s an option too. So I’ve seen several people in our space, specifically marketing communications, be left at the altar by that internal person who was supposed to buy. And so I know that we do need a plan B. 

Greg Alexander [00:14:14] Yeah, I’ve seen that happen too, you know. And then also, I mean. Can you go so far as to think about zero on Jan three? Can you peak down to Jan four? Is that too far of a stretch? Too many years will pass by by then. 

Rob Rankin [00:14:27] I think for me I don’t I think by by the time I hand off the torch it’s it’s then there’s to have and I think that’s part of what really worked with us is the guys never came back and wanted to be back in the business. They let they let Jan to run it the way they they saw fit. And there’s also just a spirit and a culture here that’s been built, starting with Jan one, carried on by Jan two. That’s really important. Yeah. And it’s why I know that while it’s likely, maybe even probable that we could get more money if we did an external sale, it’s not in the spirit of the enterprise and what the guys were gracious enough to do for me and my other partners, we want to do for those that have been working with us side by side for years as well. 

Greg Alexander [00:15:11] Yeah, well, this is a great story. You’re a fantastic role model. This topic is underrepresented in the world. It’s not talked about enough. And the way these collectives work, ours and others, is that, you know, people have to make a deposit into the collective body of knowledge, and that’s how we all get smarter. And you did that today, and I’m very grateful. So on behalf of the members, thanks for being here and sharing your story with us. 

Rob Rankin [00:15:37] You got it. Thanks so much, Greg. And I’ll see you at the boutique on Friday. 

Greg Alexander [00:15:41] Okay. Very good. And for those that are listening to this and they want to learn more about this topic and all the other ones related to growing, scaling and exiting, if you haven’t already, pick up a copy of the book The Boutique, How to Start Scale and Sell a Professional Services Firm. And if you’re not a member and you’re listening to this and you want that type of tribal knowledge, which is very tough to come by and meet, really interesting people like Rob consider becoming part of our community and you can find that at Thanks again, Rob. 

Rob Rankin [00:16:15] All right. Take care.