We had playbooks on everything in the business.
I looked at my business almost like a franchise, even though I never set up the company as a franchise, in the way that everything was extremely clear on how it was running so that anyone could jump in, plug and play model.
We had metrics, real-time metrics across the entire enterprise.And I'm not just saying financials.Usually most companies just have financial sales and marketing.
I'm talking everything from the customer support tickets, how quickly were they getting resolved, who was resolving them, what was the average time rate to, you know, every single component of our business was, we just knew everything down to the minute of everything that was going on in the business.
And I think that once they saw that, plus the biggest thing, I didn't have one client that represented more than 1% of my entire business.
So for that reason also made it very valuable because I think too often you get this whale of a client that represents 80% of your business.You lose that client, you're screwed.
Whereas in my world, literally my largest client represented like 0.9% or whatever was of 1% of my business.
Welcome to Growth Think Tank.This is the one and only place where you will get insight from the founders and the CEOs of the fastest growing privately held companies.I am the host.My name is Gene Hammett.
I help leaders and their teams navigate the defining moments of their growth.Are you ready to grow? Today we're going to talk about exiting successfully.I believe that a lot of people want to exit their business.They want freedom.
They want their businesses to run well.They want them to be profitable.But eventually someday you're going to want to hand it off to someone else.
could be your team members it could be someone you have to in family but either way you wanna leave them in a good shape you don't wanna leave them a bag of shit if you will and so i thought i would do a collection of interviews of successful exiting for you as my audience and then today we have the story of
Jennifer Berkowitz.She's now with RNJ Advisory Group.She's a coach similar to me.But we talk about her exit.We talk about the things that she got right, which is most things she got, you know, probably pretty lucky in this.
I'm not saying that she didn't work hard and she built a really strong company.She had, you know, the playbooks and the metrics and she had a team behind her that was really aligned together.Those are critical if you want your company to run well.
But if you want to sell, those become things that will make you more money, be more valuable business if you have those things in place.And so today we unpack those with Jennifer.My name is Gene Hammett.I'm an executive coach.
We do leadership development for companies that have a big opportunity in front of them to make sure everyone's aligned together, make sure that the managers are leading their people and not just pushing paperwork and getting things done.
They're actually leading and developing the people around them.And when you have that in your organization, you're going to be able to Face those challenges in front of you with much more persistence, much more gusto, if you will.
If you have any questions about the work we do, I'm happy to sit down with you and even help you identify some of the blind spots that you don't know you have.I've been doing this for more than a decade.
If you're sitting there going, I'd kind of like to talk to someone about it, I'm happy to do that for you absolutely for free.You can take the plane and run with it, or you can ask me and my team to help you.
So if that's interesting to you, just go to Gene at GeneHammett.com.That's my email address.And when you really decide how you want to move your business forward, you can keep listening to to these podcast interviews.Thank you.
But you can also get on the phone with me and just chat.We don't have to.I promise not to even sell you anything in that first call.And if we decide to move forward, we will look at how I could serve you and your organization.
So just send me an email.Gene at GeneHammett.com.Now, here's the interview with Jennifer.Hi, Jennifer.How are you?
Hi, I'm good, Gene.Thanks for having me today.
Thanks for being on the podcast.We're going to have a great conversation about your experience of eventually exiting your business and then you became a coach.And so it's pretty good transition after you've gone through something like this.
So tell us about your company, R&J Advisory Group.
Sure.Well, R&J Advisory Group is my coaching company today.And it's funny, I never thought that I would jump into coaching.
But one of the things that I'm realizing in my life is that my whole purpose in life is to give others the same freedom I have.And the way I got here was I had hired coaches in my tech company years ago.
So I had started an online data backup and recovery business back in 2002. And it was interesting.So over the years, I struggled for a long time.I started out of my apartment, lived on OBL and PB&J like probably a lot of entrepreneurs did.
And it was right after I hit about that million, a little bit past it, I joined an organization called Entrepreneur's Organization.And it was one of my four mates who... He didn't even hand me the book.
It was the book called Mastering the Rockefeller Habits, which is from Berne Harnish, which is the original book before Scaling Up, The Scaling Up Methodology.And he literally hit me over the head with it.He says, Jen, you need this so badly.
And so my team and I, we tried to implement it ourselves.And we did for the most part.But it was right around the time when I started to hire a coach to help guide us that that's when things really started to take off.
And we were about 10 times more expensive than all of our competitors.We were a complete white glove backup company.We were obsessive over our clients and how we took care of them and how we were different in the market.
We were about 10 times more expensive, but we still won all the business.So after I exited in 2014, I thought, oh, great.Kumbaya.I'm retired now, right?And what I learned was that there's two types of retirement.There's business and financial.
Financial, awesome.Business, boring as heck.I was 40 years old back in 2014. Sorry, I couldn't go on.And I realized I was bored out of my mind.So I started to coach mostly minority companies, helping them hit their first million in revenue.
I absolutely loved it.And then people just started asking me to help them coach and scale their business in the way I had done at my company.And
And so I called Vern and the team over at Scaling Up and I said, you know, I think I just want to go certify myself just for fun because I'm a lifelong learner.
Little did I realize I was going to then eventually, once I got certified, just fall deeply in love with the whole coaching world.And that's how R&J came to be.R&J stands for my two boys, Ryan and Jake. I had created that company.
Literally, it took me five minutes to create the name because after I sold the company, the company that bought me needed me to come back in to consult with them.And because they bought my company, I had nothing, no company to use.
So that's when I called my accountant.I'm like, just create R&J Advisory Group real quick for me. That's how it all started.
I'm glad to have you on the podcast.I know I saw you at an EO event, the EO Nerf, a few weeks ago where you were on a panel with other people who have exited.It was fascinating to see the different sizes and the different types of exits.
We all know that there are a bunch of different things.You were in a technology company, Data Recovery.
Yeah, it was online data backup and recovery.
Were you intending to sell when you first started?
No, I wasn't.I wasn't.What I was looking actually to do at that stage of my life was, at that time, I was actually out of the day-to-day of the business, but I was in the process of looking to move to South Florida.
At the time, the company was based in New York City. I was looking to move to South Florida, still own my company.The company was just, it was extremely profitable business.There was no reason for me to necessarily sell it.
The running joke was that I had just had my second child, my little Jake. I would get calls every once in a while from companies, PE firms, VCs, competitors, asking me if I was interested in selling.
And I never really entertained any of the ideas of it, except at this moment in time.I remember Jake was in my arms.He was a few months old.And I'm like, you know what?And they said to me, Jen, we just need some basic information on you.
And we're happy to give you a number of what we think it's worth. And so at that moment in time, I'm like, you know what, why not?I was just kind of curious at that stage.I guess I had my company like 12 years or whatever I had.
So I said, sure, we went under NDA.And they basically wanted to know the number of clients and I think our revenues, just some basic information, nothing that would destroy me if they knew it.And they gave me a number.
I was like, it was more than I thought the company was worth.And so I was like, you know what, let's keep talking.
And then once they got under the covers and looked at how we were running the operation, from the LOI to the ultimate exit, I ended up making even more money because they realized how valuable my company was once they saw what was happening.
And I really attest a lot of that to doing a lot of the things right in the business.So for example, we had playbooks on everything in the business.
I looked at my business almost like a franchise, even though I never set up the company as a franchise, in the way that everything was extremely clear on how it was running so that anyone could jump in, plug and play model.
We had metrics, real-time metrics across the entire enterprise.And I'm not just saying financials and usually most companies just have financial sales and marketing.I'm talking everything from the customer support tickets.
How quickly were they getting resolved?Who is resolving them?What was the average time rate to, you know, every single component of our business was, we just knew everything down to the minute of everything that was going on in the business.
And I think that once they saw that plus the biggest thing, I didn't have one client that represented more than 1% of my entire business.
So for that reason also made it very valuable because I think too often you get this whale of a client that represents 80% of your business.You lose that client, you're screwed.
Whereas in my world, literally my largest client represented like 0.9% or whatever was of 1% of my business.So, and we were based in New York City.There were so many things that went into place that allowed us to get the exit we got.
Jennifer has been talking about metrics and she also mentioned dashboards.Why they're important is because you've got to know what good looks like.
If your team members don't know what good looks like and don't know what the targets are, they'll probably never hit it.
But if they hit it and they start to push themselves and there's some clarity there, not just with the lagging indicators but also the leading indicators of your success, it paints a full picture. It allows you to do this.
I'm working on this with a client of mine right now.It's not been easy, but once we're done, it's going to be very useful for them to improve their sales process, because that's where we're looking at this initial metrics and KPIs and dashboards.
So you want to make sure you're doing this consistently, doing it well, and getting everyone on the same page.And then you can have all the things you need to grow your business.Back to the interview with Jennifer. So a lot to unpack in there.
One of the things you talked about was you go into NDA, you give them the basic numbers, and then you go into like an LOI and you're like, the value increased.Well, yeah.
Based on your best understanding, or maybe they even gave you some hints, not counting about the financials, but we get the metrics and the playbook, but like within the leadership and culture, what were the most important aspects of the value increasing for your company?
outside of the metrics and everything else.We had a really good reputation in New York City.We had won a lot of awards, you know, best places to work, all that kind of, you know, that you would know about to build a good culture.
So that definitely helped.I think that we just did things very differently than all of our competitors as well.So for example, We had brand promise guarantees.If you couldn't recover your data, we would guarantee we'd give you your money back.
We also guaranteed that you'll always have a senior level engineer to help you 24-7.You would never be passed to another engineer, start to finish.So we just did everything very differently.In terms of the
the team and we had automated so much of our business so that we didn't have to have so many employees.I'm not a big fan of just having employees to have employees.You need to have the right people that have the right culture, right core value fit.
So, I mean, don't get me wrong.There was a lot of mistakes that I definitely made over the years as well that
I find so fascinating today how I would have done things differently today, knowing now having been on the other side, seeing my clients have massive scale ups, seeing them go through their exits.
It's fascinating how a lot of the things I think I did right, but there were definitely things, for instance, I love my team.However, during my tenure, there were definitely
teammates that, you know, the saying goes, what got you here ain't going to get you there.And I had some people that during my tenure, I loved them, but I knew in my heart that they weren't going to get us to that next level, but I kept them anyway.
And one of the things that I'm very adamant about with my client base is that if you're not, if you're not willing to make those tough decisions, If you're not willing to fasten your seatbelt, don't call me.
I promise you it's not going to be a good fit because if you really do want to have that scale, you really do want to have the profit margins and everything that you're dreaming of, you're going to have to make those tough decisions.
You're going to have to fasten your seatbelt.The ride is a little crazy, but at the end of the day, the ride is going to be really fun because that's how it should be so that you can get that true happiness and freedom.
But just a lot of lessons that I learned.I think I'm probably answering in a few different ways for you, but hopefully that's... Now, she just said, what got you here won't get you there.
Now, maybe you picked up on that, but what she really means by that is the people that got you here may not be the people that get you there.
As your company grows, those people have a certain level of experience and skill levels and some of them will evolve with you and some won't.
And a lot of leaders that I work with get really bent out of shape and stress and they want to promote from within because that creates a great culture.
But sometimes you have roles that are very strategic or they need the right kind of leadership and experience.And not everyone has that coming into it.In fact, most people don't.
And so you have to be honest with yourself and be self-aware about each person's ability as your company grows and goes through different inflection points.
Quick example, a client of mine started his business in a garage, literally, and now they're over 150 people.They've got 70,000 square feet, and he's struggled with the transitions that are a part of this, and I've been helping him through that.
I'm just telling you this now because I know you want to be the best leader you can be, and you just got to know that these things are coming.Now back to Jennifer. I want to go back to something else you said too, Jennifer.
You said before you sold, you were out of the day-to-day.Yeah.I know that you mentioned that you had one baby and then you had a second baby.I'm assuming that's the reason why you were out of the day-to-day, but the business was running without you.
You had a leadership team in place or how would you describe what you had in place?
Yeah, I had a leadership team.It was funny because when I had my first child, I'll never forget this, I was literally in labor with my baby. I was calling the office and I'm like, so what's going on?How is everything?
And it was right then and there that I realized I didn't have the right metrics because everyone's like, oh, everything's great.I'm like, well, what does that mean?What does that mean that everything's going well?I didn't know.
And that's when I then started, when I came back from maternity leave, I had to roll up my sleeves and realize that we really needed to understand what are the right metrics.
And what I tell my clients today is, if you were to take your dashboard, take a snapshot today, and print it out, right, and go on a desert island somewhere, and you couldn't talk to your team, you couldn't log in, you couldn't call them, nothing.
Would this dashboard be able to quantifiably tell you the current health of your business and be able to easily give you the short-term forecast as to where your business is going?
If you can say yes across the board, across all of your functions of your company, then congratulations, you have the right metrics.If you can't, then you've got to start rolling up your sleeves like I had to do it.
So that was the first experience I had.My kids are three and a half years apart.So it was during that time when I realized that I had to figure out, A, what are the right metrics, and B, if I'm going to have more kids because
It's funny, when I had my first kid, Ryan, I converted my office into a daycare room.Worst decision ever.I literally took my office dresser, I turned it into a changing table.I had all these toys and exercise things, God only knows, in my office.
And I had Ryan in my office with me.And meanwhile, people were coming in and out, my engineers, my operation manager, everyone's coming in to say hello.
to my kid no one's getting anything done like this is the silliest thing which again started making realize that if i want to spend time with my kids and still have the company i need to figure out how to get out of the day today and so i think that if you hire the right people and you have the right goals and you and also to it's not about.
people saying, oh, yeah, I'm going to get this done.But how do you know that they're going to get it done without micromanaging?
So one of the things that I teach a lot is in the very beginning of my relationships with clients is actually teaching them how to project manage their quarterly priorities.Like, you might say to each other, oh, yeah, I'm going to
you know, do X, Y, Z, but how do I know that you're going to actually get it done?The likelihood, sure, I'll trust you, but that doesn't work necessarily.
So we started to create project plans with each other and keep each other up to date in our weekly meetings.And I think that really helped us to hold each other accountable.
And then it also enabled me to know what was going on without having to be in the day-to-day, because I could just pull up anyone's project plans to know, okay, I see where we're at.We're on track.We're not off track, you know. and so forth.
So I think that if you put the right rhythms in place and the right things that you need to see in order for you to know that everything's okay, will help you to get out of the day.
So I love where we're going with this.We've been talking about you exiting your company.You became a coach because you realized that everything is different after you let go of that.
What I've seen happen with myself and my clients is once you sell or you make a big shift like that, you don't know who you are anymore.You lose your identity.Did you feel like you lost your identity?
Oh, we're going to go down a rabbit hole on this one.Yeah.So when I So here's something interesting.So because I didn't have a plan B, because I sold and I sold really quick, I mean, everything I asked for, I got in that in that deal.
So it was a very quick turnaround to sell the company.The problem was, is I didn't have a second
like a plan B. What happened prior, something I didn't share before, but something that might connect with a lot of your audience members, is that I was sick for many years and no one knew what was going on with me.
I mean, I mean really, really sick.I had weird symptoms that made zero sense to anyone.And everyone used to say to me, I would go to doctor's offices and they used to say, Jen, it's because you're stressed out.
You're running a very fast growing business.It's all in your head. And over time, I used to think maybe that's what's going on.I don't know.And then when I sold the company, I thought, kumbaya, I'm going to be free.
I never have to worry for the rest of my life.I'm going to be healthy now.Right.I moved down to South Florida.Oh, and by the way, I changed my name because I had gotten married while I was while I had my company.So in New York, I was Jen Walser.
But i was married in two thousand ten so i was jennifer berkowitz legally and so when i sold the company i said well i might as well become jennifer berkowitz because there's no reason for me to keep my name anymore at that point i'm forty years old everyone knew me by jen walzer so i come down to south florida two things happen.
One, if you google Jen Berkowitz right when I moved down, you would get nothing about me.Meanwhile, if you had googled Jen Walzer in New York, we were in the trades almost daily.We were constantly in the news.
We had probably 30, 40 case studies, but literally right after I sold the company, they changed all the names of everything. It was the weirdest thing.All of our case studies, instead of saying Jennifer CEO, they would change the name to the new CEO.
It was so weird.So then you move, come down here.No one knew anything about me.I don't have a job.I'm like, okay, now what do I do with my life?
And then I got really sick because my whole immune system took a dive, which I then found out later on, I had Lyme disease.I was blind and bedridden at one point.It was really bad.And that's a whole nother story of how I got better.
But it was a crazy experience that I went through. And just trying to kind of rebuild, like, who am I and what is it that I want in my life?And so it was a really, really fascinating, tough few years of trying to find myself.
I would go to dinners with new families, and all the guys would be talking together.And I'd be talking about mommy and me classes and diapers and whatnot.And it was just like, whoa.It was like I was on the bullet train and just stopped.
And all of a sudden I'm like off in some pasture somewhere.I'm like, OK, what do I do?It was really strange.
I'm glad you navigated it well and you've been able to be here today and become the coach that you are.I want to take us back to the successful exit that you were able to accomplish.I know people are picking up on this.It was really quick.
You got more money than you thought.You only talked to one company.This is not the natural way of this happening.Wow.You know that because you've talked to a lot of people and you've seen this and go, oh, you've got competitive bids? How many people?
Because I had a client went through this earlier this year, and they decided not to sell because I asked a question.And I was like, if you got the money, what is their plan to help you?
Because they weren't going to sell a minority stake, not the full company.And the company would not give them a detailed plan on how they would grow the business.
All that aside, a successful exit, Jennifer, beyond the growth and the revenue and the highly profitable, what do you think the three most important elements are that an owner can work on today if they want to sell in five years or more?
What are the three most top important things?
differentiate yourself in the market, figure out how you can be more valuable, really understand your niche, really understand your core customer.Do not try to be everything to everyone.Double down and be the greatest at something.
But let me take a step back on that.I think if you know you want to sell in five years, you've got to also figure out who would you potentially sell to?Because you kind of want to work towards kind of a direction, right?
Like if you want to be bought by a big public company, a specific company, then you need to understand what is it that they're looking for and how you can be more valuable to them, right?So it doesn't really matter if you think about it.
It doesn't really matter what you focus on.At the end of the day, it focuses on what they care about, what the end company that you want to sell to cares about.
If you don't know who you want to sell to, that's when I would say is be the best at something.We were the best in financial services as far as banks, broker-dealers, hedge funds, who had compliance challenges.
We were the only ones that would send letters on their behalf to FINRA, SEC, saying how we were going to make sure that they were compliant.I would sign my own name on it.No one, Iron Mountain, none of them would do that.
Again, we had to make ourselves look different, but because of that, we were more valuable to these companies. Um, so you want to figure out how you differentiate yourself to profit, profit, profit.
I'm a big fan of profit because if they can figure out how to scoot you up and make themselves even make you even more profitable, profitable, that's great.
I think though, Jean, it really depends on what, who the company is and what they're trying to achieve.Again, are they trying to sell to a certain company or are they just trying to, are they going to look to acquire other companies?
What are they going to look to do for their exit?
I know when you're on the panel, I try to figure out the best question that I could ask in front of everyone, but I find a lot of companies miss the opportunity to get their leadership team in the right place for the sale.
I don't mean sharing with them that we're going to sell this.In my opinion, there should be enough transparency, especially with the C-suite, that you're able to tell them, I'm going to sell the company in the future.
But when you look back at your executive team, is there anything that you either did well or wish you had done differently to make sure that it would have been a smoother transition as you sold?
I actually think our transition worked out really smoothly.I have no, like, I was actually happy with the transition.I unfortunately couldn't tell anyone anything.I was a hundred percent owner of the company.I didn't have any partners.
However, the one thing that I told my team and because I always had a high degree of trust with them, that I was always truthful, always transparent, you know, in general with them was that if I ever sold that they would, I would make sure that they were taken care of.
And so when I did sell, I gave each of them for every year they were with me, I gave them a month of pay.Plus, I made sure that they had a great job with the new company after they were all going to be taken care of.So, you know, it's hard.
Transitions are not easy.Unfortunately, I think only one or two things, just one.Maybe there's two people left at the new company still today, 10 years later.But It's a hard thing because it depends on your team.
My hope is that, for those who are listening, that you're building that trust with your team.I'm a big fan.I did open book management.I shared everything.
The only thing I couldn't share, like I said, is this exit because I just didn't know at the time how they were going to react.But they were OK because once I knew what was happening, I then shared.
And I said to them, I said, I promise you, I'm going to take good care of you.I'm going to do everything in my power to make sure you're OK. I don't know.
I'm probably not answering the question for you, but it's never an easy conversation with the leadership team.
I mean, there's a lot of tears in that room, but I will tell you that the money that they all received, they bought houses, they got engaged.Lots of things happened, which was nice.
That's an incredible story.I appreciate you being here to tell us about your successful exit.Jennifer, thanks for being on the show.
Yeah, thanks for having me, Gene.It's a pleasure.
Wow, what a great interview.I love all the details she talked about, the playbooks that allowed her business to run smoothly, the metrics, the dashboards, and getting the team right.All those things are very important.
It's so helpful, I think, to know that in advance because once you go into the sales process, it's too late. You won't be able to address the holes and address all the things that are in there.You're going to have to do that earlier.
And so that's my suggestion for you is to take this information and start building a plan, prioritizing the things that you need to get right.And if you want help with that, just send me an email.Gene at GeneHammett.com.
I'm happy to give you some tools and have a conversation with you to customize that specifically for you.Not a sales call, just a way to serve and connect with you.
So if you're listening in here and you're curious, make sure you email me, gene at genehammett.com.When you think of growth and you think of leadership, think of Growth Think Tank.As always, lead with courage.We'll see you next time.
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