Artwork for podcast Hourly to Exit
E42: How to Scale Your Business to Exit Bigger and Faster with Greg Alexander
Episode 422nd May 2023 • Hourly to Exit • Erin Austin
00:00:00 00:22:25

Share Episode

Shownotes

If you are a business owner, do you fall into one of these categories: a) Earning too little; b) working too much; or c) struggling to exit? Yes? Greg Alexander is your guy.

He is the founder of Collective 54, a company and a community that  creates a great impact on brilliant founders who may need a piece of advice. Greg is not just doing the talking. He actually proved his expertise and knowledge on exiting a business big time when he sold his first company for $162 million.

In this episode, you’ll get to know how he was able to sell it for such great value as we discuss the following:

  • The key difference between earning income and building wealth
  • How intellectual capital can greatly increase your business’ value
  • Three types of clients he’s providing services for
  • How to make your business less founder-dependent

Still want to know more? Listen to the full episode to be in the know of the ins and outs of scaling your business.

Other Resources Mentioned:

More About Our Guest:

Greg Alexander is the founder of Collective 54, the first mastermind community dedicated exclusively to thriving professional services firms with big aspirations. Collective 54 helps members make more money, work less, and get to an exit bigger and faster. Members get access to a network of peers, proprietary content and benchmarking data, coaching, events, and software, all custom-built to serve the unique needs of boutique professional services firms. 

Connect with Greg Alexander:

Connect with Erin and find the resources mentioned in this episode at hourlytoexit.com/podcast.

Erin's LinkedIn Page: https://www.linkedin.com/in/erinaustin/

Think Beyond IP YouTube Page: https://www.youtube.com/channel/UCVztXnDYnZ83oIb-EGX9IGA/videos

Music credit: Yes She Can by Tiny Music

A Team Dklutr production

Transcripts

Speaker:

Hello, ladies.

Speaker:

Welcome to the Hourly to

Speaker:

Exit podcast.

Speaker:

I am very excited about today's guest,

Speaker:

Greg Alexander, who I've been a big fan

Speaker:

of since I first heard him on the

Speaker:

Vito Sell Radio with John Warlow talking

Speaker:

about his exit.

Speaker:

So welcome Greg.

Speaker:

I'm very thrilled to have

Speaker:

you here.

Speaker:

Well, it's a pleasure to be

Speaker:

here and thanks for having me.

Speaker:

Yeah.

Speaker:

Will you introduce yourself to the

Speaker:

audience please?

Speaker:

Sure.

Speaker:

My name is Greg Alexander.

Speaker:

I am the founder of Collective 54.

Speaker:

Collective 54 is a mastermind

Speaker:

community dedicated to boutique

Speaker:

professional services firms.

Speaker:

And, we got about, I think it's

Speaker:

300 members now.

Speaker:

And what we really help them with is

Speaker:

how to grow scale and someday exit

Speaker:

their services firm, which I

Speaker:

know, you are very passionate about.

Speaker:

Yes.

Speaker:

And completing the entrepreneurial

Speaker:

journey in services is a very

Speaker:

nuanced thing.

Speaker:

So that's what we're focused about

Speaker:

and it's, it's wonderful to speak

Speaker:

to y'all today.

Speaker:

Wonderful.

Speaker:

So there is a story behind the name

Speaker:

Collective 50.

Speaker:

Yeah, so the story is, so

Speaker:

the number five, four is the North

Speaker:

American industry classification code

Speaker:

for professional services.

Speaker:

Mm-hmm.

Speaker:

So within that, that is lawyers,

Speaker:

accountants, consultants,

Speaker:

marketing agencies, IT service

Speaker:

providers, pretty much anyone who is

Speaker:

marketing, selling, and delivering

Speaker:

their expertise.

Speaker:

And, it's the second biggest

Speaker:

sector in the US economy, trailing

Speaker:

only oil and gas.

Speaker:

It's about, 2 trillion per year

Speaker:

spent in this sector with a 5% organic

Speaker:

growth rate, employs 10 million people.

Speaker:

so we're very lucky to be in

Speaker:

that sector.

Speaker:

And that's the reason for the

Speaker:

name, or I should say the 54.

Speaker:

The reason for the collective

Speaker:

is because that's what we are,

Speaker:

we're a community or collective

Speaker:

of business.

Speaker:

That

Speaker:

is fantastic.

Speaker:

I did not realize that that sector was

Speaker:

so large, and maybe it explains why I

Speaker:

sometimes struggle, frankly, to define

Speaker:

who I'm talking to because it is such a

Speaker:

large group and very diverse group within

Speaker:

that expertise based business group.

Speaker:

So yeah, I find myself sometimes

Speaker:

talking to the soloists and

Speaker:

sometimes talking to the c e o

Speaker:

and, That's back and forth, but a

Speaker:

lot of the same issues among

Speaker:

them.

Speaker:

yeah.

Speaker:

it's big.

Speaker:

So therefore it's, hard to define,

Speaker:

you know, and I have that problem

Speaker:

sometimes as well.

Speaker:

I mean, I might speak to somebody

Speaker:

who's running a marketing agency and

Speaker:

they'll say, what do I have in common

Speaker:

with a law firm?

Speaker:

And I'll say A lot more than, you know.

Speaker:

Mm-hmm.

Speaker:

Like, you're in the service business,

Speaker:

you're in the people business.

Speaker:

you're marketing your expertise.

Speaker:

the business model is the same.

Speaker:

Yes.

Speaker:

The domain is different.

Speaker:

Mm-hmm.

Speaker:

But the business model is the same.

Speaker:

Yeah.

Speaker:

So you're collective if, a mastermind,

Speaker:

like how are you different from

Speaker:

other masterminds?

Speaker:

We're different really in

Speaker:

three ways.

Speaker:

So first is the obvious way.

Speaker:

We're only focused on a

Speaker:

single industry.

Speaker:

Mm-hmm.

Speaker:

most mastermind communities, and I'm

Speaker:

a member of some, I'm a member of Y

Speaker:

P O Tiger 21, and they're wonderful

Speaker:

organizations, but they're not focused

Speaker:

on one industry.

Speaker:

They have literally dozens of industries

Speaker:

and our contention is, Industry

Speaker:

context matters.

Speaker:

So that's the first thing.

Speaker:

The second thing is we're focused on

Speaker:

the segment Within that industry.

Speaker:

We refer to it as the boutique, and we

Speaker:

define that based on number of employees.

Speaker:

So you have to have more than 10, but

Speaker:

fewer than 250.

Speaker:

these are kind of post startup,

Speaker:

but pre-ex exit, the analogy

Speaker:

I use is that they're in their

Speaker:

kind of awkward teenage years.

Speaker:

they're not a kid anymore, but they're

Speaker:

not an adult.

Speaker:

So we're really focused on that.

Speaker:

And then the third thing is we're

Speaker:

laser focused on the founder

Speaker:

or co-founder.

Speaker:

Because a lot of what we do with

Speaker:

our programming is around building

Speaker:

wealth as opposed to generating

Speaker:

an income.

Speaker:

So I would say those are the three,

Speaker:

primary differences.

Speaker:

However, I do encourage everybody

Speaker:

to be in as many communities

Speaker:

as possible.

Speaker:

The limitation there, of course,

Speaker:

is how much time do you have to dedicate

Speaker:

to these things?

Speaker:

But I'm a big believer that

Speaker:

learning from.

Speaker:

Is the best way to learn.

Speaker:

Yeah.

Speaker:

Yeah.

Speaker:

You mentioned the difference

Speaker:

between earning income and building

Speaker:

wealth, which is sometimes hard

Speaker:

for people to wrap their head around.

Speaker:

Can you explain to the audience, like

Speaker:

how you like to look at the difference

Speaker:

between the two?

Speaker:

Sure.

Speaker:

So I mean, in the context

Speaker:

of a services firm, how do you

Speaker:

earn an income?

Speaker:

Well, you run a profitable business,

Speaker:

which means you can charge enough

Speaker:

for your service.

Speaker:

And the cost to deliver the service

Speaker:

can be maintained or reduced over

Speaker:

time and you earn that spread.

Speaker:

And that's the business model

Speaker:

of services.

Speaker:

However, not all revenue is the same.

Speaker:

So the mental model shift is to

Speaker:

get off the income statement and start

Speaker:

thinking about the balance sheet.

Speaker:

And that's where wealth

Speaker:

is determined.

Speaker:

You know, assets minus liabilities.

Speaker:

And say to yourself, if somebody was

Speaker:

to try to buy my firm, how would

Speaker:

they place a value?

Speaker:

For example, if you are running

Speaker:

your firm and you basically are the

Speaker:

firm as the founder, there's no wealth

Speaker:

to be created there because God forbid

Speaker:

something happened to you, the business

Speaker:

would go away.

Speaker:

However, if you built a real robust

Speaker:

team, so much so that you as the

Speaker:

founder, no longer sell work and no

Speaker:

longer deliver work, the team does it.

Speaker:

Then there's real wealth to

Speaker:

be created there.

Speaker:

In addition, you got to generate revenue

Speaker:

from sources other than the billable.

Speaker:

hour and you talk an awful lot about

Speaker:

this, and I'm so pleased to meet you

Speaker:

because we share that in common.

Speaker:

these are assets of various kinds.

Speaker:

sometimes they're protected assets

Speaker:

and intellectual property, and

Speaker:

you can generate royalties or

Speaker:

licensing fees off of that, and that's

Speaker:

a wonderful thing.

Speaker:

Sometimes it's intellectual

Speaker:

capital that might not be protected.

Speaker:

However, you can monetize by charging

Speaker:

a premium for your service because of

Speaker:

some methodology or tool that comes

Speaker:

along with the pair of hands.

Speaker:

So those are the ways that wealth

Speaker:

is created within the professional

Speaker:

services segment.

Speaker:

Yeah, you know, I'd like to say that

Speaker:

I'm my own avatar that I have been,

Speaker:

a soloist since 2006, I believe.

Speaker:

And so someone asked me like, how

Speaker:

long you've been in business, and I have

Speaker:

to say, well, I've been on my own since

Speaker:

2006, but I've been selling my time.

Speaker:

I was selling my time for a good,

Speaker:

10 years, without really thinking

Speaker:

about, building a business.

Speaker:

So I like to say I've been in

Speaker:

business for three years, although

Speaker:

I've been on my own since 2006 cuz

Speaker:

I really was just selling my time and

Speaker:

earning an income, not creating.

Speaker:

Any assets and so to the point of

Speaker:

creating assets and intellectual

Speaker:

property.

Speaker:

so when people are.

Speaker:

Providing their services, they have

Speaker:

their expertise.

Speaker:

They are used to going out to

Speaker:

get clients and fulfilling whatever

Speaker:

the needs are for their clients.

Speaker:

how do they make that shift to, okay,

Speaker:

I'm going to start, thinking about,

Speaker:

creating either methodologies around

Speaker:

that or creating materials that are

Speaker:

protected materials around that.

Speaker:

cuz people get caught up with

Speaker:

things like software and courses and

Speaker:

books, you know, the big shiny.

Speaker:

Intellectual property pieces,

Speaker:

but there's so much more than that

Speaker:

that helps create a well-run business.

Speaker:

Yeah.

Speaker:

Well, you know, I'll share a little bit

Speaker:

about my story prior to Collective 54,

Speaker:

because it might be a good illustration

Speaker:

of that point that you just made.

Speaker:

So I started a firm, a management

Speaker:

consulting firm in 2006, and it

Speaker:

was called Sales Benchmark Index

Speaker:

or SBI for short.

Speaker:

And I sold that business in 2017,

Speaker:

and it was one of the larger exits.

Speaker:

We sold it for 162 million.

Speaker:

And the important thing to keep

Speaker:

in mind there is we only had

Speaker:

30 employees.

Speaker:

So how do you sell a consulting firm

Speaker:

with 30 people for 162 million?

Speaker:

It's because we had these assets.

Speaker:

Mm-hmm.

Speaker:

And the primary asset was what we

Speaker:

called the revenue growth methodology.

Speaker:

And it wasn't a software tool.

Speaker:

it wasn't a training course.

Speaker:

It was a consulting methodology.

Speaker:

And it was used by our clients,

Speaker:

which were largely software companies

Speaker:

that had very large sales.

Speaker:

And even a modest improvement in the

Speaker:

productivity or effectiveness of

Speaker:

10,000 salespeople could have a really

Speaker:

large impact on their share price

Speaker:

and their own profitability.

Speaker:

And it was the methodology that

Speaker:

they wanted.

Speaker:

Now.

Speaker:

Yes.

Speaker:

with the methodology came people and we

Speaker:

helped them get it implemented in their

Speaker:

shop, but it was a methodology and

Speaker:

what that allowed us to do is to do

Speaker:

standardized work.

Speaker:

So instead of going from shop

Speaker:

to shop and every project is a custom

Speaker:

project, that's a non-scalable

Speaker:

business.

Speaker:

Mm-hmm.

Speaker:

And when we went from shop to

Speaker:

shop and we were starting with

Speaker:

this methodology and then it was

Speaker:

just a question of customizing it,

Speaker:

maybe 20, 25% for that particular

Speaker:

client situation that allowed for

Speaker:

scalable work and how that shows up

Speaker:

in the financials and therefore it

Speaker:

creates wealth, is that when you have

Speaker:

standardized work, you can hire really

Speaker:

bright people maybe with not a ton of

Speaker:

experience, but a lot of potential

Speaker:

and teach them how to deliver

Speaker:

for the client.

Speaker:

So in that case, you're selling to

Speaker:

the client something that's very, very

Speaker:

valuable, but you can deliver that

Speaker:

service with maybe less experienced

Speaker:

people and therefore a less cost.

Speaker:

The best example that I've seen of

Speaker:

this, and maybe this could be inspiration

Speaker:

for your audience, is Goldman Sachs.

Speaker:

Everybody knows Goldman Sachs.

Speaker:

Mm-hmm.

Speaker:

They're one of the largest professional

Speaker:

services firms in the world.

Speaker:

And they have 40,000 employees, but

Speaker:

only 400 partners.

Speaker:

So there's 400 people keeping

Speaker:

40,000 people busy.

Speaker:

Now how can you do that?

Speaker:

And 73% of their employee base are

Speaker:

in their twenties.

Speaker:

Wow.

Speaker:

And people hear that and they say,

Speaker:

are you kidding me?

Speaker:

Like, Goldman Sachs is in every

Speaker:

boardroom, in every company

Speaker:

in the world.

Speaker:

And you would think, cuz.

Speaker:

So sometimes I hear from people,

Speaker:

well, I can't hire junior inexpensive.

Speaker:

Because the clients won't tolerate that.

Speaker:

Well, that's not true.

Speaker:

If you have intellectual

Speaker:

property or your intellectual

Speaker:

capital, they're not just buying

Speaker:

the pair of hands, they're buying all

Speaker:

the expertise that comes with that

Speaker:

pair of hands.

Speaker:

So it's, these models are

Speaker:

out there.

Speaker:

Goldman Sachs is one of many, and,

Speaker:

that's what we all the smaller

Speaker:

firms, all of us on this call, we

Speaker:

should be shooting to replicate.

Speaker:

Yeah.

Speaker:

I like to say like instead of

Speaker:

being an expert based business,

Speaker:

be an expertise based business.

Speaker:

Yeah, you're an extra based business

Speaker:

then it's just, you and another, an

Speaker:

expensive expert If you get more experts

Speaker:

or you can have that expertise that can

Speaker:

be, utilized and delivered by less

Speaker:

expensive resources.

Speaker:

So, yeah.

Speaker:

I love that.

Speaker:

So I love this what you have on

Speaker:

your website, stop running Shin first

Speaker:

into these, three common problems.

Speaker:

Earning too little, working too

Speaker:

much, struggling.

Speaker:

The exit.

Speaker:

I love the imagery of running

Speaker:

Shin first.

Speaker:

Cause we've all had the pain of, Running

Speaker:

into something with our shins.

Speaker:

when people come to Collective 54,

Speaker:

are they struggling with something

Speaker:

or are they just looking for

Speaker:

community or both?

Speaker:

why do they.

Speaker:

It's a great question, and I

Speaker:

would say that there's three types

Speaker:

of people that come to Collective

Speaker:

54 to answer this succinctly.

Speaker:

So, and I would classify these

Speaker:

kind of as three problems that

Speaker:

they're focused on.

Speaker:

So the first group is that group

Speaker:

that's not making enough money.

Speaker:

these tend to be smaller firms, maybe

Speaker:

younger firms, and.

Speaker:

What happens to them is they get to

Speaker:

the point when they launch their firms.

Speaker:

What they say to themselves is, my

Speaker:

ambition is this.

Speaker:

I want to be able to make a living

Speaker:

and work for myself and not have to work

Speaker:

for a corporation.

Speaker:

And then they have the courage and they

Speaker:

start their firms.

Speaker:

They have a lot of respect for

Speaker:

'em, and they get to that point.

Speaker:

But then maybe two or three, four years

Speaker:

into the journey, they say, okay,

Speaker:

well my ambition has expanded.

Speaker:

That's no longer enough and I want to

Speaker:

earn an exceptional.

Speaker:

And then they struggle with, how

Speaker:

to go from just, billing out their

Speaker:

time or maybe billing out the

Speaker:

time of a couple of other people and

Speaker:

growing enough to, have a substantial

Speaker:

income coming in.

Speaker:

So that's one group that comes

Speaker:

in and we have a whole programming

Speaker:

set associated with that, cuz

Speaker:

our membership is tiered across

Speaker:

these three tiers.

Speaker:

The second use case, Somebody

Speaker:

enters collective and they're

Speaker:

past that point.

Speaker:

They're making a great living, but

Speaker:

they're working 70 hours a week and

Speaker:

they're killing themselves.

Speaker:

And their approach is largely brute

Speaker:

force at that point.

Speaker:

And they say, listen, I gotta get

Speaker:

some scalability into this business.

Speaker:

I've gotta get some repeatability.

Speaker:

how do I do this?

Speaker:

So we call that the working less group

Speaker:

or the scale group to be funny with it.

Speaker:

And we got a whole set of

Speaker:

programming on that.

Speaker:

And And then the third group are

Speaker:

folks that wanna sell their business.

Speaker:

And usually they've tried to sell

Speaker:

it and they were unable to because

Speaker:

maybe they have an unsellable business

Speaker:

or they were able to sell it, but the

Speaker:

purchase price of the terms weren't

Speaker:

attractive to them.

Speaker:

And they know what their issues

Speaker:

are and they have to fix them.

Speaker:

And they come to us and we try to help

Speaker:

them kind of knock those warts off, so

Speaker:

to speak, so they can go back out

Speaker:

into the market and get a great exit.

Speaker:

those are the three reasons why

Speaker:

people come to.

Speaker:

Okay.

Speaker:

Very nice.

Speaker:

And so those who are struggling to

Speaker:

exit, do you kind of like a pre-ex

Speaker:

exit planning type?

Speaker:

Or how do you work with

Speaker:

Yeah, yeah.

Speaker:

So maybe I should have started

Speaker:

with this.

Speaker:

our point of view is that the life

Speaker:

cycle from launch to exit for a

Speaker:

boutique pro serv firm is 15 years.

Speaker:

This three stages grow, scale,

Speaker:

exit, and there's about five years

Speaker:

in each stage.

Speaker:

So why does it take five years

Speaker:

to exit your firm?

Speaker:

Well, it doesn't, once your firm's

Speaker:

ready to sell, that might take a year.

Speaker:

But leading up to that, it's quite

Speaker:

a bit of work.

Speaker:

For example, a lot of these small

Speaker:

firms have a lot of client and revenue

Speaker:

concentration.

Speaker:

maybe their top five clients are

Speaker:

half their book of business, that's

Speaker:

an unsellable business, right?

Speaker:

So it's gonna take some time

Speaker:

to diversify your revenue stream,

Speaker:

or some of these business are

Speaker:

founder-dependent.

Speaker:

And yes, they can sell their firm, but

Speaker:

the person that's buying 'em says, you

Speaker:

gotta stick around after the sale.

Speaker:

Well then what's the point?

Speaker:

So then we help them develop a

Speaker:

succession plan and replace themselves

Speaker:

over time.

Speaker:

Well, you don't just flick the

Speaker:

switch on that.

Speaker:

Right.

Speaker:

Replacing a founder is a really hard

Speaker:

thing to do because these founders are

Speaker:

brilliant people.

Speaker:

So ready for the exit is a big piece

Speaker:

of what we focus on.

Speaker:

The actual exit itself, there's

Speaker:

investment bankers and m and

Speaker:

a advisors, and they're really

Speaker:

good at that.

Speaker:

And that's not our area of e.

Speaker:

Got it.

Speaker:

All right, so going back to the

Speaker:

diversifying their revenue stream by

Speaker:

that, if they have too much client

Speaker:

concentration, by that, do you

Speaker:

mean getting more clients with the

Speaker:

same business model or diversifying the

Speaker:

way that they serve

Speaker:

clients?

Speaker:

Well, the inflection point is usually

Speaker:

this, you get to a point where word of

Speaker:

mouth and referrals is no longer

Speaker:

sufficient, and you have to get good.

Speaker:

Selling to people who don't know you.

Speaker:

Mm-hmm.

Speaker:

Which usually means expanding outside

Speaker:

of your own little circle of influence.

Speaker:

And because up to this point

Speaker:

the founder hasn't done that.

Speaker:

There's a lot of concentration

Speaker:

because it's concentrated in

Speaker:

that founder's kind of personal

Speaker:

network or their, personal reach.

Speaker:

So this requires building a

Speaker:

commercial sales and marketing engine.

Speaker:

That can do this on a regular basis,

Speaker:

like a real funnel.

Speaker:

Mm-hmm.

Speaker:

Other people in the firm, can bring in

Speaker:

work other than the founder and really

Speaker:

expanding out.

Speaker:

So it's a wonderful thing to have

Speaker:

longstanding client relationships with,

Speaker:

high quality fees.

Speaker:

But if three or four clients are

Speaker:

the whole show, one of two bad things

Speaker:

happens and you're in real trouble.

Speaker:

So you gotta, develop that next

Speaker:

set of clients.

Speaker:

Mm-hmm.

Speaker:

So that's how you diversify it.

Speaker:

Gotcha.

Speaker:

And the other thing I think certainly

Speaker:

that solos will come up against is

Speaker:

when you're fully.

Speaker:

occupy, like you can't do another

Speaker:

hour of work.

Speaker:

Like why would you do any business

Speaker:

development?

Speaker:

Like how do you even do that?

Speaker:

And then you lose that client, then

Speaker:

you're starting from scratch, to fill

Speaker:

that slot again.

Speaker:

And I think that is one of the main,

Speaker:

pain point for a lot of people.

Speaker:

So that's a tough one.

Speaker:

something that you might enjoy

Speaker:

and maybe your listeners, is that

Speaker:

we have a tool on our website, which

Speaker:

is collective54.com, and it's called

Speaker:

the Firm Estimator.

Speaker:

And it's a 10 question estimator

Speaker:

and you can ask the questions

Speaker:

and it tells you an estimate of

Speaker:

what your firm might be worth.

Speaker:

What made me think about that tool is

Speaker:

something that you just brought up

Speaker:

because two of the 10 questions have to

Speaker:

do with that issue.

Speaker:

One question is, do you as the

Speaker:

founder of sell work, To answer that

Speaker:

question is yes.

Speaker:

Then your evaluation goes down.

Speaker:

The second question is you as the

Speaker:

founder, you delivering work.

Speaker:

The answer that question is yes,

Speaker:

your evaluation goes down.

Speaker:

Now why is that?

Speaker:

Well, you should have grown your firm

Speaker:

to the point where you personally are

Speaker:

not constrained.

Speaker:

By what you just mentioned, I

Speaker:

just literally can't take on any

Speaker:

more capacity.

Speaker:

You know, you've built a system

Speaker:

underneath you that you can

Speaker:

bring in more and more work and it

Speaker:

can be serviced.

Speaker:

Mm-hmm.

Speaker:

Because you have this proper capacity

Speaker:

planning process, so you might play

Speaker:

around with that tool a little bit.

Speaker:

it's a fun tool to use.

Speaker:

It takes 10 minutes and gets you

Speaker:

thinking about those types of issues.

Speaker:

Yeah.

Speaker:

I think what you've described is.

Speaker:

Is commonly referred to as, being the c e

Speaker:

o by working on your business and what,

Speaker:

instead of working in your business

Speaker:

and getting there.

Speaker:

that's great.

Speaker:

Thank you for that.

Speaker:

So what are you seeing in 2023

Speaker:

and beyond, like as we come out of

Speaker:

the pandemic and, maybe people who

Speaker:

were, just kind of making it as well

Speaker:

as they can and now they're looking

Speaker:

to grow, what was happening out?

Speaker:

Yeah.

Speaker:

So, I have this wonderful study

Speaker:

group called Collective 54,

Speaker:

and I can tell you our members

Speaker:

are thriving.

Speaker:

they're doing extremely well.

Speaker:

we do a, quarterly benchmarking

Speaker:

survey and we collect financial,

Speaker:

operational and human

Speaker:

capital metrics.

Speaker:

And I can tell you that our members

Speaker:

are growing on average, about 25%,

Speaker:

year over year.

Speaker:

And when you double click on

Speaker:

that and you say what's driving

Speaker:

it, when economic conditions sour,

Speaker:

it's really good for professional

Speaker:

services firms, which is

Speaker:

counterintuitive, but here's why.

Speaker:

Large corporations start laying

Speaker:

people off.

Speaker:

However, the work still needs

Speaker:

to get done.

Speaker:

10,000 people leave a company, all

Speaker:

that work's gotta land somewhere.

Speaker:

So what they say to themselves is, okay,

Speaker:

I'm gonna rent it instead of owning

Speaker:

it, and they turn to professional

Speaker:

services.

Speaker:

To kind of have that variable

Speaker:

workforce, and we're seeing that happen

Speaker:

a lot right now.

Speaker:

So a lot of our members are catching

Speaker:

that work and they're thriving.

Speaker:

They do have a different problem.

Speaker:

The problem is finding enough

Speaker:

talented employees to be able to

Speaker:

do the work on a consistent basis.

Speaker:

Unemployment's still in the threes.

Speaker:

Mm-hmm.

Speaker:

the labor market's really tight

Speaker:

right now, but that's a good

Speaker:

problem to have.

Speaker:

I'd rather be supply constrained.

Speaker:

Demand constraint.

Speaker:

Right.

Speaker:

That's excellent.

Speaker:

So unlike most of my clients,

Speaker:

you are someone who's already been

Speaker:

through an exit.

Speaker:

So usually I ask if they have a

Speaker:

plan to exit their business someday.

Speaker:

but you have a new business

Speaker:

collective 54.

Speaker:

What is your long-term plan

Speaker:

for Collective 54?

Speaker:

Yeah, so I'm very blessed that I sold

Speaker:

my company and I was 47 years old.

Speaker:

and I sold it for more money than I

Speaker:

could ever imagine.

Speaker:

So my motive is no longer financial.

Speaker:

I read a very impactful book that

Speaker:

was given to me by a mentor called

Speaker:

Halftime, how to Move From Success

Speaker:

to Significance.

Speaker:

And what I learned by reading that book

Speaker:

is that the second half of my life,

Speaker:

I'm now 52 years old, I get more

Speaker:

fulfillment out of making an impact

Speaker:

on others than I do putting more zeros

Speaker:

in the bank account.

Speaker:

So I don't plan on selling

Speaker:

collective 54.

Speaker:

Mm-hmm.

Speaker:

Now, I may live to regret that

Speaker:

statement down the road cuz some

Speaker:

of my employees might want to sell

Speaker:

down the road.

Speaker:

But right now, we're only

Speaker:

three years old.

Speaker:

we launched in January of 2020

Speaker:

I, I get so.

Speaker:

Fulfillment out of being in the

Speaker:

community and working with

Speaker:

entrepreneurs.

Speaker:

So my plan is we, we want to try to

Speaker:

get to 5,000 members and we're at 300

Speaker:

right now, so we got a long way to go.

Speaker:

But, that would be a wonderful

Speaker:

thing to accomplish because, I get

Speaker:

to meet all these fascinating, brave,

Speaker:

courageous founders that are trying to

Speaker:

change their lives and I, coaching

Speaker:

them and helping them, even in a

Speaker:

small way is very,

Speaker:

That's wonderful.

Speaker:

I love to hear that.

Speaker:

part of the mission with Hourly to Exit

Speaker:

is to help people, create that wealth

Speaker:

so that they have a legacy so that

Speaker:

they can do have another half another

Speaker:

chapter that is more impactful and

Speaker:

more meaningful.

Speaker:

one thing I would say to you, Aaron,

Speaker:

is I know you're passionate about

Speaker:

helping women and something

Speaker:

that happened by accident, but

Speaker:

I'm very proud of is that 41%

Speaker:

of our membership is female.

Speaker:

Oh, that's wonderful.

Speaker:

I know.

Speaker:

And, it wasn't intentional.

Speaker:

Mm-hmm.

Speaker:

It just happened.

Speaker:

And there's certain, industry segments

Speaker:

that are dominated by females.

Speaker:

For example, marketing agencies.

Speaker:

there's some brilliant

Speaker:

female leaders, entrepreneurs that

Speaker:

are running these marketing agencies.

Speaker:

I've learned a ton from them.

Speaker:

HR consulting is also another great

Speaker:

field where a lot of, females are in.

Speaker:

I think it's great.

Speaker:

I think, this field of professional

Speaker:

services might not have some of

Speaker:

the barriers that other fields do it.

Speaker:

It still has some for sure, and I'm

Speaker:

aware of that, but it's a little

Speaker:

bit less of an old boys network.

Speaker:

Mm-hmm.

Speaker:

and that's been great, to have that

Speaker:

level of diversity in the group.

Speaker:

That's wonderful.

Speaker:

So I know people will want to keep

Speaker:

in touch with you and follow up.

Speaker:

So where can people find.

Speaker:

I'd say a couple things.

Speaker:

So first obviously is collective

Speaker:

50 four.com, and that's the

Speaker:

number five four.

Speaker:

And, we offer a newsletter you might

Speaker:

subscribe to that.

Speaker:

It comes out once a week.

Speaker:

It delivers, three things in it.

Speaker:

a blog on Mondays, a video on Wednesdays,

Speaker:

and a chart of the week, which

Speaker:

is benchmarking data on Friday.

Speaker:

So you might check that.

Speaker:

And then I am a published author.

Speaker:

I, I have a book out called The

Speaker:

Boutique, how to Start Scale and

Speaker:

Sell a Professional Services Firm

Speaker:

by yours truly, Greg Alexander.

Speaker:

And you can find that on Amazon

Speaker:

and that might be useful as well.

Speaker:

Fantastic.

Speaker:

Thank you so much for joining

Speaker:

us today.

Speaker:

And all that information will

Speaker:

be in the show notes so everyone

Speaker:

can find you.

Speaker:

Thank you so much,

Speaker:

Greg.

Speaker:

Okay, my pleasure.

Speaker:

Thanks for having me.

Video

More from YouTube