Welcome to the Rialto Marketing podcast. Today's episode is a revenue acceleration series interview where we talk to seven figure B2B professional service firm owners that are actively trying to grow their business and get to the next level. We talk about the good, the bad and the ugly so that you can learn from their experience.

Join Tim Fitzpatrick and Jon Brown for this week’s episode of The Rialto Marketing Podcast!

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Deciding To Sell Your Business

Tim Fitzpatrick
Welcome to the Rialto Marketing Podcast. Today's episode is a revenue acceleration series interview where we talk to seven figure B2B professional service firm owners that are actively trying to grow their business and get to the next level. We talk about the good, the bad, and the ugly so that you can learn from their experience. Hi, I am Tim Fitzpatrick with Rialto Marketing, where we believe you must of your revenue roadblocks if you want to accelerate growth and marketing shouldn't be difficult. Thank you so much for taking the time to tune in. I am super excited to have Jon Brown with me from Interlaced. John, welcome and thanks for being here.

Jon Brown
Yeah, thanks for having me. It's really great to be here.

Tim Fitzpatrick
Yes, I'm looking forward to digging into this with you. I know you had an IT consulting MSP firm that you sold. You're now working for the company that bought you, so I can't wait to dig into this. I think there's so much people can learn from your experience. Before we do that, I want to ask you a few rapid fire questions. Are you ready to jump in with both feet?

Jon Brown
Yeah, I'm ready. Let's do it.

Tim Fitzpatrick
Okay, so very quickly, what do you do and how long have you been doing it?

Jon Brown
Yeah, so I've been in the IT services space now for about, I'd say about 16 years. I got into It when I first moved to the Washington, DC area, sort of like an IT analyst and kind of worked my way up from there. And I always kind of worked in the Mac It services consulting space. So long time, but really enjoyed it.

Tim Fitzpatrick
Yeah. What's the most important lesson you've learned in that time.

Jon Brown
Especially when you're in IT services, it really is a customer service job. Right. At its core, that is what it is. And I think for a long time I struggled with that concept, and it was really just about technology and showing how much I knew from a technology perspective. But when I started really embracing the fact that, look, I have customers, I have to have good customer service skills, that's really when I went from being an okay technician to being a really great problem solver, I guess I would.

Tim Fitzpatrick
Yeah. And I think that's certainly hyper relevant in the IT space, but I think that same lesson and mindset, it can be applied to any business. Right? I mean, we're in the customer service business. That's just the reality of it. So in 16 years, it's a long time. You certainly have seen ups and downs throughout that time. When you hit those challenging times, is there any kind of mantra or something motivational that you say to yourself or share with your team to help push through those times?

Jon Brown
Yeah, I think for me, it really is all about understanding and realizing that everyone around you. I think that when you're in a difficult situation, you look at other people and you go, oh, wow, look at how well composed they are, how well they have it together. I'll never be able to measure up to them. But you really have to just realize, look, we're all figuring this out. We're all doing the best we can, and no matter how well someone looks on the outside, they're very much struggling with the same things that you are. So I always just kind of give myself that perspective and try to be a little bit easier on myself, because I think that sometimes people are their own worst enemy, their own worst critic.

Tim Fitzpatrick
Yeah, man, I love that perspective. And I interviewed somebody a while ago who said, nobody's got it all figured out. And so it's so easy for us to see the outward appearance of people and be like, oh, man, they have got their stuff together, but man, nobody has it all figured out. We all have problems. I always tell my kids, like, we're all just people. So you see celebrities and you idolize them, man, they're people too. They got problems like everybody else. Just let it go and we're all the same. Right? I love that.

What You Need To Know About Selling Your Company

Tim Fitzpatrick
So your company, Grove I mentioned this briefly your company, Grove, was purchased by Interlaced in 2022. Can you share with us what that experience was like and what you learned from it?

Jon Brown
Yeah, so I started the company in 2014 and Incrementally grew it to a point where I started garnering interest in terms of other IT services companies looking to acquire or grow into the Washington, DC market. I would say that the experience was pretty interesting. I think that it was very much a journey. Right. Like, I started the conversation with Interlaced a good two years prior to actually executing on the sale. And not only was it a combination of just a lot of good financial business due diligence to make sure that it was a good business decision, it was also equal parts. Is this the right kind of company? Is this the right final destination or home for the clients that I have been servicing and the relationships that I've been building? I think you kind of touched on it earlier. It is a customer service industry. I always looked at my It services business as I'm building relationships, and that's why people stick with me as a service provider, as a differentiator Is. I'm in the people business. I'm not in the technology business. And so it was really important for me that the company that we would either merge into or sell to would be as people centric and people focused as we were, or more so, realizing, of course, that no company is perfect and no plan ever goes perfectly.

Tim Fitzpatrick
Yes.

Jon Brown
And so it was a difficult decision, but it was ultimately I wanted to bring the business to the next level. I wanted to get to a point where we could reach the goals that we wanted to reach, which were, let's become a nationwide Apple focused MSP. How do we do that? The easiest path to that eventuality was selling and merging in and joining forces with another It services company. So the process post sale I think was very much different than I thought it would be. Presale right? I think you go into it with, okay, I've been planning, I've been prepping, I've been thinking, I've been strategizing with this partner for the last couple of years. Now it's time to do the actual merging. Knowing that that change is coming was something that we acknowledged going in even before we sold the business. Interlaced acknowledged that it was going to be kind of an emotional experience for me as a business owner transitioning from CEO to vice president, but still sort of retaining a little bit of autonomy within the company. And it was, I think, the biggest shock for me, or the biggest thing that was difficult for me was not really understanding or being prepared for the process of merging internally operations, but also just overall internal expectations. Not just from company to company, but me relating to employees that have been working at Interlace for many, many years and vice versa. Employees working at Grove for many years, and that's an interesting dynamic. Right. We've got two teams from two different regions of the country suddenly put together, not by choice. So there's a lot of empathy that goes into the employees and team members on both sides. And integrating at the people level was also a little bit more challenging than I think anyone had anticipated a year in, though, I'd say that we've made significant progress. Clients are really happy with the improved level of coverage in terms of geographic location, and overall, I still think it was a great decision.

Tim Fitzpatrick
So I want to break a couple of things out here and thank you for sharing that because I think it's for a lot of people selling their business is kind of this pie in the sky thing. It's like, oh my God, if that happens, I've hit the pinnacle. And that's not always the case and I think it's when you first started Grove, did you start it thinking that you were going to sell?

Jon Brown
No. When I started the business, it was very much on accident, I would say, right. Like, I started the business as a consultant, and I got a lot of clients and I had a hard time saying no to money and revenue. So I just kind of grew organically and I wasn't growing with intention, I wasn't growing with goals, and I had no prior business experience. So I was very much learning and building the business as I was going, making a lot of mistakes, trial and error, and got to a point where I was like, okay, I've built this thing, now how do I take it to the next level?

Tim Fitzpatrick
Yeah.

Jon Brown
And it was that moment that I realized that I can continue working with this business and I can live comfortably and I can have a company that relatively stays within a certain size or I can kind of go out there and see what's available. And I think for me it was venture capital, how do I get more funding so that I can continue to grow, or strategic partnerships? So I just started exploring both and that's kind of when the opportunity presented itself to me. So it was very much an opportunity. It was definitely not a destination that I ever had considered now and.

Tim Fitzpatrick
I think it ends up being that way for a lot of people. I know the first business that I was a partner in was a wholesale distribution company and we ended up selling it. But early on, when the company was started, that wasn't necessarily on the roadmap per se, but as we started to grow and the market evolved, it became clear that selling was going to be an opportunity. And I think what a lot of business owners don't think about is if you do want to sell, there are things that you really need to be focused on if you want to maximize your sale price. Pulling as much money as possible out of the company so you can make as much money as possible can oftentimes be a huge detriment to you getting as much money as possible when you sell. Because they are going to be looking at your EBITDA, right, which let's just call it net profit to make things easy. They're going to be looking at that net and if you've been pulling out as much as possible, showing very little net to reduce your taxes, that ain't going to help you when you sell. So I think people overlook that. I think they overlook, hey, what do I really want out of this? Right? And it sounds like you took a lot of time to really think like, gosh, what do I want moving forward and what's going to be the best way for me? And the way you did it may not necessarily be right for everybody, but it was right for you. And that's the most important part. And it's gotten you to a place where it's helping you accomplish your goals and it's what you wanted, right, but you never know what's going to happen right after that sale, right? And so you're working through that process. It's never going to be perfect. There are going to be things that are going to pop up and you just have to be one of my favorite quotes is flexibility is the key to stability. And I think it was John Wooden that said that, man, in this process, man, you got to be flexible. There's so much stuff that comes up before and after, but I really love how you were super clear on what you wanted and that helped you guide and make the best decisions possible for you.

Jon Brown
Yeah, absolutely. And I think also, too, that for people who are thinking about selling, especially with a services based business, there's also just a little bit of reality that has to set into. Right.

Tim Fitzpatrick
Yeah.

Jon Brown
It's really hard to show value even if you have high EBITDA, even if you have high sales, even if you have a ton of money in the bank. It's really hard to show value in a services based business when the services are tied to individuals. Right. And so that's also a factor that I definitely considered. And I think that part of the reality of where I was as a business owner operator wasn't just like, I want to take it to the next level, but also professionally looking at where I was and what I wanted to do. I wanted to move into more of that leadership role where I was less in the day to day, less in the weeds with my clients. And again, I could have stayed in the business and I could have continued helping clients, but it would have just further cemented my future as well. I'm just a technician with a business versus a leader and owner that happens to have a technology company.

Tim Fitzpatrick
Yeah, that's another very good point, John, and thank you for bringing that up, because most people do not want to buy a business that's heavily owner dependent. Like, if you pull the owner out, the wheels come off. There's very little value in that, no matter how much money you're making. So that is another really important point. When you get to that place where you decide you want to sell, if you really want to maximize the return, it takes time for you to if you haven't been preparing your business for that already, that's a two, three, could even be longer year process to get your business to the place where it actually is extremely saleable. So thank you for bringing that up.

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Positioning Yourself Where Clients Would Be

Tim Fitzpatrick

One of the things that you talked about or shared with me in the pre interview was that with Grove, one of the things that worked really well for you early on, I put this in quotes because you said positioning yourself where clients would be. Can you tell us a little more about that and what you did?

Jon Brown
Yeah, so early on in the growth of the company, it was really important for us to think of creative ways to sell to clients, but also to stand out within a pretty crowded marketplace.

Tim Fitzpatrick
Right.

Jon Brown
And realizing that the competitors around me were all kind of going after the same kinds of clients that I was going after and wanting to make sure that we were approaching those clients differently. And one of the ways that we did that was identifying exactly who our key ideal client was. And then once we honed in on that. So for us, it was companies between zero and 50 people were predominantly using Apple Computers. That was our target demographic. That was our target customer, ideal customer. We focused heavily on It support services for Apple based systems. So the idea was, let's go to places where people who have businesses and Apple Computers just go to where they are. So I reached out to WeWork and set up a time where we could go once a week and put up a little booth and offer free It support services for 1 hour a week. And every time we would go, we would have a line right out the door. People would come up and we would spend 1015 minutes per person. And sometimes we were able to help them, sometimes not. But at the end of the conversation, we dropped our business card. And the idea was, we're planting seeds. We're not asking for money. We're offering a service, and we're showing people that we're here and we're available. And that exercise really netted us a lot of clients. Not just clients, like immediately, right then and there, it was sowing those seeds for those companies where maybe one, two people became 20 30 person companies, pulled out that business card and was like, I'm going to call this guy and I'm going to pay it forward. I'm going to give back. He helped me when I was really a small company. Now we're going to go and reach back out to Grove. So it was really an interesting perspective of not just marketing to the demographic and being there where they're at, but also giving back and adding value into that relationship made the post sales process so much easier when selling them or pitching them, because they already saw the value they already experienced and had the service. They already had the interaction and knew how high quality it was. They knew that we were willing to go to them as well. There was just a lot of really positive experiences and personal relationships that were actually, quite frankly, built out of that exercise.

Tim Fitzpatrick
How often would you do that?

Jon Brown
Yeah, so we would go to different locations. There were three locations in the area, and we would hit up a different location each week.

Tim Fitzpatrick
You said it was for about an hour?

Jon Brown
Yeah, about an hour a week. So it wasn't a huge investment. And the idea was we work with kind of promote it and advertise it and say, like, hey, we're going to have an It company. They're going to give away some free It, set up a booth, basically do some rudimentary troubleshooting, right? I'm not going to get super in the weeds if you're having a major technical issue and I can't fix it in 10 15 minutes, I'm not going to put myself out there and accidentally break your computer. But yeah, if you have a quick question, you just need a consult on something, happy to have that conversation.

Tim Fitzpatrick
I love this because it's just similar to speaking right as a professional service provider. People are getting to know you. You're demonstrating your expertise. You're adding value and helping them. And like you said, you're just planting the seed. Some of those grow, some of them don't, but that's okay. And an hour a week you're there. And whether they have a problem or not, because we work promoting it, they're still promoting your brand and your name on a regular basis. And so I love that. And it's just positioning yourself where clients are. This is like a I mean, it's a fundamental premise of marketing, but it's one that I think people don't go deep enough in. You took the time to understand who your ideal clients are, which is super important. And when we do this work for clients, we call it an ideal client GPS. It's a list of where the ideal clients could be. But with that list, you know that if you're there, you're fishing where the fish are, which is so important because it's not just like you weren't targeting every small business, because every small business is not an ideal client. And especially with Apple, specific industries tend to be more heavily focused with Apple. Right. What graphic design nonprofit? Is a pretty

Jon Brown
Nonprofit.

Tim Fitzpatrick
Marketing?

Jon Brown
Marketing, communications. We're starting to see kind of an uptick in legal as well, lawyers.

Tim Fitzpatrick
So the more you can hone in on that, then it's like, okay, great. Well, where are the nonprofits? Right? Where do design folks hang out? And you're getting in front of the right people. It's not just, hey, I'm going to go to a general networking event. Maybe there's somebody there that's using Apple. It's like, no, when I'm at this event for creatives, there is a very high likelihood that they are using Apple. So I love how you just position yourself where the clients are. Much higher likelihood of getting a very strong return on the time that you've invested. So I love that, and thank you for sharing that.

A Marketing Mistake: Copying What Competitors are Doing

Tim Fitzpatrick

I want to shift gears a little bit. Still talking about marketing, but one of the other things we talked about was one of the big mistakes you feel like you made with Grove early on was copying what competitors were doing instead of focusing on what you did best. Why was this a mistake and what did you learn from it?

Jon Brown
Yeah, I think it's something that pretty much every business industry sort of faces, especially when you're an inexperienced business owner. Right. So I started out as, hey, I'm a consultant, and I offer some really amazing advisory services. Right. And a lot of clients came to me because they like, that bespoke one on one, non rushed type of experience. But then as you get to a certain point, you're like, well, I want to get to this next level. How do I do that? Let's look around and see what my competitors are doing. It's like, oh, well, they're doing networking and they're doing web design. Maybe, and they're doing cybersecurity, and it's like, yeah, okay, well, I don't know much about cybersecurity or networking, but that's what my clients are doing. I can probably learn a little bit about that. I can partner with another consultant. I can tack on those additional services. And when I was doing that, I thought, wow, that is growth. I am growing the company by expanding my services catalog to mirror my competitors so that now it's more of a level playing field. I can say that I offer the same services as my competitor. And in your mind, it seems to make sense, right? A client comes to you and they're like, well, I just had a conversation with one of your competitors, and they offer X, Y, and Z. And you want to say, yeah, I can do that too, in order to kind of instantly close the deal, instead of saying, well, here's the problem with the approach and how we handle it, and letting the customer make up their mind in terms of what it is that they actually see value in. Do they see value in a large service catalog, or do they see value in the bespoke way that you provide services? And the further I deviated from the services that actually got me, my initial clients got me to the point where I was able to think, how do I grow this? The harder it was for me to actually close deals and make sales. And the clients that I got when I was in that phase were really even though they were sort of like my target demographic customer, they weren't my ideal customer. They weren't aligned with how we operated because we served them up a false narrative of what it is that we actually did based on what we were hoping to achieve, which, again, was a step or two removed from how we actually started. So the kind of pushing pause on growth. And I was like, this was so much easier. Like, I got here easily, and now I'm struggling to get to the next level. How do I get back to the easy growth, and it really was, okay, let's get back to basics. Let's think about the strategies that worked. Double down on that, provide amazing service, really hone in on the services that makes us unique, which, again, was the very detail oriented and bespoke nature of Apple desktop support services. Based on my many years of experience in the field, which a lot of my competitors didn't have, didn't have the depth, breadth of knowledge in the field. So just really leaning into that heavily got me sort of back on track and realized that, sure, I can add on other services, I can compete, and I can organically grow the service catalog, but it has to be in line with the core function of how I got here. Right. I was really good at It support services, so let's not get into networking until we have just as much experience in it and we can offer the exact same level of bespoke service in that vertical as well, so that the service is consistent from product A to product B. And that was really the hardest thing for me to learn and the thing that I struggled with the most.

Tim Fitzpatrick
So what I'm hearing is you kind of strayed away from your core competencies thinking that you needed to offer the same things as your competitors, which as you found it, diluted your focus. It's hard to service clients at a high level. They tend to then become not as profitable because you're doing things that you're not great at. So I appreciate you sharing this because I think there's a correlation here that I have to because I'm a marketer pull in from marketing. Because we see the same thing with marketing, it's very easy for us to look at our competitors and go, oh, I'm just going to copy what they're doing. And Dan Kennedy, who is like the godfather of direct marketing, says something to the effect of like 80% of businesses suck at marketing, so why the hell are you going to copy them? Unless you know for sure they're in the 20%, you have no business copying them. So again, we're looking at our competitors going, oh, yeah, I should copy what they're doing marketing, or I need to copy what they're doing service wise. Well, unless we really know that they've got it together and they're actually somebody that's worth modeling, we really have no business doing it. But I shouldn't say we all, a lot of us fall go down that path. It's not like you're the only one, Jon, that's going down that path. I've gone down that path and I know a lot of people that have gone down that path. And when we get far enough down the path, we're like, man, I shouldn't have done this. So I appreciate you sharing that because I think a lot of people will learn things and hopefully they don't have to go down the path to learn it. They learn from our conversation.

Conclusion

Tim Fitzpatrick
So what's next for you, man? You've sold. You're now working for Interlaced. It sounds like you've got a lot of the backing and the support that you need to really get where you want to go.

Jon Brown
So again, the goal has always been the same for me. Let's build a nationwide It support services company that's Apple focused, that's providing that one on one personalized type of support, but doing it at scale. And for me, it's really about taking what I've learned as a business owner and operator and instilling that into other leaders within the company. And in order to grow, you need more people. In order to grow, you need great leaders. And we all have to be aligned and we all have to be passionate. We all have to have the same goals. And then also taking the skills that I have as a technician and continuing to train the technicians that work at the services based company to think like one on one individualized consultants so that we can scale that experience. It really is an experience that we're selling. We're selling relationships. That's what we're building. And again, the same struggles that I went through as a technician are the same struggles that technicians around me are going through. And as a mentor to them, bringing them to a point where they can offer that service, just further develops the business. So, for me, it's all about growth. It's all about taking this experience that I've created and making it available nationwide. So I'm really excited about doing that. As the VP of Technology and Cybersecurity, I'm certainly poised for success within my role. I'm surrounded by great leaders within the company, and we're all focused, laser focused, on becoming the best It support services company that we can be nationwide.

Tim Fitzpatrick
I love it. So, knowing what you know now, anything you'd do differently?

Jon Brown
I think that for me, it's hard to say if I would do anything differently because my eventual outcome to where I am now is a pretty good desired state. So I'm afraid that if I had done anything differently, I might not be here. I think that where I am today, and I'm pretty happy with where I am today. I think that the reality of the situation is I probably would have enjoyed my time as a small business owner, operator, consultant, and not rushed the growth experience as much as I did. So from 2014 to 2022, that's a pretty short amount of time to have owned, operated and then sold a business. Right? And so I probably would have enjoyed the early stages of the business where I was a little bit scrappier, I could move a little bit faster, and really leaned into and leveraged a lot more strategic thought during that. Phase of the business, which would have sewed a lot of dividends into the later in the business development, making it easier for me to have more of a solid plan towards an eventuality, eventual outcome, which could have led to more of opportunities in the venture capital space. Who knows? It's hard to say, but I really enjoyed hindsight. My most amazing memories of me working within the business and running the company were the years one through three of the company. Those are the funnest and most interesting years of the business. So just spending more time in that kind of in the development lifecycle of the business strategically probably would have been what I would have done differently.

Tim Fitzpatrick
Where can people learn more about you, Jon, if they want to connect?

Jon Brown
Yeah, LinkedIn. I'm always down to connect with people, talk to them about services that we can provide. But also I put out some great content on my LinkedIn page. And the goal here is to just network and build a lot of amazing relationships with people. Again, at the end of the day, I want to build relationships, and that was the premise of my company. And that's just something that I believe in strongly as a professional. Let's get to know each other. Let's become more cooperative and more friendly relationship builders and less competitors. If we can do that, the world will be just a much better place.

Tim Fitzpatrick
We'll make sure that link is in the show notes, but it's LinkedIn.com/in/Jonbrown2, and that's J-O-N Brown to the number. So, John, thank you so much. I appreciate you sharing your experience. Those of you watching listening, I appreciate you as well. Jon has been sharing his growth path. If you are on that growth path, you got to remove your revenue roadblocks. If you want to know which of the nine revenue roadblocks are slowing down your growth, you can do that over at revenueroadblockscorecard.com, or you can always connect with us at rialtomarketing.com. That's rialtomarketing.com. Thank you so much, John. Thank you. Till next time. Take care.


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