Making Your Business Sellable

About this episode:

In this episode of the Agency Spark Podcast, Sara interviews Alison Hulsof on how to make your business sellable. They discuss outsourcing and delegation, branding considerations, business valuation, and more!

Alison founded Obok Consulting in 2020 after two years in private equity where she was responsible for getting businesses ready for purchasing and helping them through the acquisition process. Prior to her PE experience she founded and grew Behavior Care Specialists (BCS) in 2006. After growing BCS from a single client to 14 locations and over 100 employees, she successfully exited that business in 2018 with a 8 figure sale. In 2016 she was awarded the South Dakota Woman Owned Business of the Year. She has been featured at the Autism Investors Summit as well as the CASP Conference.

Show notes:


Sara Nay: Welcome to the agency spark podcast. This is your host, Sarah Naynay. And today on the show, I have Alison Hoelscher, founder of OBOC consulting. So welcome to the show house.

Alison Hulsof: Hi, thank you so much there. Thanks for having me.

Sara Nay: Excited you're here. So I'd love to start with a bit of your background story first. And so can you share a bit about your path that ultimately led you to where you are today?

Alison Hulsof: Absolutely. I founded a company in 2006, doing in-home ABA, which is applied behavior analysis and services for kids with autism and severe problem behavior. I grew that from the basement of my house and one client to 14 clinics in schools across Minnesota, Iowa, Wyoming, a, we were all over the Midwest. So we were in multiple states and had 14 clinics in schools in 2018. The market and behavioral health care was going wild. And at that time, investors were buying into the behavioral health care space. And so I went through an auction process and sold my behavioral healthcare company to a group of investors. I teamed up with those investors and help them grow a national platform where I helped them acquire businesses that did exactly what I had done for the last 12 years. And my job was to identify their ideal partner, acquire them and bring them in and integrate them into the platform.

Alison Hulsof: And so I did that for about 18 months. And in that time period, I saw over 300 businesses who were doing the exact same thing I had been doing and going through a lot of the same growth pains that I had gone through. And I felt like multiple times I would meet people. And I would say, and you're just one or two solutions from getting over the hump and solving the problem to either really grow your company or maximize the value of what it was worth. And so prior to the pandemic, I have six small children at home ages, two to 17. I was getting to the point where I really wanted this to think about traveling less across the U S and the pandemic hit. And so I took that opportunity to renegotiate my role and step aside and start a consulting company. So I went to my investors and said, Hey, I'm going to still stay invested with you.

Alison Hulsof: I'll still help you, but nobody's going anywhere. Planes weren't traveling, people weren't going anywhere. But I also knew it was a huge pain point for business owners. I knew they needed help. I knew that they were all struggling with the same things. We had struggled with this national platform. And I said, I think it's time for me to go back and do what I do well, which has really helped people. And so I stepped away from my cushy corporate job with a big fat salary and decided to start building a company all over again from scratch. And so I am now, um, getting ready to, I think let's see January will be my second full year in as a real business with more than just one client. And so now we have over 35 clients in multiple states across the U S and we help them figure out what they want to do with their business next. So we provide that additional support. So that is my whole life story.

Sara Nay: I love it. Thank you for sharing. That's a really interesting background story, and I love to hear what led you to ultimately taking that leap to entrepreneurship, because it's going to be a scary leap going from, as you mentioned, the cushy corporate world to doing things on your own. Ultimately,

Alison Hulsof: I think part of it is I'm a serial entrepreneur, right? I had been in, I had been an owner and operator and entrepreneur once before and I built it and it was scary, then it wasn't that it wasn't scary doing it the second time. It was just a different, scary, like I knew the risk, which maybe made it a little scarier, but I also knew what the reward was. And I knew that I have never been a good employee. I work really well when I'm building and I'm able to move fast. And so I knew the reward of being on my own again was going to be pretty great.

Sara Nay: Yeah, absolutely. Let's talk about what you do today a bit more. And so I know that what you do with your work, as you mentioned, entrepreneurs kind of determine what their next stage is that they want to progress to and what that looks like. And so whether that's selling or scaling or making it less owner dependent, ultimately. And so let's say someone's just getting started establishing their new business. What should they be considering when they're ultimately starting right from step one, let's say they're a marketing consultant and they're naming their business. Is there anything they should consider if one day their goal is to?

Alison Hulsof: Yeah. I think one of the things is ensuring that you're not getting an ane that's already been trademarked and something that you can have and hold for a really long time. But I also tell people when you name your business, it's going to be with you when you have to give your email out 385 times. And so be careful to make sure that one people can understand it. It makes sense, and that you want to live with it. Not that you can't rebrand, but man, once you start building that brand, you want it to grow with you. I think the other part of that is making sure that it identifies what you do. So not too vague, but not so locked in that you can't expand your line of service.

Sara Nay: Yeah. That's a great point on email. I think sometimes I see these like really long emails come across and I'm like, I can't even imagine just like rattling that off or spelling that out to people. So keeping in mind like that is going to be your email address is a really interesting point. One of the things that I work with consultants when they're starting to get established for the first time is should they use their name as part of their business name? Or should they use something a bit more creative that isn't all about?

Alison Hulsof: Um, I would strongly advise not using your name one. I bought companies where it was somebody's name. It was like Susie's autism shop. And I was like, oh, that's going to be fun to change. I also, I have a biller. Her name was, Eric has billing and I was that's great. But Erica, when you be, when you're beyond one of you, what happens next? So I strongly discourage you from using specifically just your name. I'm gonna, especially your first name, because that gets really tricky in the long run.

Sara Nay: Yeah, absolutely. I think that's a great point and I'm glad I was giving similar advice. Yeah. Cause ultimately if the brand isn't going to be just about you and you're not always the consultant they're going to get to work with either like in the present, in the future, if you do sell one day, then making it less about you, I think is important. Not just from a naming standpoint, but an overall brand standpoint as well. So,

Alison Hulsof: So you would ask me earlier, before we jumped on this live and said, Hey, what is the name of your company? And people ask me that all the time, but the second question they ask almost as frequently it's OBOC. And the second question that they ask is what does it mean? So we were, we took something that was meaningful to me. My great grandma's from Poland. She had escaped during the iron curtain, came to the U S spoke, no English. He had a life for herself and she was just this fiery redheaded, just amazing woman who worked so very hard to build this life. And growing up, she spoke Polish to us all the time. And so for me, I wanted to pay some sort of respect to her, but also wanted something that was meaningful. And when I started this company, the, the, the word in Polish means next to a book means next to in Polish. And so I wanted to be able to be next to business owners, whether they were growing, whether they were selling, whether they were trying to figure out how to manage their business. And I thought that was really appropriate. So no matter what we decided to do from a line of service, we could grow with our brand. Yeah.

Sara Nay: I love it. Thank you for that story. That's really interesting. So let's talk about, so someone okay, someone's excited. They named their new business or new consulting practice. Let's say they're a marketing consultant. They start working and they get to the point where everything they're doing is ultimately dependent on them. And so maybe their next goal is to scale, but also take a little bit of a step back from being involved in everything day-to-day wise. And so what are some processes or systems they should put into place to be able to accomplish that?

Alison Hulsof: So a fancy way that we do that as we create a list of KPIs that drive the business. And so I tell all my business owners let's look at what triggers you need to pull every single week to make a difference. And which of those can you just observe and plug in the right people to do them? And which of them you actually need to have your hand on the pulse and make sure that you're making those changes every day. And some of those are harder. So if yours is building relationships with people and you have an incredible close rate, then you need to keep that as part of your job for right now. But if there are other things like reviewing your financials or sending out invoicing, things like that, let's look at those things and figure out which of them take up how much time. And if I gave you that time back, what would you do with it? And then who can we hire? Because if you're identifying what you're doing, we want to identify who can we hire? How do we know that they're doing that job well, and then how do we put them into that position? Because if I'm going to give you back 10 hours of your week, I want to know that even as the business owner, what are you going to do to help grow the company with those 10 hours? Yeah,

Sara Nay: Absolutely. I think that's so important with the analyzing, what someone should hold on to versus maybe what they shouldn't hold on to. Are there any, just like general rules of thumb, like the business owners, entrepreneurs should hold on to these core items and never really looked to outsource it? Or are there any guidelines along those that you would recommend?

Alison Hulsof: I don't know that I would say there's anything that you should never give up, but I will tell you, there are what I've told all of our business owners to do is every week, once we've identified those KPIs, we put them into a simple Excel spreadsheet and we look at things every single week. What are your salaries out and what are your revenue in? And what's the percentage, right? How much are you spending on labor? And then in addition, where is that pipeline and new service coming in? No matter if you're a healthcare service industry or you're a consultant, or you're a marketing, where's the new revenue that you're going to generate coming in from where's that new money coming in. And then how do you get it from a lead all the way into action? Because that's the part it's, it's, it's like a machine, right?

Alison Hulsof: You need to know that it's coming in, you knew that you can service it well. And then also making sure that every week, even if it's 15 minutes, you're looking at your budget, right? Because people will make so many decisions in their business based on their guts or their emotions. And I'm like, this is simple. It's literally a simple math problem. Does your budget say you can afford it or not. And if you don't have a functional working budget, it's going to be really hard to run your business. Because at any given moment, you could be tired and make the wrong business decision. You can be overly emotional and excited and running on the high as an entrepreneur about the next big chase. But if it doesn't fit in your budget, then you know whether or not you should do it at that given moment. Yeah.

Sara Nay: When you start working with clients, is that something that you see that people are not doing enough of in terms of setting their KPIs and looking at it on the weekly basis and making math based decisions? Is that one of the most common things that you really help people go, yeah,

Alison Hulsof: That's learning to use your QuickBooks or whatever accounting software you're doing. I will say to people like show me the money in and the money out. That's all I want to see. And there'll be like, well, I've never logged into my QuickBooks. I'm like QuickBooks online makes it so easy. They should be paying me a referral fee because we send them constantly into it. Like you can put it on your phone, right? Like it helps you do all of this. And so that is, people are so passionate about whatever they're doing. They often don't want to pay attention to the things that just, aren't a whole lot of fun. But those things that aren't a whole lot of fun are going to be how your business is sustainable. 5, 10, 15 years down the road and make it sellable. It's not.

Sara Nay: Yeah, absolutely. And that's what I wanted to shift to next is, okay. Let's say someone gets some of these processes in place. They brought in people that are less dependent on themselves. Now they're thinking about, okay, is my business sellable. So what are some things that you help them analyze to determine if their business is sellable at that point?

Alison Hulsof: Yeah. But number one thing, you hit on it already, which is that business solely dependent on them. Because if it is it's sellable, I will tell you that because what you would have to find is an infrastructure that would then absorb it and then be able to run it just the same way. The second part of that is, is it repeatable? If you don't have repeatable systems and processes that you can then take and transition, it's also tough to sell that. And then is it diverse? Is it solely dependent on one product or one service line, or do you have multiple ways that revenue can come in and that you can continue to grow the business? So those are the things that we look at right away. And of course any sellable business should have a trend of being profitable year after year. I tell people revenue's a great number to chase, but very few businesses only sell on revenue.

Alison Hulsof: People want to make revenue, but they also want to know there's some profitability left in it. And so you've got to be looking at all of those things. When thinking about selling theirs, if you think about when you sell your business, that you're looking at the targeted process, which is the market looking to buy businesses like yours and is your business running prime. And that's when you pick the targeted time to sell your business. So it's a little bit of a science there. You have to know who would even buy this and what's the value to them.

Sara Nay: And now a word from our sponsor term. Again, states are proposing laws that will allow consumers to Sue businesses anywhere in the U S for not having a compliant privacy policy, any website collecting as little as an email address on a contact form should not only have a privacy policy, but also a strategy to keep it up to date. When laws change, learn more about how term mageddon can protect your business at [inaudible] dot com. Now back to the show, there's a lot that you said there that I want to dive into a bit more, but to your first point on not making it owner dependent, what if the business owner is an authority in the space? So they have a big following their consultant. Maybe they're an author that you speaking and the business is based on them. Not necessarily because they're doing all of the work, but they're the name and the face of the brand. How do you navigate something like that?

Alison Hulsof: Yeah. So that, when that happens, what we typically say to people is it's transitioning the skills, right? So how do you make the other people that work with you? The experts? So in our model specifically, we have multiple what we call partners. And I always tell people, this is your partner in auditing. This is your expert in contracting. This is your expert in QuickBooks. This is your expert in, in budgeting. And so we try so hard to shift that so that people see us. Um, and, and it's much easier to do when you haven't named your business after you. So my recommendation is if you've done that you need to start showcasing those other people. And it's a gradual transition. You start showcasing those other people as your business, versus it being showcasing you and your name. And then at that point, you're as an authority in the space, which essentially in the healthcare space, I'm a pretty good authority in the autism and healthcare space. It's getting my stamp of approval. People will go with, because I will say I would use them personally. I have used them or they're on my team.

Sara Nay: Yeah, absolutely. That's great. And then the second point that you mentioned there was having systems and processes documented running well. And so are there some examples of like core systems that someone should be focused on documenting?

Alison Hulsof: Yeah. So there are a few systems you have to pay great attention to your onboarding systems, your HR systems, right? Your HR has to be solid because every business runs on employees. If you have no employees at all, and you don't really have a business, right? You have a product. And so you have to have an onboarding strategy that brings people in. So it, it brings the best candidates to the table, but then you get them hired. You can expedite that hiring process and onboard them so that they come in and there's not a lot of downtime learning your systems, right? You train them adequately and bring them up to speed. So they can deliver that quality of service that you want to put out there. So HR is really important. And so we tell everybody, when you look at your business, look at each segment and the next one would be your financial segment, right?

Alison Hulsof: You want to make sure that there are systems and processes for ensuring that you're bringing in the volume that needs to be brought in, and that your expenses are staying in check and that there are some checks and balances. So it's not left just solely on the owner to manage those expenses. Oftentimes because otherwise those become the messiest business because the business owners don't want to sit in QuickBooks all day long and then looking at the quality part, right? Servicing your clients and delivering whatever product and service you're delivering and ensuring that there are systems and processes and how you do that. So clients know what they can expect from you. If we think about it from a consulting perspective, we need to be able to tell our clients, here's what we provide for you as a service. And here's the outcome that you can expect. And then we need to have some sort of metric in place to ensure that we are actually doing what we say we're doing.

Sara Nay: Yeah, absolutely. So some people will say, someone has these processes in place. They've worked on this stuff. They're ready to sell. They're getting, they're looking at, how do I determine now the value of my business? Do you have any insight on that?

Alison Hulsof: Yep. So in the healthcare service industry, we focus on EBITDA earnings before interest amortization taxes. And so we are thinking about really thinking about the profitability of it, because that's how it trades when I, it wa whether it's a bar, a restaurant, a consulting business, there is a lot of research on what multiples things trade at. So is it trading at a multiple of the revenue is to trading at a multiple of EBITDA. Is it trading at a multiple of what is it? And so what I think it's what I would strongly encourage people is to do the research and look, and figure out what typically does a business like mine trade for, and where do those values come from? And there are a million sites out there that'll be like, evaluate your business. And part of it is just knowing the industry. I remember when I first started my consulting business, I had an offer very early on from an investor that said, Hey, we want to buy your consulting business for two and a half million dollars. And I was like, we're not even generating two and a half million. That's silly. And so I did my research and I was like, consulting businesses are hard if you built them based on you to sell for that type of value. So we switched our strategy. We built a management service agency. So we have multiple partners. So it's not based on just my expertise, but those businesses traded a much higher multiple. So I changed my business early on. So I'm building something that brings more value later. Yeah,

Sara Nay: Absolutely smart. And I believe you have training around some of these topics available on your website, is that correct? And if so, where can people access them?

Alison Hulsof: Absolutely. So our website is www dot OB. Okay. You can also just type in www dot [inaudible] dot com and you can jump right on to our calendar and set up a call. And there's not a whole lot of those questions. We wouldn't answer for you. We have opportunities to get a budget template, KPI templates. You can also email me directly. My email is on the website and we can send out, we have some evaluation tools that will help you determine if you're building businesses sellable. And if it is not, it'll help you target in. Do you need to be paying attention to the finance? Do you need to be paying attention to your client and your services that you're delivering? It also has a component of that. Emotionally tells you, should you sell your business? Are you ready? And what do you do on the other side of it? Because I'm telling you from personal experience growing and selling, there's a way there, right? You're like, oh, my business was my life now. What? So I think it's good to know. What do you want to do on the other side of the cell? And there's a great questionnaire that can walk you through that and then give you some ideas of even what that looks like.

Sara Nay: Love it. I never, I hadn't thought too much about the emotional side of actually selling, but I think that's a really great point. You built something you're passionate about and then it's, then you're, then you're ultimately done and it's what's next in life. So that's huge. Awesome. Thank you, Alison so much for sharing. I really enjoyed speaking with you. We'll include some links that you mentioned in our blog post as well. And thank you all for listening to the agency spark podcast guy.

Speaker 2: [inaudible].


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