August 23rd, 2022
Successful Business Exits
With Laurie Barkman, a business transition sherpa– working with business owners from transition to transaction, an award-winning marketer and strategist, a certified mergers and acquisitions advisor, with more than 25 years of C-Suite and operational experience, and with a broad range of company size from fast growing startups to Fortune 500. Laurie was a former CEO of a middle market company with a successful exit, and a former managing partner of a private equity firm. She works with clients to plan a lucrative exit on your terms. She also advises how to maximize the value of your company, and guides you through the complex process of letting go.
One of her favorite things is having lively conversations with compelling business leaders and thinkers as a creator and host of the Succession Stories Podcast.
Join us for this great conversation as we talk about strategic planning, business succession planning, and business exit strategies. You will also enjoy listening to Laurie as she shares her takeaways on how you can productize your business to create additional revenue.
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Biggest takeaways (or quotes) you don’t want to miss:
- “You never know where things are headed even if you have a plan.”
- “Just because you’re big (your company) doesn’t mean you can’t continue to innovate.”
- Finding the product market fit is really important.
- Where does “growth potential” come from?
- “You’re an entrepreneur for a reason and it’s hard work, so it’s great to surround yourself with trusted advisors.”
“If you don’t create a business that cannot thrive without you, it will be worth nothing.”-Laurie Barkman
Check out these highlights:
- 04:41 Laurie shares where her journey in business started.
- 12:35 How Laurie came up with her company name “Small Dot Big”.
- 14:34 What issues could the smaller entrepreneurs run into in their business journey?
- 18:12 Laurie enumerates some real-life examples of how you can productize a part of your business and create a recurring revenue model.
- 28:42 How does the Scalability Finder work?
- 43:16 “Begin with the end in mind and … have that mindset towards a future transition.”
How to get in touch with Laurie:
On social media:
Learn more about Laurie by visiting her website at https://smalldotbig.com and https://stonyhilladvisors.com. You may also request for a consultation with her at http://www.meetlauriebarkman.com.
Special offer for listeners: You may get an exit value assessment here.
Imperfect Show Notes
We are happy to offer these imperfect show notes to make this podcast more accessible to those who are hearing impaired or those who prefer reading over listening. While we would love to offer more polished show notes, we are currently offering an automated transcription (which likely includes errors, but hopefully will still deliver great value), below.
GGGB Intro 00:00
Here’s what you get on today’s episode of Guts, Grit and Great Business™…
Laurie Barkman 00:05
You can certainly have a valuable transferable business with your name on it. It’s just that I’m bringing it up, because sometimes we find it hard to separate from that when it is time to let go, that might feel really awkward. And so from a psychology standpoint, if we’re not really open to it, it’s not really going to happen. And then you can see where that goes, right. And so one of the other key messages for folks I think, is beginning with the end of mind and ultimately have that mindset towards a future transition. It does take time, it does take your energy and positive energy towards it. If you’re more negative, guess what’s not going to happen, right, you’re not going to have a good transition. And all your hard work is probably not going to pay off for you. And it might be something for your retirement that you’re really trying to create value for. So it can be a lot of money at stake.
GGGB Intro 00:58
The adventure of entrepreneurship and building a life and business you love, preferably at the same time is not for the faint of heart. That’s why Heather Pearce Campbell is bringing you a dose of guts, grit and great business stories that will inspire and motivate you to create what you want in your business and life. Welcome to the Guts, Grit and Great Business™ podcast where endurance is required. Now, here’s your host, The Legal Website Warrior®, Heather Pearce Campbell.
Heather Pearce Campbell 01:31
Alrighty, hello and welcome. I am Heather Pearce Campbell, The Legal Website Warrior®. I’m an attorney and legal coach based here in Seattle, Washington, serving online information entrepreneurs throughout the US and around the world. Welcome to another episode of Guts, Grit and Great Business™. I’m super excited to have Laurie Barkman here today. Welcome, Laurie.
Laurie Barkman 01:55
Thanks for having me. Hi there. I’m excited to be with you.
Heather Pearce Campbell 01:57
Yes. Well, this is a topic that I’m really interested in covering. We have not yet covered this on the podcast. So today we’re going to talk a bit about strategic planning, right business succession planning, business exit strategies and some other things. But for those of you that don’t know Laurie, Laurie Barkman is a business transition Sherpa. Working with business owners from transition to transaction. She advises how to maximize the value of your company and guides you through the complex process of letting go. Lori works with clients to plan a lucrative exit on your terms. Her extensive experience as an executive and certified mergers and acquisitions advisor allows her to understand all aspects of your company and provide the best guidance for a successful exit and business transition. One of her favorite things is having lively conversations with compelling business leaders and thinkers as host of the succession stories podcast. Tune in for insights to reward your hard work and avoid succession regret available on all podcasts and platforms and at succession.stories.com Welcome, Laurie. That’s so exciting. I love… Well, I always love connecting with fellow podcasters. But it’s so fun to be able to point people to such a valuable resource.
Laurie Barkman 03:20
Thank you. And it’s great that we have gotten to know I think some of the same people in this circle. I’ll mention one Lou Diamond who has been on your show. I’ve been on his show twice. And he’s been on mine and we actually met in college. So he and I go way back.
Heather Pearce Campbell 03:35
Oh, wow. I’m such a fan of Lou. Well, and I think Nicole Nicole Jensen, right. She’s the one that I believe is directly connected. You and I. She did, yeah. As leaders of transformation podcasts.
Laurie Barkman 03:48
Heather Pearce Campbell 03:49
Well, welcome. I’m so happy to have you here. I know you are on the other coast. And I don’t know what your weather is like. We’re like getting glimpses of spring but it snowed last week in Seattle.
Laurie Barkman 04:00
It snowed today. It’s actually… yesterday, it snowed. It was ridiculous. Can we please just get spring?
Heather Pearce Campbell 04:05
Right? I know. So I just had to convince rate for a moment. I think I heard that you guys were getting some cold weather. So Laurie, for folks that don’t know you tell us a little bit about your background in business.
Laurie Barkman 04:17
My journey is a little atypical. I don’t think it’s linear. It’s more of a serpentine kind of windy road, which I think has been wonderful for growth and learning. And it just goes to show that you never know where things are headed even if you have a plan. I was looking through some old papers my dad gave me and apparently I wanted to be an artist when I was eight years old. Well, let me tell you that did not happen. In high school, college. I kind of got the sense of business. What’s this? I majored in human resource management, which I’ll call the psychology of business, which really got me on the path of organizational development and understanding what makes people tick and how do you make organizations thrive? But then I realized I have wanted to change industries and career fields, which is a big thing. How do you go from being in manufacturing and human resources to what I wanted to do, which was to go into marketing and technology? And the answer for me was to go to business school and use that as a pretty significant career pivot. And that began my journey in marketing. I’ve had a long career, I say had as in the past tense, but I still do marketing of course, but really as a career marketer for 20 plus years. And we I’m sure we can dive into it more if you’d like. But that experience in both startups and corporate big big COEs, I like to say small CO and Big Co and everything in between. I’ve sort of seen it all. And I also have worked in corporate startups. And so how that brought me to another significant change in my career was when I had the opportunity to interview for the CEO position. And my ecommerce background was helpful to get in the door. But that was not an easy thing to be a part of that. And I did get the job. And that significantly changed the trajectory of my career going forward, that also led to an exit that the company sold, and that was what got me exposed to mergers and acquisitions. And what I do today, and kind of this very, very fast flash forward, is working as mentioned in my bio, from transition to transaction. I’ve been through so many transitions in my own career. And I have a high degree of being able to handle ambiguity, but how can I help clients now be thinking about their change and their transition, and planning that out? And so when I talk about change, and transition, there’s the business side, but there’s the personal side too and then there’s what happens? How does this process work? It’s a whole process. And if you haven’t gotten exposure to it, it kind of feels like a black box. And it is. And so now, as a merchant, certified mergers and acquisitions advisor, I can sit on the other side of that table and be part of that process. So you know, I’ve just summarized like, 30 year career here in two minutes. And I can also share kind of a fun backstory on all of that, in terms of the name of my firm and how I picked it. But I just wanted to give that.
Heather Pearce Campbell 07:15
No, I love that. What was it that most attracted you to business?
Laurie Barkman 07:21
Initially, it was the leadership angle? And how can you create something? How can you build something? How can you make an impact? When, for me, I didn’t have a lot of business experience, I had some scrappy, you know, teenage, selling experience, you know, door to door with this, and that, but there was something inside me that really was interested and making stuff happen. You know, student senate president for two years in high school and all these things. I liked the idea of leading teams in sports, and was getting more experienced with that. So I think as in the young age, you know, some people might say that I was sort of one of those people who was seen as a leader. And I wanted to translate that into a larger setting. And I was just drawn to business. I think it was just like a magnetic field. It just seemed like other professional fields. Were not it. I might have thought about law for half a second. Or I might have thought about, can I be an artist? Like I was joking about when I was eight years old. But those just didn’t draw me in the same way.
Heather Pearce Campbell 08:28
No, understood. And it sounds like you’ve worked with quite a range of businesses, right? You said everything from a small code to a Big Co? What’s your favorite?
Laurie Barkman 08:39
It’s funny, I think it’s a moment in time answer. Hmm, there’s aspects of startups that are very exciting. And you know, you’re part of a journey, and we don’t know where it’s going to end. And I have, as I mentioned earlier, a high degree of being able to handle ambiguity. And you have to have that in a startup environment. At the same time, one of my superpowers is structure. And so for me, the combination of being in an unstructured environment and bringing structure to it just was a good fit. And startups it’s kind of a misnomer, where you think, oh, startups, you know, you get to do whatever. Well, startups that don’t have structure don’t go very far. Let me tell you, they die on the vine because they really need structure. And then if you kind of jump over to the large, well established corporate entity, they have a process, they have many things you don’t have to worry about and figure out like who’s doing payroll, that’s all figured out already, and where the coffee machine is coming from. But what they don’t have, the less often is the innovation side. One of the things I didn’t include in my bio, but I’ll mention is I’m an adjunct professor at Carnegie Mellon University, and the corporate entrepreneurship class that I teach is all about that as well. under this intersection, and it’s about how large companies can be innovative and create innovative businesses, just because you’re big doesn’t mean you can’t continue to innovate. And so how companies do that is really, really interesting. And so we work with student teams to help on specific projects that are like top secret, but it’s pretty cool to see how the student process works, because they are not used to that environment at all. But I would say summary wise, you know, for me, in that experience, in what what do I like, it’s always been this intersection of where mature companies can be learning from startups and how large or small nimble startups can be learning from more well established and finding the kind of the Win Win and either of those situations, and that’s why I’m giving you the answer for me has been both.
Heather Pearce Campbell 10:48
Yeah, no, I love that. I love that. The comparison and the contrast, because I think anybody who’s ever worked at like, for example, in my industry, as part of a small group, as I helped a gentleman years ago, who left, it was more of like a small to mid size firm, but leave on his own and really build a boutique, you know, a group of like seven or eight attorneys that was, you know, super nimble, small and, and that’s what he wanted, he was so frustrated by the mechanics of trying to even have a decision making process that he felt like, you know, was working, and he was one of the founding partners at that original firm. But, you know, there were 50 or 60 people by that point. And even though that’s not a, you know, really large company, it still impeded the decision making process enough that he felt like he really needed to start over and create something that was smaller, that can really be nimble and responsive. And so it is interesting to watch that happen. And kind of see the constraints of both sides. Because, you know, the small shops have to figure out a way to get those systems in place and essentially, have a scrappy team that does it all. They still have to face some of the things that big businesses face, right, just in a different way. And then the big businesses can get slowed down by bureaucracy, decision making, you know, and I think also within certain industries, there can be less innovation, right? So tell us a little bit about your current company, small dot big and I am curious about the name share with us the backstory of that
Laurie Barkman 12:35
I was playing pool with someone from Australia. And that’s where the story starts. And in America, we say, solids or stripes. But in Australia, they say small or big dot. Interesting. And for me, that memory stuck when I was thinking about the name of my firm, because I’m a marketer, and I was trying to be kind of different and thinking about something in a unique fashion, there’s a couple different angles to the name. One is the inspiration from playing full. But what did it mean, it meant that I was seeing something in a new light, someone had given me a different perspective, this aha moment. And that’s essentially at its core, what I’m trying to do with clients is help them see what they’re not seeing. You can’t unsee it once you see it. Right, right, and a new perspective that I sometimes find so valuable. And that was one angle, the other angle is small.big.com, which is kind of a cool little, you know, but essentially at its core, and the logo, if you see the logo, it does rise up to the right. And so that perspective of how do you start with something and have this intent and a goal to grow? And so growth is really underlying, what would I do with clients and the firm name? The ethos is about growth, and it’s also helping people see things from a new perspective.
Heather Pearce Campbell 14:03
I love that. So particularly, and let’s talk specifically about the smaller entrepreneurs, right? What is it that they are not seeing, right? You’ve got all this experience in a field that many people don’t even look into until they’re well into their business journey? What is it that folks are not seeing?
Laurie Barkman 14:24
What are they not seeing? It could be any number of things we could pick a lane and say, what are they not seeing in terms of their people or t you know, the team they want to build or the market space? Probably the number one place to start is do you really understand your market that you’re in? Do you understand your customer persona? And what is it about that persona, the people in the audience, they might not know what a persona is, we could talk about that and why it’s useful to have one or have multiple, we could talk about the pain points. You know, what pain are they solving a lot of times, especially in tech, if you have cool tech, you’re trying to find a market If that can work or that can not work, right, you can see a lot of venture capital firms investing in something that ultimately, there was no problem to solve and not not to pick on.
Heather Pearce Campbell 15:10
Cool gadget, huh?
Laurie Barkman 15:12
Yeah, I mean, sometimes we think that we’re solving a problem, but the market isn’t willing to pay for it and can’t fund the research and development that’s gone into developing that really cool product. So finding what we call product market fit is, is really, really important. And if you’re getting traction with customers and revenue, and you’re finding your product market fit, that’s great. You can continue to iterate on that. And maybe it’s around your pricing that you’re finding you’re getting stuck, or maybe it’s on product or service delivery, you know, maybe there’s bottlenecks in your process. So it really could be you know, there any number of things, it could be that the the folks who are more creative, or they have a craft, you know, a craft can be a skill, like a like law or medicine, or you have a profession, right service providers, service providers gotten trained in that. And you’re providing that service really, really well. But how does that scale? Can that scale? And that can be an issue for folks. It could be around the nature of the relationship with clients, you know, are we creating? Sometimes I talk about productizing, your service? And how can we think about that, could we create a recurring revenue model instead of that one time revenue, so we could, you know, think through all those things. But there’s any number of factors. I think entrepreneurs can run into challenges and issues as they’re trying to build their business. And I love my show, and I get entrepreneurs on. I just interviewed a woman the other day, and she talked about how she and her husband created a company literally from scratch. They didn’t know what they were doing. They had two young kids literally like three years old, they were working nonstop. And they were proving product market fit and they knew they were on to something, and then ended up becoming a company they sold for $100 million. Eventually, you know, 10 plus years later, but that journey of 10 on 10 years is always sort of this magic number here. But what goes between zero to 10 is a lot of iteration, a lot of trial and error, a lot of resiliency. And so you’re asked me kind of a tough question, because it’s really hard to pinpoint, you know, what are entrepreneurs running into for issues?
Heather Pearce Campbell 17:30
Well, I think your answer is, is actually perfect, because it highlights the complexity of entrepreneurship. Right? It’s often not just one thing, there are so many problems to solve so many hurdles to clear. And depending on the business, depending on the market, depending on the offer, it could be a variety of things. For let’s I love the topic of especially for service providers product type thinking of how to productize a portion of their business, right, and create a recurring revenue model. Talk to us a little bit about either your experience or what you have seen with clients in that space.
Laurie Barkman 18:11
Yeah, I mean, one example would be, you know, during COVID, there were companies that pivoted to create other options. So I’ll just share a couple of examples that are like, in LA, there was a restaurant selling, you know, a menu, they have a restaurant, right? They still had nothing on the menu, but what they did was they created taco kits. So you can buy the taco kit and enjoy it at home. And so they created this product, instead of the dining experience. If you think of that as a service, they really try to understand their customer. And think about that. Another example is again during the COVID. You know, when we were all really worried about sanitizing everything and wiping down our groceries, we were all thinking probably about our vehicles to and a carwash company instead said, okay, you know, we want to really understand the pain point in the market and we’re going to sell packages around sanitizing in addition to cleaning the outside of your car, and so that might…
Heather Pearce Campbell 19:16
Sanitisation kits or something.
Laurie Barkman 19:18
Yeah, exactly. Now, another example could be around a yoga provider, that’s probably something that everybody can understand. Right? If you are selling your yoga experience, right and your clients are coming to you, well, what if you put together more of a package and more of a bundling. An example could be to there’s an accounting firm that when you when they look like everyone else, they their commodity service, they had tax prep and they had monthly reconciliations and if they listed all their services, again, it looks like commodity And if you put that on kind of a two by two axes and say, Well, what’s more differentiated what’s less differentiated as one axis. And the other axis is kind of, maybe we could look at how sticky that is, or price people are willing to pay for it. So there’s different ways you can kind of model it out. Either way, we want to be sort of up to the right. And this accounting firm did that. And they realized they’re again, looking more like a commodity. And they’re kind of in that, yeah, we’re in a competition, you know, low margin, lower margin, what could we do, and they, they pulled it apart. And they said, you know, if we create a bundle, we create a service bundle. And we brand it and they called it boss dlss. And it stood for something which of course, I don’t remember. But they created this product bundle of boss, and the difference of what that was, versus just hey, we’re an accounting firm, is the boss service stood out as something that took more commodity pieces of their service offering, but they sought to understand from the market what the market might want. And when they packaged it and branded it, it really made a difference. Another example is a flower retailer, and they had a flower shop in Chicago, wherever it was. And just like, you can imagine, there’s a high perishable degree with flowers, these are, you know, this is not fine wine, these things are expiring. So you gotta have a good amount of volume. And they were selling bundles of flowers for like $25, or whatever, right? So their average order was like 25 bucks. Well, what they did was they got smart, they took their list of clients, and they kind of stack ranked it and what they found looking at forensic ly, and they said who or who was buying from us, they found a cluster of hospitality. Clients, there was some repeatability to what they were seeing. And the average order, from hospitality, like restaurants, hotels was a lot higher. So what they did was they pivoted, instead of having this consumer facing, they refocused the business. And they created a recurring revenue model on delivering flowers to hospitals in Austin, the hospitals to hotels and restaurants. And they focused on that. I love that example. Because their average order went from $25 to like, $1,500, right and, and they created enough value in that business where initially and say, oh, there’s not a lot of value in a retail flower shop. But they created enough value that they were able to sell the company and have a pretty good exit. So I love that idea like they created a brand and a recurring revenue stream from something just by really looking at their data. And when I said earlier about kind of solving a problem, while they were solving a problem of picking the flowers and delivering it, who wants to worry about that, we take it off your plate. So in creating recurring revenue streams, and subscription models, there’s like nine different types and sort of a summary fashion. I won’t go through all nine, one of those things is taking care of your plate, so you don’t have to worry about it anymore. And that’s kind of what they did. Right? And so anyway, I hope those examples were helpful.
Heather Pearce Campbell 23:31
No, they were great examples, the thing that I loved about them is, and what people could be thinking about who are listening to this conversation is what am I already doing, or already offering, especially those last two examples, right, that I can either just simply repackage or offer in a slightly different way, or look outside of my maybe my normal scope of clients or get more focused on a subset of clients. It’s, I mean, it’s, those were, I think, really great examples for the types of businesses that I serve. So even one thing that I’ve done recently, in my own work right in the legal field, which to be clear, is a slow moving very traditional industry, right. So in my mind, what that means is that there’s a lot of opportunity, because historically, we’ve not done a great job of meeting the needs in the marketplace. But I put together looking at what I was already doing, and did just that, put together a program called My Catalyst Club program, it’s for a certain level of small business client that needs they’re quickly scaling, but they need a certain amount of ketchup work done to their legal foundation. And they’re a small business. They don’t want to have to worry about being billed for every minute. They’re on the phone with their attorney or every time their attorney is, you know, drafting a new document for them. them or whatever. And so I bundled it in a way where it’s a flat fee price, right, there’s a very clear outline about what’s included. And it’s a combination of both done for you services, and product like essentially product type service through, basically providing access to a whole database of documents that I’ve created for entrepreneurs that I actually sell separately as a DIY kit. Right. But now, it’s just included in the service. And it’s a year long program, which means they get access to me for 12 months, and it’s not basically any additional cost. And so, the reality is that selling that, like a $25,000 offer, takes no longer than selling a $1,500 bundle that I offer, or even a consultation sometimes if you know, it has everything to do with offering what people need. And so I love that I would love for the folks that I serve that are not yet into having created a productized version, either of their service or something that they can offer to start exploring ways that they’ve, they already have the components, they just need to stick them all together in the right way.
Laurie Barkman 26:20
I love your example, Heather, that’s a perfect example. And I’m going to use that now when people ask me for stories, I’m going to share yours. And I’ll also mention it’s something we can put in the show notes. And I’m happy to do it at the end of the show. I have an ebook that people might enjoy, which is on this topic of productizing your services. So that might be helpful for them.
Heather Pearce Campbell 26:42
Oh, I love that. Yeah, we’ll definitely share that. If you’re listening, be sure to hop over and check that out. And we’ll, we’ll share also the link to the show notes at the end of the show. Well, that’s I mean, I love first of all, there are so many ways to do that. And for me, it really invites curiosity and like conversations around how we get more creative in our work and in our services, or even the example about really crunching down into the numbers, sometimes it just takes having a longer harder look at what we’re already doing. I think it’s really easy for folks to get stuck in a rut like, well, this is how it’s done. This is how it’s done in the industry. You know, and staying a little bit in that for anybody who’s read the blue ocean book, right? red ocean blue ocean conversation, staying in the red ocean, which we shouldn’t want to stay in. So I love it because I think those are both ways the product to zation, the, you know, productizing some part of your business, getting more creative about your services is how you get out of the red ocean into blue ocean strategy.
Laurie Barkman 27:55
So this is where my consulting and teaching hat comes in. So one of the exercises that I do with clients, I can kind of describe here on the show, and we’ll want to try to do it themselves. Here you go. And if they want to follow up with me, you know, I’m more than happy to talk to them. So what I call it, we call this the Scalability Finder. And one of the platforms I use is called the Value Builder System. And it’s one of the one of the great exercises, we typically start with a client early on in the engagement because it’s a pretty fundamental building block. As you were talking, Heather, I think you’ll probably relate you did this without knowing. I mean, you did it knowing that the language I mean, you did it knowing full on what we were doing, which was great. So we call this the scalability finder. And when what we’re trying to do is, say of what you do today, what is teachable, what is valuable, and what is repeatable? So let me define those. So teachable means you literally don’t need to do it, you can teach someone else to do it on your team. Some people have asked, Well, what does that teachable mean? I can teach it to my client? What’s this one is really more of an internal teachable. So in your business? Do you literally have to deliver that service? Like it’s so specialized, only you can do it? Or can you teach other people to do it? So that’s an internal kind of question. The valuable question is an external question, right? How valuable is it to your audience or to your client base or your customers? Are they willing to pay for it? And you can assume yes or no if you know the literal answer, great, but if you have to make assumptions about the Soviet, what’s the degree that they’re willing to pay for that? And then how repeatable is it? So repeatability has to do with frequency so it might be Yeah, they’re willing to pay a million dollars but they’re only gonna pay that once and you’re done. You know or think about a wedding right? If you’re a wedding photographer, your weddings that you’re going to do are probably pretty valuable because in theory, you’re gonna have only one wedding, you want to have high quality photos. But it’s not that repeatable with your audience unless they’re getting divorced and married a lot. Right? So there’s dimensions of repeatability. And then others have said, well, Laurie, should we include a profit measure on that? Yeah, sure, no problem. So there’s some aspect of it, which is teachable. How valuable is it, whether it’s revenue number or profit number, and how repeatable is it and we can come up with some numbering systems. So if you want to use one to 10, you want to use one to five, whatever you want to do, but you’re going to do some math, and you’re going to, we’re going to do is you’re going to enter in a little table, you’re gonna list out your services, you’re going to break it down, and get creative. Like Heather, you just rattled off a whole bunch of things that are in your bundle. So when you were thinking about this as a service, bundle, productizing it you were listing out all those things that you could offer, right? And then you were thinking about, well, how valuable are these things, right? And you have a mix of the commodity and the knowledge, not commodity and your time is obviously not, not a commodity. And that was part of your bundle? And then to repeatability? How often are they going to come back? Sometimes folks already know the answer. So sometimes they have to do some market research. Maybe they gotta go talk to customers on Zoom, or face to face or surveys. But breaking it down this fashion helps us see well, where might we scale. So if we go back to the photography example, and we say, well, the photographer could do weddings, they could do baseball teams, sports teams, they could do corporations. And in this example, we find that this particular photographer, went towards the school photos, because the school photos had a repeatability to it, they did have enough value to it, and it had kind of this recurring nature to it, whereas the weddings did not. And the challenge with corporate was that it was more specialized, and it was hard to teach. Yeah. So again, using that as an example, even the accounting example, same thing, that Bas, right, they kind of use a similar methodology. How can they, you know, package or bundle? So the T, I call it TVR, the scan the scalability finder.
Heather Pearce Campbell 32:20
No, those are great things to be looking at. And I think especially the repeatable one, people can miss that it’s, I know, even personally at times how in a small business, it’s so easy to focus on getting the next client versus what can I do to take care of the client that I already have? What comes next either on the client journey, or so for example, in my catalyst club offer, some businesses could repeat that on an annual basis depending on how much support that they need. But some of them might need to move over into more of a membership model, where there’s less of the intensive build out, because we’ve already done that, and more of just ongoing maintenance, right. So I think that a lot of people in business forget how much value is sitting there already in their existing customer base versus turning around and trying to hunt down the next customer.
Laurie Barkman 33:17
That’s a really good point. And that’s another module or another, you know, area that I work on with people, we call it the growth potential. And growth can come from a variety of places, it can come from your current customer base, it can come from adding a geography. For some, it’s buying another company, you know that so there’s organic growth, or there’s acquisition growth. And now I’m putting my M&A hat on. But for companies that are in organic growth mode, it’s all about figuring out your marketing, getting your, you know, making sure that your marketing dollars are working for you, you’re measuring them appropriately, certainly depends on the type of business you have and and the baseline metrics that you’re going to be looking at whether it’s CAC and LTV and that relationship that that index to each other. Certainly in SAS businesses, you know, you’ll see those a lot, but you can also have customer acquisition cost measurements, as as any business frankly, should be looking at these numbers. It’s one of the first things I asked people, well, what’s your customer acquisition costs? And how’s your retention and all this stuff? Yeah, and those measurements do matter. And so if we take the growth potential as, hey, if someone’s going to buy your business one day, maybe that’s an exit strategy for you. Maybe it’s not, but let’s just say it is, then what’s their potential with your business if you are aiming to sell to the fortune 500 And you have successfully gotten 498, hey, congratulations. That’s awesome. You’ve really proven that out. But what does that mean for growth potential, that means there’s only two left to go get? As opposed to the real story, the software company decided to focus on the fortune 500 they secured to clients, each client worth a million dollars, and then they went to market. And they said, We’ve proven we’ve proven this out, we’ve got these two Fortune five hundreds. And the acquirer had a certain interest in the 498. They also had some of the Fortune five hundreds as already other client bases. And for them that was a cross sell. And so to your point, yeah, absolutely growth potential can come from the scalability opportunities.
Heather Pearce Campbell 35:27
Mm hmm. When you’re working with small businesses, what, because I’m particularly interested in advice that you would have for them about, about creating a business and shifts that they could make in their mindset or their strategy to create a business that is sellable.
Laurie Barkman 35:47
This is a really important question. And it comes to the core of why what’s motivating them. If you have a business that makes you happy, and it’s something you as a, let’s say, a craftsperson, you just enjoy the work. And it isn’t inherently something you want to transfer to someone else, it will probably stop there. If you believe that what you’re creating has some value that one day you’d like to be rewarded for. Maybe some people don’t think that’s possible, but it might be it might not. But it might be. If you think that way, in terms of the future transition, you open up the mind to possibilities, what I like to talk about with my clients is options. Let’s have options. If you don’t create this is going to shock you. But if you don’t create a business that cannot thrive without you, it will be worth nothing. That might be okay, if you say yeah, that’s okay. I’m not intending for it to go anywhere. I’m just proud and where I’m at with my life. That’s all good, okay, great. But if you are intending for this to be a legacy, no, you maybe you want to transition to the future, if you’re the founder, and you want to transition to a third party, or maybe to family or maybe to a management team, then you have to really think about it if we can invoke our favorite Stephen Covey saying, to begin with the end in mind. And if you do that, it can open your mind to a transition mindset, it can open up to thinking about these possibilities. And what I like to say is we reverse engineer, what your business might need to look at, to create that value. So that one day, when you’re ready to pass the baton, we have the plan kind of laid out as to who might be the successor, whether again, an outside party or an inside party. I also bring up Stephen Covey because it’s such a good relevant example as you we talk about these practitioners, right. And we might have people with services businesses that are practitioners in some craft. And Stephen Covey was that. And I was fortunate to see him speak in Pittsburgh many, many years ago. But if we think about his business, right, he was front and center. From the teaching and the speaking and the writing. We all know his name. But what he did was he created a methodology, he created a process and obviously his son, I think is I don’t know if he’s still running the company, but I think he was at the time of Stephen’s death. And it was something that had transferable value. And it’s okay, you know, it’s not okay that he’s passed. I mean, of course, we would love for him to be with us. Stephen Covey has passed, but look at me today, I still have his books on my shelf. And I’m still talking about being in his audience. And I remember that, but it’s the content and the workshops that live on. And so Stephen Covey, to me is a great example, not only for the words to begin with the end in mind, but they did that they created a valuable transferable business, even past his, you know, his existence on earth.
Heather Pearce Campbell 39:13
Well, and I think that is honestly such a perfect example, particularly for the audience of folks that I serve, who are experts who are even many of them building personal brands, just like Stephen Covey is a household name for anybody that has studied business any length of time. Right? There are folks that have that same opportunity in their field and whatever they are doing. And it’s interesting, even around because I am in law, right? I’m talking a lot with people about intellectual property and what are the business assets that they’re creating inside of their business and if they can understand earlier in the journey, that especially for these information based businesses, and they’re largely service providers, coaches, consultants, they’re putting on workshops, their teachers, they have, how many of them have a servant’s heart? Right, a teacher’s heart. And this is what they’re doing as an expert in their field, but that they can create systems, frameworks, methodologies, right, all of the things that you mentioned that, that inherently build value in the business that they leave behind, and, and that that does then become a transferable asset. And I love that it’s just such a great example of what people can aspire to, in, they can infuse themselves into the business, but also build a business that has plenty of those assets and Systems Incorporated.
Laurie Barkman 40:37
Yeah, absolutely. I mean, essentially, what I’m saying is, build a company that can thrive without you. And how you do that there’s no one answer, but there’s some fundamental pieces of it. But some of which we’ve already talked about, right, creating processes, creating systems, creating things that can scale, creating things of value that your team internally can utilize, and then also that your customers care about. But then it’s also eventually as you get larger, and you have more revenue, it’s surrounding yourself with people on your team. People might be shocked to know that in my business assessment that I do, one of the questions we ask is, how many hours a week are you working? And can you take time away? And the point scoring goes up, the more time you are away? It’s kind of counterintuitive, right? Yeah, there’s one woman I spoke with, she did the assessment and I said, what were some of your biggest surprises, she said, and she’s a photographer, and has a creative agency. And she said, I was surprised to learn that I’m holding my business back.
Heather Pearce Campbell 41:48
Oh, yeah. Now how many people I mean, end up learning that in some painful lesson, right, that they’re the bottleneck to their own business growth, for sure. We’ll end it is, you know, I mean, what a worthy goal to be building the kind of business that allows you vacation, allows you time off, and ironically makes that a more sellable business. It does.
Laurie Barkman 42:09
And but it’s sort of this strange irony, because we’re so sometimes so wrapped up in our identity. One other question is, you know, is your business named after you? So a lot of us use our names, right? And that was the other thing for me. I purposely, I thought about this, and some of my friends said, Lori, you have such a strong, you know, call it brand recognition in the digital marketing space, and should you do that? And I said, I really thought about it. And I said, No, and my mother in law had a firm and it was Barkman International. She said, Do you want it? And I said, No, I just really thought about it as something where I didn’t want to have my identity on it. And some people do, and I’m not criticizing it, you can certainly have a valuable transferable business with your name on it, it’s just that I’m bringing it up. Because sometimes we find it hard to separate from that when it is time to let go, that might feel really awkward. And so from a psychology standpoint, if we’re not really open to it, it’s not really going to happen. And then you can see where that goes, right. And so one of the other key messages for folks I think, is, if you want to begin with the end of mind, and ultimately have that mindset towards a future transition, it does take time, it does take your energy and positive energy towards it. If you’re more negative, guess what’s not gonna happen, right, you’re not going to have a good transition. And all your hard work is probably not going to pay off for you. And it might be something for your retirement that you’re really trying to create value for. So it could be a lot of money at stake.
Heather Pearce Campbell 43:42
Yeah. Well, and I mean, you raise an important point, even about the naming of things, whether it’s our business, whether it’s a methodology, or signature program, or offer, like so many people, and there was a woman who created a methodology, and she had used her last name, right, and was looking at trademarks. And there’s this whole thing around using a personal name and obtaining a mark around it. Sometimes it’s doable, sometimes it’s not. But it’s, you know, when I intersect with people early enough on their path, I’m having that discussion with some around, what is your plan for this business, because again, but to back to the quote that you mentioned, begin with the end in mind. So many people can take a misstep, even at the start of the journey where they had slowed down enough or had a little guidance or little hand holding, they might have shifted to creating separately a company or a small business that has its own brand separate and apart from them being the personal expert in that brand. Right. And it is a really important part of the business building consideration because you I mean, it. It really changes the way that you build your business. Yeah, absolutely. Yeah. Well, Laurie, I want to be respectful of our time. I feel like We could just talk about it, it’s like so much more within this topic. Let’s pause for a minute and let people know where they should connect with you. Where do you like to show up online?
Laurie Barkman 45:11
I’m on LinkedIn a lot, you’ll see me on there and would love to connect with you let me know that you heard me on Heather’s show. And they can visit me on smalldotbig.com. So it’s D-O-T in the middle there. And we’ll put some links in the show notes for folks. For these, I have two e-books that they might enjoy, one on SOPs and one on productizing your service. So we’ll drop those in there. And then also, you know, if you want to just kind of jump to scheduling time with me, another URL, if you want to go to meetlauriebarkman.com , is to schedule some time. I’m happy to talk about a business assessment with you.
Heather Pearce Campbell 45:49
Oh, I love that. And that is such a generous offer if you are listening. So Lori, we will share all of those links, including your social media links at the show notes, folks, you can find those at legalwebsitewarrior.com/podcast. Laurie, what final either tips or message would you like to leave our listeners with today?
Laurie Barkman 46:09
Oh, just enjoy the journey. You know, you’re an entrepreneur for a reason. You are enjoying what you’re doing. You’re building something, you’re creating something. And it’s hard, hard work. So it’s great to surround yourself with trusted advisors, like Heather or maybe you know me one day to help you in your business transition when you’re ready. And I would enjoy those conversations. And I know how they’re doing too.
Heather Pearce Campbell 46:35
I sure do. I love talking business, which is why I literally could do it all day long if I had to. Well, Laurie, thank you so much for spending time here with us today. I’m really excited for people to get to know a bit about you and to hopefully pop over and take advantage of some of the resources the ebooks that you mentioned. That’s super generous. Folks, if you’re listening, jump over and do that. And I would definitely take Laurie up on her offer for an assessment. That’s huge. Just even small bits of guidance earlier on in the journey can make such a tremendous impact. Laurie, thank you.
Laurie Barkman 47:08
Thanks, Heather. It was a joy to be with you.
GGGB Intro 47:13
Thank you for joining us today on the Guts, Grit and Great Business™ podcast. We hope that we’ve added a little fuel to your tank, some coffee to your cup and pep in your step to keep you moving forward in your own great adventures. For key takeaways, links to any resources mentioned in today’s show and more, see the show notes which can be found at www.legalwebsitewarrior.com/podcast. Be sure to subscribe to the podcast and if you enjoyed today’s conversation, please give us some stars and a review on Apple podcasts, Spotify or wherever you get your podcast so others will find us too. Keep up the great work you are doing in the world and we’ll see you next week.