Episode Transcript
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Speaker 1 (00:16):
Howdy.
Welcome back to anotherfun-filled episode of the
Unknown Secrets of InternetMarketing.
I'm your host, matt Bertram.
Today, I have a special guestfor you.
Before we get into it, we'regoing to be talking about M&A,
and so there's a lot of peoplethat transactional
entrepreneurship.
A lot of people have businesses.
They're maybe passing downtheir kids you might be
listening you're taking over abusiness and you're trying to go
(00:39):
through some digitaltransformation with that
business to generate leadsonline.
This is the podcast for you.
In addition to lead gen, though, there are a lot of other
things to consider with abusiness, and also if you're
looking to potentially exit abusiness, there's things to
consider.
So you should be able to turnyour business into more of a
(01:04):
tech company or an onlinecompany or a SaaS company.
You can increase your multiplesthat way, especially for
service-based businesses.
There's a lot of ideas arounddoing that, but getting some
ideas for succession planning, Ithink, is critically important.
I am going to build a series.
I have a lot of people thatI've interviewed over time that
(01:26):
have talked a lot about M&A andbuying and selling businesses,
so I'm going to put together alist for you.
On YouTube.
We're going to be doing a lotmore shorts and you'll probably
see us around other places, butthank you so much for everyone
listening on iTunes 12 YearsStrong Again.
(01:48):
If you do find any value inthis, please share it like it,
subscribe to it.
It really helps the channel and, without further ado, let me
introduce Jonathan Baker frompunctuationcom.
Punctuationcom.
Jonathan, thanks so much forbeing here.
I don't know, I can't talktoday.
We're talking about punctuation.
I can't speak.
Speaker 2 (02:07):
Yeah, great to be
here.
Thanks for having me.
Speaker 1 (02:26):
MNA side.
Sorry, today I just don't know.
I'll let you kind of take itfrom there as far as like a
little bit of your backstory andthen we can just jump into how
buyers determine the value of afirm, to just kind of set the
stage for everybody in theconversation.
Speaker 2 (02:37):
Sure.
So I started my career workingin marketing strategy, working
for a lot of CPG brands, fortune500, and then left that to
start a craft brewery in Atlanta, ran that for 11 years, still
(02:57):
have my ownership, but I havetwo business partners running
the day-to-day.
It got a little too big for meto be having fun.
And we had also recently gonethrough an M&A experience.
We had a seller approach us,got pretty far down the line,
(03:18):
ended up getting left at thealtar and that experience really
piqued my interest in M&A.
That experience really piqued myinterest in M&A so I saw an
opportunity to jump over to helpmy father build out his
business Punctuation.
He's been working withmarketing service firms for 25
plus years helping them grow,and those clients are now asking
(03:41):
like, hey, can you help sellthe business, what am I worth?
Row?
And those clients are, you know, now asking like hey, can you
help sell the business, what amI worth?
And so we work exclusively withsmall to mid-sized marketing
service firms.
And then I work on the M&A sidehelping them find buyers or
helping buyers find sellers,doing valuations, helping
generally with successionplanning, usually with kind of
(04:04):
smaller marketing shops.
Speaker 1 (04:07):
Yeah, my wife's
family business needs those
exact services, yeah, and Ithink a lot of other people do
as well.
So, yeah, so let's talk aboutit.
A lot of people are growingtheir business.
They're really attached to it,right?
They're like this is mybusiness.
I poured out my heart and soul,uh, in this business, uh, and,
(04:28):
and a lot of times, uh, whatthey're looking at at the value
of their company is a lotdifferent than what maybe a
potential buyer is looking at,right?
And and you know it's their baby.
Don't call their baby ugly sortof thing.
Maybe that's like a goodanalogy, but like to approach it
from a very analyticalstandpoint.
What are buyers looking at whenthey're looking to buy a
(04:52):
business or someone's looking toexit?
What are the things you shouldbe considering?
Speaker 2 (04:56):
Yeah, I mean first
and foremost unfortunately maybe
is profit.
So profitability is reallynumber one, and even if they're
not buying you exclusively forprofit, they're going to be
negotiating with you based onyour profit.
So profitability.
But a close second would beyour positioning how strongly
(05:17):
you are focused on a particularniche or industry, or you know
even a horizontal positioningniche or industry, or you know
even a horizontal positioningwhen you think about the size of
companies that are buying firmslike this.
It tends to be.
You know other larger fullservice firms, and so they are
(05:37):
trying to buy a book of business, right, well, or they're either
trying to buy profit, they'retrying to buy capabilities, they
, they're trying to buycapabilities.
They might be trying to buypeople, yeah, but they're buying
something that would be harderfor them to replicate, and so
the more, the deeper you can goin your own positioning, the
easier it is for you to sell.
It also gives you pricing power, which is great.
(06:00):
Beyond that, they're lookingfor something that it's not
heavily dependent on the founder.
Obviously, it's fine if you'reinvolved, it's great if you're
involved, but they don't want.
You know all the clientrelationships connected to you.
They want to make sure there'sa strong business development
process in place, and I thinkone of the last big important
(06:24):
things would be your clientportfolio and making sure that
it's balanced, that you don'thave one kind of gorilla client,
um, so client concentration.
Speaker 1 (06:34):
Yeah, no, and I've
seen that.
I've seen that a lot.
We saw it in our business uh,early on as we were growing into
the enterprise category.
Um, that first client, uh inthe beginning, was 42% of our
revenue early on and so it wasvery risky.
And I actually just had a buddyof mine that we used to work
together at, about an 800 personagency.
(06:56):
He was running a vision andthey lost a big client and had
to lay off like close to 100people, and so you know it and
it happens in this industry alot, and so not just talking
about marketing firms, but allsmall businesses run that risk
too of that big client.
(07:17):
And also how people are runningtheir books.
As far as profitability goes,definitely for small businesses
is an issue.
I think the, the, the brandpositioning and the market
leadership, um, uh, in that bookof business in that category is
really like a unique sellingproposition when, when someone's
buying because there's not,there's only so many people that
(07:38):
have that kind of specialty,and I think that that market
leadership component, um, maybewith certain kind of processes,
uh, or something like that,where it's replicatable without
you, I, I agree, is kind of that.
That phase um, where you knowis is it a solo entrepreneurship
kind of role or is it like atruly a business?
(08:00):
And, and I've seen with a lotof small businesses, when you're
, when you're selling whateverit is, the owner's book of
business has to be transferredto other account managers, other
leadership and those roles haveto be maintained.
There's kind of like a typicalhistory or process for people to
(08:20):
move from like one quadrant toanother quadrant.
If you're a rich dad, poor dadkind of person.
But you know, tell me a littlebit about what you learned about
the ins and outs of the M&Aprocess, and you know you talked
a little bit about thatemotional toll.
I think a lot of people don'tunderstand, when your business
(08:42):
is being scrutinized, how thataffects you.
Certainly, I think people thatrun campaigns and politics and
we've done some of that kind ofstuff in the past Everybody's
looking at you, everybody'sevaluating you, everybody's
looking at every nook and crannyof your business.
That's hard for some people toprocess.
I don't know what was yourexperience when that was
(09:02):
happening and how did that maybetug on you a little bit?
You hinted at that at thebeginning of our call.
Speaker 2 (09:08):
Yeah, I think what I
expected going in is that it was
going to be more of anobjective, straightforward
process, right?
Like where there's thisspreadsheet and both parties
agree on it and then like yougive it to a lawyer and they
make it words.
But it's a lot more nuancedthan that.
(09:29):
It's a lot more relationshipdriven.
There's a lot of kind ofpolitical stuff going on, and so
it's.
You know there are ups anddowns.
I think, generally what I youknow what I talk about will
apply to any professionalservices business, even though
(09:50):
our experience as marketingfirms, the process and the way
that these deals are done, isthe same across professional
services.
You know, generally you'regoing to get a certain
percentage of money up front andthen you're going to need to
stick around for two to threeyears, sometimes longer, during
an earn out, to get the rest ofthat money, and so one of the
(10:16):
big things that you need towatch out for throughout the
process is am I going to becomfortable with, with this
person or this business as myboss for a little while?
Right, because you know, two tothree years yeah, it's sure
it's not that long, but at thesame time, you haven't had a
boss in years, right?
So is this going to besomething you hate Cause?
(10:40):
If so, you're going to want toleave, which means you're
leaving a ton of money on thetable, right, because you only
got a percentage up front.
Speaker 1 (10:46):
Man, interesting, I
did sell a business in my 20s
and it actually was more of likewe started a bit.
I was working at a company, Ibroke away and they funded me
and so we all had likepercentage of equity.
I grew really really fast andthey ended up wanting to buy me
out and and so, um, you know,through that process, you know,
(11:10):
we, we came to terms and Iexited and then they didn't
realize how critical I was and Ithey actually had to pay me to
come back to finish closing outum, a few of the sales process
deals, and also I had signed apretty extensive employee
(11:32):
agreement and non-compete andstuff like that, and there's a
lot of things that, well, in mytwenties I didn't really learn
or consider or why this isimportant.
But you know, those deal termsare incredibly important.
I mean, you know, talk a littlebit more about, like you know,
(11:52):
things to look out for, thingsto.
Like you talked about beingaware that someone's going to be
your boss and if you don't dowhat they say, you meet that
requirement.
And if there's some politicsinvolved, right, that
requirement and if there's somepolitics involved, right, and
that's that becomes very dynamic, depending on if there's
multiple partners, or you knowsomeone buying you and selling,
(12:15):
or the integration how all thatworks.
And you know sometimes if thereare politics, they might be
trying to make it difficult foryou to complete your contract,
to get that payout right.
Like I mean, not everybody is,you know, approaching this with
the same goals in mind and thesame business interactions, and
(12:37):
a lot of these interactions whenpeople are exiting, I mean,
what's the process look like?
Because you know, I've hearddifferent things, so can you
talk a little bit more about,kind of those deal terms and
stuff like that?
Speaker 2 (12:51):
Yeah.
So I think a lot of peopleapproach this from like a hard
number perspective.
So I want to sell my businessand I want to get $5 million for
it.
So $5 million is the deal I'mlooking for.
Well, let's say you find a dealand then they're going to give
you 40% of that upfront and theother 60% is contingent on
(13:11):
hitting certain targets andsticking around.
So that means that you'reactually only guaranteed $2
million.
That other three, that 5million number, has nothing to
do with that three anymore.
You have $2 million and thenyou have to think about what do
I need to do to get that otherthree or more?
And so it's really about likemitigating your risk and your
(13:34):
downside.
A lot of times, your earnoutsare going to be tied to hitting
certain revenue targets, forexample.
So what happens if you don'thit that target exactly?
Do you get nothing, or can youstep it down and maybe you get a
little less?
A little less.
You don't want those targets tobe so rigid that you're going
to just completely lose out.
(13:56):
You also need to think aboutyour employment agreement.
So you're going to be workingfor them.
That means that you now have asalary again.
You now have bonus potentialmaybe.
How many hours are you going tobe required to work?
Is travel going to be required,like all this stuff that you
would ask if you're interviewingfor a job right Now?
(14:18):
You have to think about thatstuff again.
How strict is that non-compete?
And that does matter a lot,depending on what you want to do
with your life post-earnout.
And what recourse do they have?
Can they just get rid of youand if so, do you get severance
or do you lose your opportunityto get?
Speaker 1 (14:38):
that equity.
Well, jonathan, a buddy of mine, that's a marketing agency
really focused in the realestate space.
He ended up selling and he hada podcast that he had started
and a publication that he hadstarted at the same time and
(14:59):
while those terms weren'texclusive in the deal when he
exited, weren't exclusive in thedeal when he exited, they told
him that since he started itwhen he was at, you know, when
he built this agency as well,there was some kind of
association with that and he hadto, like he got into a legal
whatever about it, butultimately he had to change the
(15:22):
name.
Yeah, and that was.
You know, there was a wholecontracts thing of.
This is a different service,but you can't like that.
There was a lot of things that,you know, I don't think he
thought about when he thought itwas going to be a clean exit.
It turned and he's like I gotthis other stuff going on, I'm
(15:43):
going to let this thing go, I'mgoing to focus on this, and then
it really put the brakes on allthat and and he had to start
over and it was.
It was quite a painful processfor him, um, even though he
thought this was like anexcellent deal when he looked at
it.
Speaker 2 (15:56):
Right, yeah, I mean
you do need to make sure you
have car belts for all the rightstuff, the um.
You want to.
You want to like love workingwith the people that you're
selling to, but you're stillgoing to want to protect
yourself on paper to the extentpossible and just hope that you
never have to look at that pieceof paper again.
Right, so you got to make sureyou're protected on paper, even
(16:18):
if you really trust these folks.
Speaker 1 (16:21):
That's always what
the paper's about, right?
No one looks at the paper untilsomething goes sideways, like
everybody like hopes thatthey're on the same page and
they work it out.
So I want to circle back tobrand positioning and
benchmarking and maybe hear youtalk a little bit, because you
work exclusively with marketingfirms.
(16:42):
I mean, there's a lot ofagencies and freelancers and
kind of smaller agencies tobigger agencies that listen to
this, that I mean I get callsconsistently and I'm sure others
are as well.
If that's something thatsomeone's thinking about doing,
how do you hone in a little bitmore on what makes you unique
(17:06):
and how are you looking at compsor bids, marketing in that area
?
Um, if you're general, right,um, then then then it's harder.
And there's, the comps arewider, uh, certainly, uh, riches
are in the niches you want toniche down, uh, to what you're
focused on.
But I'm just curious, with thedeals that you've done, uh,
where have you seen the bestmultiples as far as them
(17:29):
differentiating themselves?
And what were the KPIs orbenchmarking that you were
looking at when that evaluationcame?
Because if someone's thinkingabout this, I don't think people
are like, oh, I'm going to selland then tomorrow they sell,
right?
I?
think that there's a process andyou can kind of shape where
(17:49):
you're going and take certainactions as you move in that
direction.
Speaker 2 (17:53):
Yeah, I think you're
right and you alluded to this
earlier on, but buyers arereally looking for
predictability of revenue.
Future revenue like the past isgreat, but what's the future
look like?
And so, to the extent that youcan, you know highly desirable
uh industries, basically wherewhere folks have disposable
(18:34):
income to spend.
So, uh, legal services, uh,medical services, financial
services these are all focusingon those where you know, where
they're not as concerned aboutwriting you the big check.
If you can get that work,that's a really good thing.
Speaker 1 (18:58):
Oh yeah, well, you
can definitely look at it and
say how well is that businessdoing and what size type
companies are you working with?
And I think the real crossoverfrom what we've seen is um, is
it the owner's money, right?
Speaker 2 (19:14):
That's right, or is
it the business's money that's
right in the?
Speaker 1 (19:18):
check and, and those
two uh numbers, even if they're
the same amount, are managed andand viewed very, very
differently.
Um, so I think that there is acase on the enterprise side, but
if you can build a sustainablemodel or a SaaS model where you
(19:38):
can service in volume and scale,there's huge opportunity there
as well.
Right?
So it depends what you'reselling and what you want to do
on how to build maybe that nextlayer.
There's a great graphic thatI'm sure you've you've seen.
I went to a, a digital marketersconference back in 2017 in New
(19:58):
York and it was.
It was just all about agencygrowth and they haven't done one
in a long time.
But, man, I was like it wasawesome because they had this
chart and it showed where peopleget stuck from growing from a
small agency to a large agencyand what are the possible things
that they're looking at, likewhether it be like a
(20:20):
productizing services, you knowthe scalability on the sales
process, like there's a lot ofstuff that you have to solve
when you're at an agency andI've, I've actually done not, um
, you know, business planning oranything like that, but a lot
of people that have come to mefor SEO coaching, uh, it turns
into agency coaching and agencyproblems, and how to deal with
(20:44):
this client and how to you know,like it, it, it.
It kind of morphs pretty quicklyinto I'm dealing with this
issue, how, how do you solvethat?
Or how do we sell on this newservice or, um, you know, and
and, uh, I have two clients that, uh, you know, have off and on
been uh, hired me, uh, and, andI think it's just like an easy
(21:05):
solve.
But it becomes this kind ofongoing thing and I think that
there's an accountabilitycomponent and we are launching
at MatthewBertramcom a coachingprogram and I'm also for oil and
gas, we're launching a CMOinsights course and that's
through my oil and gas marketingand sales podcast.
But I'm just seeing a need herewhere, as an operator for a
(21:29):
long time, um, I I didn't reallyuh understand how much of a
need there is for consulting andcoaching and people that are
are doing the work or trying toimplement this Cause a lot of
people have the right strategyor they've heard it work for
somebody else and it justdoesn't seem to work for them
Right, and it's like gettinggetting that all kind of put
(21:51):
together.
I mean, when you'rebenchmarking, let's kind of get
back to that.
What are you looking at whenyou're looking at benchmarking
and how are you assessing thosecomms?
Speaker 2 (22:00):
Yeah, there's I mean,
obviously a number of different
factors, but I'll say one ofthe most powerful benchmarks is
really simple and it's theamount of fee revenue per
full-time employee and wedefinitely use that internally
yeah.
Yeah, and you know we seeagencies get stuck at around
(22:21):
160,000, like that's the ceilingfor a lot of firms.
But if you, if you startrunning your firm the right way,
positioning well, you can seethat go up to 220,000 or even
higher.
We've seen it higher than thattoo.
We look at utilization in a waythat's a little bit different.
So we're going to look at allemployees, not just the billable
(22:42):
employees.
And if you've got some kind ofinternal hourly rate that you're
using for estimating purposes,how good are you at turning all
the hours worked in your firminto dollars at your stated
hourly rate, right?
So we're going to again dividethat into your fee income and
your goal should be 60 percent.
(23:04):
The average we've seen is 42%.
So the delta between 60 and 42is pure profit.
That is just pure profit thatyou're leaving on the table,
likely by over-servicingaccounts or not estimating
(23:25):
correctly.
But once you see that gap, yougot to work to close that gap
and it's.
You know it's a slow processbut that goes straight to your
bottom line.
Speaker 1 (23:34):
Well, you know one of
the things when I was doing
some coaching with a bigpublicly traded consulting
executive, he was educating meon not digital marketing
perspective, but just likeknowledge workers, like
consulting across the board.
And you know he said thatthere's an erosion of at least
typically 25% of scope creep.
(23:56):
So like, whatever you quote thedeal at over time and the
over-servicing of accounts isstandard across all industries
and that a margin can get eroded, typically around that number,
and so a lot of people ifthey're pricing their services
20% or 30% or whatever, overmargin many times they break
(24:21):
even or they get upside down.
And I think that there's a lotof agencies out there and that's
why I bring it up that areprobably in that situation where
they're like we're deliveringgood work, we're doing great
things and we're taking care ofour clients, but we're not
making any money and it'sbecause they're not pricing
their services high enough orlooking at the value of what
(24:44):
they're delivering as theirexpertise to get it to a place
that internally there'sprofitable, because the client
just looks at I'm paying thisfee and I want all this done for
this price, and a lot of times.
One of the biggest issues thatwe dealt with was we took our
hosting and separated ourhosting into a separate.
It's not a separate company yet, but it's under a different
(25:06):
brand.
The billing's different.
You know we need to separatethe well, the accounting gets
ported in, but essentiallythat's a separate entity and and
issues that you have on thehosting side are different or
webmaster services sides thanyour marketing bucket.
And when we started to separatethose out there, we saw a huge
(25:26):
profitability increase on themarketing side and we saw a need
for greater customer service onthe hosting side per se.
As far as little changes, right.
And then we implemented like aservice hour where you can buy a
service hour and we can makeall those changes as needed.
Or we have like a technicalsupport plan that it's included,
(25:49):
xyz, whatever and justseparating that out to
understand what you're gettingand that help for accounting
purposes, right, everything'sbroken up into the buckets.
That makes sense.
You can trace that line down.
So there's a lot in, I guess,the setup of how you're tracking
stuff, and if you're nottracking it or you don't have
(26:10):
visibility to it, then it's hardto improve it, right?
I want to keep fleshing thisout.
I think benchmarking and maybehow people are looking at their
internal KPIs that they'retracking, especially now that
we're doing this towards the endof the year, people are looking
at next year planning.
What are some recommendationsor things that they could do.
Speaker 2 (26:34):
I mean.
Another interesting one, Ithink, is just the amount of
money that you have in the bank.
An asset.
Yeah, there's obviously a toolittle amount, but there's also
a too little amount, but there'salso a too much amount and
understanding how that relatesto your client concentration.
(26:56):
So the higher your clientconcentration, the more money
you need in the bank, because ifyou do lose that big client,
you're going to need enoughmoney to be able to make smart
decisions for, you know, threeto four months in order to get
back on your feet.
Right, if you don't have thatissue, then you can keep less
money in the bank and I wouldsay anything above that.
A lot of people like run theirbusinesses very conservatively
(27:21):
and they'll keep really healthybank accounts, but in our
experience that can actuallylead to sloppy decision-making.
If you've got too much money inthe bank, you might not fire
(27:45):
that person as quickly as youshould like.
Loan it back to the business,that's fine, but you need to run
your business as if you'rerunning an actual business.
Speaker 1 (27:56):
Let's talk about
growth, then let's talk about
deploying that capital toincrease your rate of growth.
If you have a ton of money inthe bank account, scalability, I
think, is incredibly important.
Of like, do you need to hiremore people?
What does your process looklike?
How are you going to put thatmoney to work Right?
If it's just sitting there inthe bank?
(28:17):
It's kind of like a, you know,a reserve asset, but it's not.
It's not helping you grow.
You know, or or you might bepaying it out, I don't know and
what that mix looks like, butyou know how important is growth
and like what are some of thefactors that you've seen
(28:38):
involving that.
If you could speak to that alittle in America that we
overuse and strive for too much.
Speaker 2 (28:53):
I like to focus on
you, your personality, what
makes you happy, what do youenjoy doing at work, and then
build a company around that.
For some, it will be growthright If we're talking SaaS?
Speaker 1 (29:06):
right, If you're
talking SaaS, you're looking at
like number of users and thingslike that.
But no, that's interesting tohear that.
I think it's about predictablecashflow, right.
I think it's the biggest thingof what you're buying.
And how long have you had thoseclients maybe?
Right, how consistent of areoccurring revenue source are
they?
Maybe?
Speaker 2 (29:26):
Well, yeah, I mean,
for me it's about lifestyle.
So maybe selling the businessisn't the right move.
Maybe you just run it and thenshut it down because you don't
want to boss again.
You just want the freedom tomake your own decisions.
So it is a really personalchoice.
Growth is often the right move,but not always.
(29:47):
Sometimes you might havesomeone who's just not a good
people leader or just hatesmanaging big teams, and so you
know, the bigger you are, thethe more removed from the work
you become and the more yourtime gets focused on managing
people, and for some, that canfeel like you're, you're, you're
(30:10):
trapped.
Speaker 1 (30:12):
I you know we're
getting into personal
preferences I would tell you,you know, if you don't like
managing people, you should tryto hire somebody that does, or
or that's good at it, right, andand maybe maybe hand that off.
I mean, one of the things thatwe do, and I'm I'm not looking
personally to sell the agency.
(30:33):
Really, the agency for me, like, was, let me, generate a lot of
high quality individuals thatcan work together as a team to
build things online, and it'smore of a hub and spoke model.
So we're starting to buildbusinesses, that the marketing
(30:54):
dollars flow back into theagency, that we control the
different products that welaunch, whether it be
supplements, whether it becoaching, whether it be hosting.
We view the agency almost as ateam of people that you can
access and you know theircapabilities to apply digital
marketing to other businesses.
(31:14):
Right, like there might be anopportunity.
We bring it in, it's it'snon-traditional, uh, or it's
sorry, it's traditional.
We digitize that business, weincrease those multiples, um,
and then, uh, we can, you knowwe help that the client do that,
or you know, we could sell thatoff, like we haven't got to the
point where we've sold anythingyet, but we're seeding a lot of
(31:38):
different businesses, givingthem more of a runway, giving
them a preferential kind ofmarketing with, like backends.
And I, I do have some agreements, um, where, where I have like a
percentage of whatever um,whether it be revenue or um a
percentage of ownership whichyou know, you, you aren't.
You don't want to have morethan 9% um in my opinion, uh,
(32:00):
because, uh, then you gotta beon all the credit card
statements and everything else.
But also, if you don't havemore than 51%, you're just
riding along with what'shappening, right, like so
there's a lot of differentthings that you have to learn as
you get into business, and howto take digital and apply to
that.
I mean, if someone is lookingto sell and there's a lot of
agencies, like I think thatthere's probably going to be a
(32:22):
lot of agencies that want tosell as these big boys start,
like from people I know I knowone person that sold to a big
conglomerate and AI has not beeninstituted on a mass scale,
okay, and they're really takingtheir time to build the
processes to roll it all out.
(32:42):
I think, as that AI rolls out,the leverage of these big
companies is going to growtremendously and it could
squeeze out some smaller players, and so you know.
I mean, how are you viewing orwhat are the things to look at?
And this could be a situationalthing, it could be a regional
thing Like.
But I know that there's thesebig conglomerates out there that
(33:02):
keep buying up agencies andkind of stacking the books to
business.
I mean, when do you sell andwhen do you keep building?
I mean, how do you view?
Speaker 2 (33:09):
that?
When do you sell and when doyou keep building?
If you are having fun building,I would say generally, keep
building.
Sell when your goal is not tobuild anymore but it's to hit a
certain number, right.
Or you've reached a certain agewhere you know that you're
(33:32):
going to get burned out, sothere's no.
Or you think you might've likekind of capped out with where
you are without significantinvestment.
So you might reach like aninflection point where you're
like all right, we've grown itto 50 people, but I know that if
(33:54):
I want to grow this thingbigger I'm going to have to hire
a whole other layer of middlemanagement which is going to
crush my margins.
Let me sell now while I stillhave that nice upward trajectory
on the P&L and then growing itcan be someone else's financial
problem.
Speaker 1 (34:13):
You know, I think
that that's a good point, Like
when you hit, when you hit thatnumber, like do I need to do
that or are we okay?
I mean going back to kind ofsuccession planning, like I mean
there might be peopleinternally that you can bring up
to kind of take over the reins.
I mean, I I think like, yeah, uh, esop or you know something
(34:34):
like that where you can sell,sell it into uh the team.
I think when the team uh haspride in in what they're doing
and what they're doing it withum, you know, I I have a uh
another buddy that um, he had agreat team and that company got
sold to a bigger company andthat other company had new
(34:54):
processes and came in and and alot of the people went with it
but it lost its magic.
You know, it lost its magic.
And so I mean, you know, Idon't know how there's so many
different decisions to make, andI guess it depends on, um,
everyone's different kind ofsituation, and and I know that
that's what you're good at doingis is helping coach and consult
(35:18):
those agencies.
Let me ask you, though, likelet's circle all the way back as
kind of like a last questionand and talk about lead
generation, and you know whatyou've seen consistently
companies do that win.
Right, like there's probablygotta be like a company that
that you, you consult with, thatsells.
(35:39):
They figured out a couple ofdifferent components.
Right, they figured out thesecomponents.
They you know they're, they'reprobably selling in a certain
kind of way.
They look kind of similar,right Like you know what this
animal looks like when you seeit maybe.
Um, I'm curious what?
What does that look like to youfirst?
And then, secondly, what's likeone secret of unknown secret of
(36:04):
digital marketing for agenciesthat you've been able to see so
many different successfulbusinesses.
What are they doing that otherpeople might not be like?
What's one unknown secret ofinternet marketing?
Speaker 2 (36:16):
people might not be
like.
What's one unknown secret ofinternet marketing?
Yeah, so let me start with thefirst question.
Um, a focus on inbound isreally one of the big um, you
know denominator, commondenominators.
We see outbound you can flex upand down and that's fine, but
you need you need to focus oninbound in a really steady way
(36:37):
in order to get the that leadgeneration train moving and keep
it moving Like it's.
It's kind of about inertia andyou don't need to focus on every
kind of inbound.
You need to focus on the stuffthat's going to work for you,
given who your customers are andwhat your personality is.
(36:58):
So if you hate public speaking,maybe don't focus on speaking,
right.
If you love talking, maybe dofocus on a podcast.
If you love writing, you couldfocus on writing a book.
There's so many different kindof combinations of things and
you don't have to do all of them, but pick two or three that
(37:19):
work really well and I would saytry them all.
See, you know right, you'regoing to see what works, what
doesn't.
Get some quick information andthen focus in on the the two or
three inbound strategies thatare going to work for you and
then layer on outbound as neededon top, and that can be, you
know, ab testing, like Googleads.
(37:40):
You know we do a lot of LinkedInads.
We have played around meta, butit's never worked for us and
like it kind of intuitivelymakes sense.
But, like you know, we don'thave a social media presence.
Everyone tells you to have one.
We don't and we don't need one,so don't feel like you have to
go out and get an Instagram.
In terms of a secret, anunknown secret that we've seen
(38:12):
work, we've seen work, let me.
Let me focus on, I mean, I dothink it comes back to not
trying to do everything.
Well, and internet marketing,digital marketing is like this
huge beast of a thing, right,but think about who your target
(38:33):
is and where and how they areconsuming information and where
they are finding their trustedsources, and focus on that.
Don't just let everyone tellyou that you have to be posting
on LinkedIn daily and let thatdrive your strategy.
(38:54):
Maybe it's not even onlineprimarily.
It could be like trade shows,right, but there are still ways
to engage online using some ofthese other assets.
So, even you write a book,that's an offline thing, but
there are a lot of ways to usethat online to get more bang for
buck.
Speaker 1 (39:15):
I love what you've
said about just follow your
passion right and you're goingto attract the kind of customers
that will respond to you right.
And that could be different onany different channel.
On how a lot of interestinglyenough, a lot of companies that
are agencies when they hire usso we actually have marketing
companies come to us formarketing and people use all
(39:36):
kinds of different contractors,but it's primarily focused on
generating that inbound, and soa lot of the questions I'm
asking is well, how have yougotten to this position so far?
And a lot of people are likenetworking and people know who I
am and that sort of thing, andand and really I was always of
the opinion when I, when Iactually started at this agency,
it was like like, what's the,what's the magic sauce?
(40:02):
Right?
Like, how do?
How do we drink our ownKool-Aid?
If we're going to sell theseservices, they need to work for
us, right, and so anytime we'redeveloping a new process, we're
always testing it out.
We're trying it out and once itworks for us, we expand it to
our clients and then after that,we would productize it and sell
it to anybody that would wantto come in and do that, and
that's been quite successful.
And you know the inbound you canactually turn up and turn down
(40:25):
as well by enhancing it withadvertising, right, absolutely,
increase those funnels andthat's really what I've seen.
You know the Google rule.
I talked about this on the lastpodcast, 7-11-4.
So you know they need toconsume seven hours of your
content, need to see it 11 timeson four different channels,
(40:46):
right?
And it doesn't matter what thatcombination is or how you come
up with that.
That could be in person, thatcould be anything.
That's what you need to do toattract your ideal customer
where they are right.
Wherever you're trying toconnect with those people and
who's ever going to connect withyou.
You can build that, and I'veseen that, like a lot of our
clients for a long time werepeople that are taking over
(41:11):
their parents' business, thattheir parents' business was run
like it was started, however,many years ago, and I think the
same thing is for agencies,right, depending on when the
agency starts.
If they don't continue toreinvent their self to stay on
the cutting edge, they're doingthings like they learned how to
do it.
That worked for a while andthen what I'm seeing is a huge
degradation and some of thoseold strategies don't work as
(41:32):
well anymore and you got tocontinue to adapt and change,
and so there's a lot ofdifferent factors to consider.
It's funny you're looking atbusinesses.
For a long time, my firstbusiness was a recruitment
company, right, so I was lookingat individuals and I was
assessing businesses and peopleand you start to see a lot of
patterns and commonality withwhat works successfully.
(41:53):
I think that this was extremelyhelpful for a lot of people out
there that have a good sizebook of business and are looking
at, like what to do next orconsidering it If they want to
get in touch with you, jonathan,to find out more information.
How best might they do that?
Speaker 2 (42:10):
Just go to
punctuationcom.
You can sign up for ournewsletter.
We put out insights weekly.
We have a podcast.
You can subscribe to there aswell, and you can just contact
us as you need us.
Speaker 1 (42:23):
And is that not like
one of the best domains?
If you're listening to thispunctuationcom, I mean, that is
just I can't believe.
Speaker 2 (42:29):
Yeah, I mean we
bought it from someone, but I
can't believe that they sold itcan't believe that they sold it.
Speaker 1 (42:38):
I mean it, it, it,
it's brilliant.
And that's where the IP comesinto for some of these
businesses, based on, maybebrand recognition or name or
even domain, is a consideration.
Um, well, thank you, jonathan,so much for being here.
Um, thank you all for forlistening.
Uh, if you do need someconsulting, coaching, um, reach
out to Jonathan.
You can check outmatthewbertramcom.
I've already started to getpeople.
(42:58):
Uh, I got someone on mycalendar later today that that
came in through that.
That's a, a brand new brand thatwe're launching.
Uh, I keep saying I've been,I'm going to do it and I'm
finally going to do it.
Uh, got a lot of books outthere.
Check out the podcast.
Just search.
Um.
Matt Bertram, if you foundvalue in this, please share it
and send me a note.
(43:18):
I love to hear feedback so wedon't have who all our listeners
are.
That's not how podcasting works.
So leave a comment, leave anemoji, reach out to me.
I'd love to connect with you Ifyou want to grow your business
with the largest, powerful, mostawesome tool on the internet.
Reach out to EWR Digital formore revenue in your business.
(43:39):
And until the next time, myname is Matt Bertram.
Bye-bye for now.