John Warrillow
it’s it is arguably one of the most vexing challenges that a lot of entrepreneurs have is how do they tell their employees who many of whom are family members, or they treat them as if they were family members that, oh, by the way, I’ve just sold my company. And this thing that we’ve all created together is no longer, you know, independently owned. And, look, here’s the thing, I think you have to make a case as to how they benefit, right? So believe it or not, when you walk in your office doors, they see the top of the rung in the career ladder, right. And that may be hard for you to hear and you may be a great boss, but at the same time, you’re probably running a relatively small company and for a lot of people ambitious people on your team, they’re going to want to get Get to the next rung on the ladder. And, frankly, you’re in their way. So in some cases, the pitch is, look, I’ve, I brought this company as far as I can, but man, you guys deserve more, you need a bigger company, a bigger field to play on. And this is enabling us to do this. It’s going to enable us to achieve our vision. I think you can’t lie. You have to be authentic in what you you’ve delivered. I think the other thing to talk about is to tell people look, I’m looking to define an investor, underscore the word investor as opposed to acquire, I’m looking to find an investor who can get us to the next level. And if that conversation then morphs into an acquisition conversation, well, you weren’t necessarily being disingenuous, you were looking for an investor that happened to expand so I think there’s some ways that you can, yeah, you can get around the conversation. But look, it’s a challenging one. A lot of people feel betrayed when they when they find out.
Jeremy Weisz
I you know, I love the way you lay it out, paint that picture of how it’s going to benefit them, and I think you know, that That piece alone is worth the whole, you know, getting the book. But there’s another piece. It’s the subtleties of the language that you talk about in the book. And one is client versus customer. And that alone, I think is like another was it sounds simple, but it’s almost groundbreaking. And so yeah, talk about that.
John Warrillow
Yeah, that’s a bit of a different idea. In the sense they’re service companies in particular and built a cell is really about how do you take a service company and make it into a sellable asset and service companies are usually David Ogilvy said, you know, like, the assets go up and down the elevator of night, there’s no assets, there’s no wonder like trucks or infrastructure that you could sell. It’s a lot of service company, people think that don’t really have much to sell. They may have something to sell, but it’s contingent on making these big, bold changes to make the company able to succeed without you. And one of the ways to do that is to productize and productizing is to make what you have today, even though it’s a service sound like it’s a product right? So in the book There’s a marketing services company that does everything under the sun. And he morphs the company into the five step logo design process, right? And so it’s a process and it’s got five steps, and it’s all done always feels very tangible. And part of that is the lexicon and it sounds superficial to some people. But changing your vocabulary around the way you talk about your company can suddenly communicate to an acquire, that you’re more than just a collection of people doing service work. So for example, avoid the word client. No one’s gonna care if you call them customers, but company’s products have customers, service businesses have clients. Engagement is a service company word right? Or as a, you know, a project is that so there’s some some very important words and lingo that you can make that change. Yep,
Jeremy Weisz
no, I thought that was an important piece of it. And it’s like product versus service company and studying what the product companies do because as you mentioned, you You know, there is a higher valuation right for a service company versus a product company.
John Warrillow
You bet. I just did a podcast last week with a woman named Debbie king who ran a company called Association Analytics. So she was like in the in the hamster wheel that most service companies find themselves in. She’s, she does analytics for membership organizations, and she focuses on your big projects, she would personally have to get involved in each. She built up to 20 employees yet she was personally involved in every project because every project was different. It’s a mess. She goes to an m&a guy and says, Look, I want out I’m done. I’m tired. I want out and the m&a guy looks across the table and says Debbie, like there’s nothing that I can sell here. I mean, it’s worthless. And Debbie’s hearing this for the first time and your jaw drops, right? She could 20 employees, she thinks she’s sitting on a goldmine. And the guy goes, No, you got nothing and I can’t sell it. And so what she picks herself up for the mat. She goes and product izes her service instead of doing projects. She does a analytical dashboard, she creates a dashboard because she finds that a lot of these membership organizations have the same questions. And she puts it up in the cloud. And she says, look, you subscribe to this dashboard, you upload your membership data. And you can do all these queries, who’s likely to trade who’s likely to buy more, who’s likely to sponsor etc. You can do all those queries on your own. And it becomes a product, she morphs the entire business and ultimately sells for more than seven times EBITDA very healthy product type multiple. But yeah, it’s all about moving from a from a service company into more of a productized business.
Jeremy Weisz
Yeah. In john, I want to talk about early on because you have a similar story. When you first went to sell your business. What What did what did they tell you? What happened at that point?
John Warrillow
Yeah, it’s very similar story. We were doing custom market research. I mean, Debbie, and I could be interchangeable. We were doing custom market research big clients. big projects, but very unscalable. Right? I was personally involved doing a lot of the work. I built it up. I think we were at five or $6 million in annual revenue. We had clients like Microsoft and Bank of America and American sports, all these like blue chip clients. And so I go to this m&a guy. I’m like, I want to move to California. I’m done with this business. What do you think it’s worth? And the guy looks at me and says, not much.
Jeremy Weisz
Wow, me. Like, that’s shocking,
John Warrillow
though. devastating. Oh, yeah. Very, I mean, it’s like telling you child, you’re the mom the check the kids ugly. And you know, it’s brutal. But, you know, we we made some big changes. After that. I looked at one of the companies getting better valuations. And it turned out that the subscription based research companies, the likes of Gartner and Reuters and Thomson Reuters, and Bloomberg, were getting much better multiples because they’ve morphed into a subscription service and that’s what inspired the change and ultimately, that company was acquired by one of the big subscription services that Ultimately now is called Gartner group which bit you know, based on ne
Jeremy Weisz
Wow, what were some of the one or two changes that you made initially that were really impactful? That you know, okay, I need to shift.
John Warrillow
Yeah, the big one. And then I think the most important one, it Debbie, by the way did this as well as Association analytics is to niche down. Here’s the problem. When you’re a service company, you have the luxury of morphing yourself for whoever you’re in front of that day. You want it in red, no problem. You want it in green, you want an extra large you want it, you can do all the changes you want, because you’re listening to customers objections, and you can morph yourself because you’re providing a service which is unique every time. If you’re going to create a productized service. it’s incumbent on you to niche way further down than you’re naturally inclined to do. And so because when you niche down you can get to a point where a set of customers have a homogeneous need. And when you have a homogeneous need, you can then create a public To address that, if you’re too squishy and too wide in terms of your product, your product is essentially going to be nothing to nobody because it’s just going to be too insignificant. Anybody at Association analytics, what Debbie did was he she looked at her customers and said she had small associations big medium sized, she realized the ones who would use this dashboard would have a consistent need for these running these analytics were large enough that they would not on their own be able to manage the customers in their head, right? Like if you’ve got 200 customers in a membership organization, you could pretty much manage them in your head right or with a spreadsheet. She knew that once you reached 5000 customers, it was way beyond anyone’s ability to kind of member remember people so you needed analytics. And so her product was focused on a membership organizations with at least 5000 members, guess what, that’s a tiny sub segment of associations, but it isn’t able to rebuild a really compelling product. In our case, what we decided was We did research for Fortune 500 companies that wanted to reach the SMB market. So by definition, our target was fortune 500 companies of which there are 500. And then a subset of those which had a business to business offering, which is about 200 companies. So our entire addressable market in that company was 200 companies. Now that’s scary. You at all. When you when you saw that? Yeah, in the sense that we we charged a lot for our subscriptions, we charged from sort of $40,000 to $200,000. So it wasn’t like we knew that for each subscriber, we could capture lots of revenue. But yeah, it meant that with a finite universe, you thought about prospects is not if they’re going to buy but when they’re going to buy, right. So you knew the 200 companies you were going after? So it’s like, okay, over the next 10 years, we want to go after those 200 customers. It was not like, Oh, well, American Express said No, that’s too bad. I guess they’re not a prospect. It’s like Well, no, America said no today. So what are we going to do Morrow to reengage them Yeah, because the addressable market was so small.
Jeremy Weisz
Yeah, you know, you talk about this niching down, and there’s an exercise you have for a way to look at your business. I thought that was super valuable if you could share that, because someone may have like a bunch of different customers, they’re not sure who to zero in on. And you’re saying right now, the most valuable thing you could do figure out who your that ideal person is, and you have an exercise around, you know, how do you score things? And how do you look at it?
John Warrillow
Yeah, we take all of our customers that go through valuable to this exercise called the scalability trifecta, which is really designed to figure out which of your services today have the potential to become productized. And so what you do is you write down a whole list of your products and services on a piece of paper, and you score them on three criteria. Number one is how teachable they are to employees pilots building process, this is right in the sweet spot of process building. Number one, how teachable they are no employees number two, how valuable They are to customers. The opposite of valuable is commoditized. Number three, how repeatable they are. So what kind of repeatable, and I don’t mean repeatable delivery process, I mean, what kind of repurchase cadence they have. In other words, the opposite of repeatable is like a wedding ring business, right? You buy them once, or a funeral casket, whatever. What you get is something that is teachable to employees unique coming from you for your differentiator, it’s valuable. Number three, it has a repeatable, buying cadence, meaning customers need it on a regular basis, and you literally score all your services on these three criteria. Now, what you’re going to find, if you’re anything like most of our customers that go through this exercise, is that what’s teachable, competes with or as opposite to what is valuable, right? Those two things are opposite. Your most teachable things are also going to be the least valuable in the eyes of your customers that was valuable is like your time, which is the least teachable, right? And so those Two things compete naturally, when that happens, and I think it will, in almost every case, when it happens, what you’re going to do is identify something that’s teachable as your starting base that becomes your foundation, and find a way to add something to it to make it unique. So you’re going to start with what’s teachable, and then find something that takes it from a commoditized service into a differentiated one. I’ll give an example. So the H Backspace is very interesting business, lots of small businesses doing heating and air conditioning, right? Well, in that space, you’ve got the concierge service where every three months you show up and you change the customer’s furnace filter, right? You charge 20 bucks a month and this gives you kind of proprietary Subscribe for that.
Jeremy Weisz
We subscribe to that.
John Warrillow
Do you Okay, yeah, Chicago. We got in Toronto, very calm every
Jeremy Weisz
couple months. Exactly.
John Warrillow
Yeah, but here’s the problem while it’s teachable to teach likes I’m kicked out of school how to do the furnace filter. It’s also not very valuable in a market like Chicago where you are Jeremy, you got locked dozens of H back companies offering the same thing. So how do you make it unique? Well, what you could do is you can think about what what is the subset of customers that I want to serve and what are they specifically need? And what can I do? So for example, I happen to have a son who suffers from asthma. So for us, if an H vac company came in, in addition to changing the furnace filters, came in with an air quality measure that’s been endorsed by the American Lung Association that says, hey, we’ve done the levels of dust and pollutants in the air. And just to give you peace of mind, this quarter, you’re scoring in the green and all five of these categories. Boom, that’s a differentiated h fac service. Still a concierge service to the basic but I would how many more coming multiples of a traditional would I pay for that? As a father of someone who has asthma right many multiples So that’s what we mean. That’s a silly example. But you could differentiate a service by adding something to it. Yeah, so do the exercises called scalability Finder. But when you find what’s teachable and valuable competing with each other, start with teachable then add something new, something fresh, something different.
Jeremy Weisz
Yeah, no, I love that. And you get, you know, I’m wondering how you shift and business owners mindset like, like Debbie, who’s like, the most valuable thing is me going in and doing it shifting it to Well, how do I make this a? Was that a hard process for her to go through in her mind to go Okay, I need to create a software out of what’s in my head. It’s, it seems like you get pushed back on that a little bit. Because like, how can you know it’s also maybe an ego thing like no one else could do what I do, and how do I productize it or quantify it? How do you get them over that mindset shift that no, we can actually boil I mean You have a software yourself, right? Like what you created over decades, right? And your knowledge is going into software. But I don’t talk about how do you get people over that mindset shift like, okay, you’re special, but maybe not that special, we can make it into something that’s repeatable.
John Warrillow
Yeah. Yeah. Is it Tony Robbins? Who was the first one to talk about? You know, you either go away from pain or towards pleasure. So I know
Jeremy Weisz
he talks about it a lot like, Jay versus pleasure. Yeah,
John Warrillow
yeah. But I think that’s true. So I think that the customer has to feel some pain and the pain Debbie felt, and I think that pain I felt as well and the pain I think most owners reach at some point in their, in their career journey is it’s too painful to stay and it’s too painful to go meaning she got the word from an m&a professional that there’s nothing here for me to to sell. So here she is building a 20 employee company, her life’s work, and she’d have to leave it and get nothing right. So that’s it. painful. Equally, it was as painful for her to stay. Because she felt trapped in her business. She couldn’t grow up beyond 20 employees because there’s only so much of her time to go around. Right? So she’s trapped. And if there’s anything I know about entrepreneurs is we hate feeling confined, right? It’s like we’re it’s like the one thing that makes us entrepreneurs, right? Like, we don’t go to work for Procter and Gamble. We didn’t go to work for Ford. We don’t want to be a little widget in on the ladder that gets to that’s just not who that’s not the way we’re wired, right? We don’t like feeling confined and trapped. And so that feeling of being trapped in your business and he is a struggle. Now, what I also talk a little bit about is to really think about your goals as an entrepreneur because for most of us, when you say kind of what are your goals next year, what we hear is entrepreneurs chasing a top line revenue or sales number, or a bottom line profit number. Those are the two most common yardstick That owners are chasing. And what I encourage owners to think about what I would encourage anyone listening to this to think about is, is, instead of using those as your goals, I want you to think about your role as a parent. Right? We talked about this before we hit record, Jeremy that the idea of being a parent is like our most important job. And for many of us, you know, when we start, as parents, we do everything for our kids, right? We feed them, we change their diapers, like they don’t have a single decision to make, because we do it all for them, right. But over time, as they become teenagers and young adults, the goal that we have for them is that they can succeed on their own right, that we over time, give them enough exposure to actually get up on their own feet and succeed. And so what I ask entrepreneurs to think about is instead of chasing some profitability, number of revenue number, I want you to think about your business as a child and your goal is the founder is to Get that child to adulthood safely.
Jeremy Weisz
Right and not come live at home after college.
John Warrillow
Exactly. Freedom to fly, whatever, um, you know, get it to, to to succeed without you and process is a big part of that. Right. documenting your process is a huge part of that. But there’s no there’s more to it. But that’s a huge part of creating something that can succeed without Yeah,
Jeremy Weisz
yeah, it’s a metric. You know, you’re saying the metric isn’t necessarily top line or bottom line, but it’s a freedom. It’s like a freedom piece to be able to step away from the day to day.
John Warrillow
Yeah, you bet. I mean, again, if you want to be hard nosed about it, a company that can thrive without the owner is the most valuable company, and you could build a very large company. And if it’s deeply dependent on you, it’s not really worth very much, no matter how blue chip the clients are, how much profit you make. So again, Thinking about your business as a child you need to raise I think gets you there in the end gets you to be a valuable, you know, it increases your your overall financial picture if that’s what you’re chasing, but it does it in a more nuanced, I think faster way. Yeah.
Jeremy Weisz
I want to talk about, you know, some big mistakes people make. And I know in the book, one of the big mistakes that the person makes is telling the person who’s buying him that he’s just ready to get out of here and move on. So talk about that, but like any other big mistakes that you see people making, too, you know, after you know, obviously building up this company and for other companies, what are some big mistakes that you should tell people you know, listen, step over this big pothole.
John Warrillow
Yeah, yeah, don’t step in this one. And I’ve done 250 episodes, it builds on radio now. So I’ve heard lots more than my own personal
Jeremy Weisz
Yeah, yeah, sure. Any of those two
John Warrillow
Yeah. What One of the two, there’s two that come to mind. The first is a question that you’re going to get at some point in your entrepreneurial journey and particularly from acquirers and potential investors, they’re going to say, Hey, you know, Jeremy, like, but love the business you build, like, why do you want to sell? It seems like a really innocuous question, but the answer to it is really important. Because when an acquirer looks at your company, the last thing they want to know is that you’re stepping off a burning bridge, right? They want to know that but you’re really excited about the future, and that you need a strategic partner with deep strategic resources, financial resources, and other to help you achieve your goal. They’re gonna want to tie you in to some sort of earnout or some sort of process so that you stay on for a couple of years and and help them to monetize what they’ve acquired. And the last thing you want to do is stay say stuff like I’m just tired. I’m kind of done. Or I’ve got another idea I’m really excited about, both of which by the way might be true. But that’s not what the acquirer wants to hear, they want to know. So I mean, the coaching I would give you is is, and again, it depends a little bit on the age of the entrepreneur, I think if you’re 65, then for sure, you can say, Look, I’m getting the age where I need to think about sort of my retirement and my own personal balance sheet. So while I’ve got lots of excitement about the future, I also want to kind of clean up my own personal balance sheet and make sure I’m not too exposed. So, you know, I, I’d be interested in selling part of or, you know, whatever. So that’s how if I was 65, if I was 35. Um, you know, I want to say more like, we’ve got a huge vision. We want to be the next Google the next Tesla, the next Apple, whatever. But really, to achieve that, we need a partner. We need someone who’s got deep strategic resources. And so that’s what we’re looking for. Yeah, that’s gonna communicate that you’re that you’re willing to stick around and that you’ve got a big vision.
Jeremy Weisz
There’s an excitement there. Yeah. Like there’s excitement for the Future in both in both respects, not like, I’m just tired of 15 years of this,
John Warrillow
you know, shitty customers ask me for stuff all the time yet. No. Maybe true, but it’s not the right answer.
Jeremy Weisz
You know, thanks for sharing that because I think it’s a it was a big mistake that in people have to listen to the book or read the book build to sell to hear how you walk through it in the book. You know, the other part is sometimes people have to hear sales gone wrong, John or horror stories to really have it hit home. I’m wondering, you know, after the fact like during the due diligence process or after, what were some stories that you remember from either, you know, people you’ve interviewed, or other because I know you also have a lot of advisors, as well, which I’d like to have you talk about the advisor, portion, but some horror stories, when people enter into this process.
John Warrillow
Man, there’s so many it is unfortunately, a landmine, or a field full of landmines that you’ve got to really think about. I mean, I mean, a couple come to mind and a showed is someone I had on the radio about a month ago, wonderful entrepreneur, delightful woman. She’s based in San Francisco, she got divorced, and she moved to Portland in San Francisco. The fancy salad bar was a big deal. And so she thought in Portland, there was no fancy salad bars at the time. And so she started one called garden bar, and it was a success largely on her own sort of gumption and tenacity. She built it up to a successful business and a successful one location business. She gets approached by an acquirer who says, Look, I you know, I want I’ve seen what you’ve created here. I want to help you build this into a huge brand. And and I want to invest in your company. And so she is kind of hammered by this idea and taken Sort of thinks it’s great. And he puts together an investment port sort of term sheet that says that he’s going to get a to x liquidity preference on exit. And she doesn’t think much of it. But whatever she she goes ahead and assigns it. Well, in the space of about 18 months, she in fact, does build up garden bar to 10 locations across por la, only to attract an acquisition offer from the largest restaurant chain of its kind in Seattle, just up the road. She goes through the negotiation process about two days before closing, she turns to her lawyer and says, You do know that by doing this deal, you’re going to be left penniless. And she says Why? And she says, Yeah, you have a two x liquidity preference on this investment, meaning the entire amount you’re going to make from the sale this company is going to go to the investor not to you and and so Again, she picked herself up off the floor. But she’d been growing so fast that they were starting to bleed cash didn’t have a lot of options left. And so she agreed to go ahead and sell the company. In return for an urn out an urn out where you set you sign up for a set of goals in the future. And that you’re you make, you know, proceeds from your sale if you hit a set of goals. Well, that was in November 2019. And everybody knows what happened to restaurants in February 2023 months later, they all got shut down, right? Because COVID hit when she was left with nothing. Nothing from building one of the fastest growing chains in Seattle in Portland. It’s just a cautionary tale that liquidity preference to executed or any sort of liquidity preference that investors would ask for are dangerous and they can end up washing you out of any sort of equity. That’s one example. It’s a very kind of a technical example.
Jeremy Weisz
I want people not to fall asleep at night, John with these stories. That’s what I want. What’s another one like that that people should be weary of? And maybe, oh, lose sleep over? Sure.
John Warrillow
Another one comes to mind again Built to Sell radio guest maybe a year ago, Episode 150, something like that. You can just google Built to Sell and the name Rand Fishkin. I think you’ve had Rand on the show.
Jeremy Weisz
Uh huh. Yeah.
John Warrillow
Yeah. Just an amazing entrepreneur, wrote a company called Lost excuse me, wrote a book called Lost and founder, which is definitely worth picking up if you haven’t already. So Rand builds this company. Moz SEO, software tools builds up to about five and a half million in revenue growing quickly. gets a call from Mark Halligan, good Chicago based entrepreneur who owns HubSpot co owns HubSpot. co founded HubSpot. Halligan says Look, I want ran I want to buy your company. And I want to I want to buy it for $25 million cash and HubSpot stock rands, like oh my God, that’s a lot of money. But he goes back to some of his visors. You know what ran you’ve been growing This business really quickly you’re expecting to double again next year, fast growth SaaS company like yours would probably fetch four times revenue. That’s 40 million bucks on next year’s revenue. If you’re going to go from five to 10 I don’t think 25 is enough. You should turn it down and ran. Listening to his advisors. Okay. Yeah, I guess you know, I’m going to turn it down. So he told us he goes back to Halligan and says, Look, I’m not taking your 25. I think it’s worth 40. Halligan, in his case looks at this business is currently generating $5 million in revenue. This is like there’s no way and walks away. Ran, decides instead, to raise money raised a bunch of venture capital money has a liquidity preference. Ultimately, they diversify way outside of rands sweet spot and SEO tools to the tune that he gets a bit lost and the company starts to lose money. Each of the products he launches is less than successful than the last. The ultimately suffers a period of deep depression. He’s removed The CEO and the venture capitalist put in their own CEO. When I interviewed him on the show, I said Rand like, what’s your net worth now? And he said, believe it or not, my net worth is 800 grand. I have some shares in Moz, but because of the venture capitalist liquidity preference, I’m not sure they’re worth anything. And oh, by the way, I’m about to spend most of that 800 grand on elder care for my grandparents who are in need of care. I said to Rand out of inches. What would that offer from HubSpot look like today and he said, based on the appreciation of HubSpot stock, it would be worth more than 100 million dollars. Now, if that doesn’t keep you up at night, yeah, I don’t know what would it’s a great book. If you haven’t read it is good. It’s great. I’d certainly worth a read.
Jeremy Weisz
And that’s what I remember not just the sale but the the stock just because of HubSpot. was worth a lot of money. Um, yeah, thanks for thanks for sharing that I want to talk about, you know, on the site there is a maybe just we’ll choose one there’s if they go anyone goes to a valuebuildersystem.com, you know you can improve your valuable go score with the value Value Builder System™ and there’s 12 modules there. Um, and I wonder if we may like grab out one of them that you think would be good to talk about, you know, if you want to know about the Envelope Test, sorry, you’re gonna have to just gonna have to buy built a cell and like, listen to it, you’re not going to get that one. But um, because I love that part of the book to where the Envelope Test so yeah, you’ll just have to get the book for that for most of us, but, um, which one you think would be most valuable to kind of pull out I know you’ve talked about the hub and spoke is really important there. I don’t know if that’s the one you want to just just highlight for a second.
John Warrillow
We’ve already done a little bit of Hammad spoke. It’s just this notion that you need to build a business that’s not dependent on you personally. And so, you know, think of it as a child you want to raise another one that that maybe is a little less obvious that that could be potentially more interesting about building value is the Switzerland Structure so it’s it’s the name of Switzerland structure is inspired by the country of Switzerland, which is, you know, is is kind of the punch line on a lot of jokes because they’re so focused on Independence right there. You know, I want to be Switzerland, meaning I don’t want to pick sides, right? So they didn’t join either the two world wars, they don’t use the euro. They didn’t. This is blows my mind every time I think about it. They didn’t even join the United Nations until they had a country wide referendum as to whether to join like, who doesn’t join the United Nations is the most, you know, like every country practically is in the UN, but they had a country wide referendum to decide whether to join because it meant that they were joining up with something so it’s inspires this idea of creating a business is not dependent on Anything that would compromise its independence. So that would be anyone, customer, employee, or supplier. So you’re looking to build a business that where a customer, no one customer exceeds any more than 15, one 5% of your revenue. No employee is to you’re replaceable. And no supplier, interestingly is also to irreplaceable. And when you’ve got that you’ve got a very, very solid foundation of a business. Yeah,
Jeremy Weisz
thanks for sharing that I forgot who originated the statement, but I’ve heard of many times the most dangerous number in business is one and this is just kind of expanding on as like, if a large chunk of whatever employee you know, customer, you are in trouble at some point, you know,
John Warrillow
yeah, yeah. Yeah. It’s it’s another reason to lace a couple of these ideas together. It’s another reason to go through the scalability try factor and it’s another reason to focus on niching down because here’s what I’ve experienced. Maybe Jeremy, you’ve you’ve had some of the same challenges. As well as customers, when you deliver for them, when you really nail a project, they start asking for repeat projects, right? They say, Wow, Jerry really gets he’s awesome. He really understands me, I’m gonna ask him to do a second project and the third project. The only problem is that each time you really nail it for a customer, they can often start to widen the things that they want from you totally to the point that you’re doing all sorts of stuff you never imagine offering you never imagined selling. But it’s like the customer wants it. So I should be supplying it right. And you build this business that’s maybe growing in revenue, but becoming deeper and deeper, really more dependent on both one customer and you personally did deliver for them. And so you, you reach a point where you’ve got a profitable growing company that’s worthless. And so the antidote to that, again, is to is to think about what are you uniquely positioned to do? What can you teach employees to offer what makes you valuable in offering it and stick to your knitting? Even though customers will ask you for ancillary services, say, you know what our billion nail this one product is because we can focus on it. And as soon as we take our eye off that we’re going to start disappointing you.
Jeremy Weisz
Yep, yep, totally in like the focus. And this one’s hard to say no, but the focus and discipline is key. I know. We have a few more minutes. And I wanted to touch on two things. John is one, the software and talk about the software. And the second is the adviser piece, which I don’t know if everyone knows how that works as well, because that is, you know, people helping deliver the message in the strategy and everything like that. So maybe talk about the software and the advisor piece.
John Warrillow
Yeah, you mentioned out of the gate that I’ve helped 55,000 business owners, that’s a little generous. I personally haven’t done that. The software,
Jeremy Weisz
you’re busy man,
John Warrillow
we have 55,000 users of the software, whom our business owners going through the 12 modules I’ve described today to help them improve the value of their company. So that’s the software and we’re mindful that what we do is highly, highly personal, right? The decision to sell, build value, one day potentially exit your company is just a deeply personal process. And so our go to market strategy is to partner with advisors, whom business owners already trust, right? They already trust them with their most, you know, deepest darkest secrets that we empower those advisors to offer the Value Builder System™. So we licensed the system to advisors, of which we have about 1000 around the world who use it as their platform for value building. So our business model is to license it to the advisors and advisors in turn, use it as their platform for value building advice that they offer business owners,
Jeremy Weisz
so people could check out the if a business owner wants to check out and actually take the salability score. Can they go to valuebuildersystem.com slash score two began with an advisor.
John Warrillow
Yeah, I know you can go to Value Builder System™, you can actually just go to Value Builder, it’s a, it’s a shortcut valuebuilder.com and you can get your score that will enable that will trigger prices where you’ll get your score of 100 average score is 59. Those businesses on average are getting offers of 3.5 times pre tax profit. If you are able to get your score all the way up to 90 out of a possible 100. those businesses on average are getting 7.1 times pre tax profit within double. So you just got a sense of the range there, but you can first the first step is to get your score. If you want, you’ll then be prompted, do you want an advisor to help you interpret and grow your score? You can select Yes, in which case we’ll put you in touch with one of our certified value builders in your local area.
Jeremy Weisz
And if someone John is a coach, and they’re interested in that advisor piece, where should they go to check out more
John Warrillow
on that same place valuebuilder.com and there’s a tab for advisors and they can check it out.
Jeremy Weisz
Okay, John, always a pleasure people, you know, to check out Built to Sell, Automatic Customer. And I think you will have another book coming out in some point in the future too. So just search John Warrillow on Amazon and Audible and just buy all of them. You know, let’s just make it easy. All right. So
John Warrillow
you’re very kid Jeremy. Yeah, it’s been it’s been a real pleasure.
Jeremy Weisz
Yeah. Thank you, everyone. Check it out.
