Stop Your Consulting Business From Owning You

What if the real risk in your consulting business isn’t failing? It’s building something that quietly owns you? Jonathan Bennett knows what it’s like to carry that weight. Long days, payroll responsibility, government funded clients that can freeze overnight, a growing team depending on your decisions. Well, he scaled his firm past seven figures, he built a team of 13, and he created productized services that ran without him in the room. But along the way, he faced hiring mistakes that cost him painful layoffs during a funding shutdown, and the sobering realization that security is often an illusion, whether you’re in corporate or on your own.

In this episode, you’re going to discover how to stress test your consulting firm before it breaks; how to scale without overexposing yourself to risk; and how to structure an exit that protects both your finances and your identity. If you’re carrying the pressure of growth and wondering how exposed you really are, this conversation will force you to think differently about stability, control, and what you’re actually building.

In this episode you will learn:

• How to stress-test your consulting firm before it breaks.

• The illusion of security in corporate roles versus entrepreneurship.

• The partnership mistake to avoid and what to do instead.

• How to scale with a team without overexposing your business to risk.

• How productized services create predictable, scalable revenue.

• How to structure and navigate an exit that protects your finances and identity.

Welcome to the Consulting Success podcast. I’m your host Michael Zipursky, and in this podcast, we’re going to dive deep into the world of elite consultants where you’re going to learn the strategies, tactics and mindset to grow a highly profitable and successful consulting business.

Before we dive into today’s episode. Are you ready to grow and take your consulting business to the next level? Many of the clients that we work with started as podcast listeners just like you, and a consistent theme they have shared with us is that they wished they had reached out sooner about our Clarity Coaching Program rather than waiting for that perfect time. If you’re interested in learning more about how we help consultants just like you, we’re offering a free, no pressure growth session call. On this call, we’re going to dive deep into your goals, challenges and situation and outline a plan that is tailor made just for you. We will also help you identify where you may be making costly and time consuming mistakes to ensure you’re benefiting from the proven methods and strategies to grow your consulting business. 

So don’t wait years to find clarity. If you’re committed and serious about reaching a new level of success in your consulting business, go ahead and schedule your free growth session. Get in touch today. Just visit Consulting Success – Grow to book your free call today.

Jonathan Bennett is an empathetic advisor, strategist, and mentor for new, emerging, and experienced organizational leaders. As a founder, entrepreneur, longtime board director, and former C-Suite executive, he built and sold a B Corp management consulting firm. He now provides experience-based strategy, trusted counsel for complex issues, and professional mentorship for delegation, performance, and imposter syndrome. His goal is to share calm confidence and an optimistic perspective, knowing there is always a way through. Hear him in action: clearlythen.com/privatepod

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Hey Jonathan, welcome.

Hey Michael, it’s great to be here.

Yeah. Excited to have this conversation with you today. I enjoyed our previous conversation. So this is going to be, I think, a lot of fun. And where I thought we could start off was going back to the beginning, you know, the moment that you decided to start your previous company at Laridae. What were you running toward or, you know, away from when you decided to start that business?

Oh, what a great question. Both of those forces were in play for sure. So, I was on the senior team of a really large regional hospital. I was the Head of Communications, like Chief Communications Officer and Director of Planning. I had a whole bunch of things under my portfolio at various points. And it had been an amazing experience. I sort of like to describe it as three free MBAs. We built a new hospital while I was there. So there was this massive capital project and there was a lot of government relations, a lot of really complex media and communications stuff. But I got sort of increasingly dragged into operations and so I just, I learned just so much. And it was also exhausting, like 12 plus hour days. I was there, you know, often, you know, with doctors before rounds and then I would be staggering out of there after the last of the audit and finance committee members, you know, would be leaving at whatever, 10:30 or something at night. And of course they were always open and so you’re on call and all that kind of stuff. So I was exhausted.

And on the personal side, growing young family, my eldest kid is autistic, and so I wasn’t the kind of dad that I needed to be. I wasn’t present enough, I wasn’t around enough. Hospitals always feel urgent. There’s sort of a tyranny of the important and urgent that exists there. And so everything feels more important. And I never forget one time we were staying over at the in-laws and I can’t remember why, but it was like we were there overnight for some reason. And I had to leave first thing in the morning and I was sort of creeping out before everybody was up. And my father-in-law, who is a retired judge and has a way about him, and he saw me leaving, he was coming out, I guess in the morning and he looked at me and he said, “Ah, yes, the guilty pleasure of work.” And I thought, “Oh, that really stung. Really, really stung.” Because there was something about me, you know, sneaking away and prioritizing, frankly, the wrong thing.

So I had been overwhelmed, pretty exhausted. And on the plus side, I wanted to design something that was for me and something that was an expression of the things that I really cared about. And I felt that the consultants that I had worked with, both in healthcare and also previously in community based health and social services and other nonprofit, really hadn’t served the organizations that I had been an executive and been working inside of, very well. It was off the side of their desk. They didn’t have any subject matter expertise. They’d never really worked inside nonprofits. And so at the time, anyway, I felt it was a very underserved sector and, and I really thought it needed a consultant that could do that kind of work. So I quit. Everybody thought I was mad, but I quit and hung out a shingle under the vague, you know, auspices of “How hard could this be?”

So before we move forward in that conversation, I want to go back to, you know, that realization of that moment when everything kind of crashed together. You decided that you wouldn’t continue the way that you had been going for, you know, for so long. Whether somebody right now is in a similar position, meaning they’re, you know, they work in an organization, they’re looking to strike out on their own, but also frankly, somebody who’s running their own consulting business, but maybe things aren’t going the way that they would, you know, would really like them to go. You, you at that moment, I would imagine one of the factors, and correct me if I’m wrong on this, is, you know, you have a “stable income”, you know, air quotes, “stable income”. We all have heard stories about how things like that aren’t that stable in some cases. But you had what a lot of people would feel is quite stable. And with a young family, there’s some risk involved in making that leap. What was the thought process? How did you work through? How did you kind of come to terms or just decide this is, this is the time I need to do it?

I was on that senior team for six, seven years, and every single person I served with got fired except me. And that’s because I quit. And I was not special. My number would have come up eventually. And I think that there’s a kind of myth of security in many, many corporate roles, notwithstanding the current financial set of like, sort of, you know, global sort of circumstances that we’re currently in. I think just in general, there’s this sort of myth that somehow you’re safe with a corporate job. I don’t believe it at all. I’ve never felt safer. So I went out on my own more than 15 years ago. I have paid myself every two weeks ever since. No one can ever fire me. And that feels more secure. And I am in control of all of the things that are in my life. And other risks, you bet, right? Like, I could get sick. Any number of things could happen. And yet to think that somehow inside some sort of larger corporate structure, those same risks or different, you know, similarly catastrophic risks are, you know, I’m not somehow as sharp, I think is wrong, frankly.

[07:25] – Who Should Start a Consulting Business?

Do you believe that anyone can be an entrepreneur and start their own business?

No, probably not, if I’m to be really honest with you. There’s a lot of boosterism that goes on around the topic. And I actually think that we saw the dangers of it during the pandemic where people decided they wanted to hang out their own shingle and, you know, all that kind of stuff. And many of those folks went back and quote, unquote, “got jobs”. So I think what’s sitting underneath it is a level of expertise, deep expertise, a risk appetite that you can and will make things happen. There are a lot of people that even when they’re given the tools and the know-how, the self-motivation is just not there in their personality. It’s almost like my friend Tara says, like, “Sometimes the orientation just isn’t there.” And I, I think that can be true. People can be an amazing team member and an amazing, like, participant with larger organizations and/or even smaller organizations. But when you’re on the nut, like, you have to-

Yeah, no, I’m very aligned with that. For sure. I believe that potentially anyone can become an entrepreneur, but not everyone really wants to or is prepared to do what is necessary to be successful. And you know, your earlier point about stability, I mean, that’s been my experience. I mean, I’ve never really had a quote unquote “job”. I’ve worked in some different organizations, but I’ve always, even from the time I left high school, went to university or college at that time first, I had businesses going on. And I’ve just always found that there really is so much more security in having a business, as long as this kind of comes to what we’re both referring to, as long as you’re prepared to put in the work and to not give up and to figure things out, then you become the master of your, you know, your own destiny. So, all right, let’s keep going in your journey. 12, 18 months in, so you start Laridae. What, this is going back now I know a little while, what didn’t go the way that you thought that it would? Did anything break? Did anything kind of just smack you on the forehead? Like, wow, this.

[09:55] – The Partnership Mistake to Avoid

Yeah, yeah. So I started the company myself, but then very quickly took on a partner. And we had worked together previously, an awesome person, and we fell back into our previous kind of roles. And so I was like more experienced than she was. And so I would sell the work and she would grind out a lot of the work and there was just a misalignment. I didn’t want to be her boss anymore. And just for whatever reason, the dynamics in our lives at the time, we just couldn’t figure our way through. So I bought her out, and it was hard. It was a very difficult conversation. And we were friends and then suddenly we weren’t friends anymore. We’ve subsequently reconnected. We’re no longer friends, but we’re also not- like we’ve healed, but it’s sad.

What would you have done differently? Like knowing what you know now and have gone through that. And I can certainly speak to this because, I mean, many people know my co-founder at Consulting Success and even in several other businesses in the past has been my cousin or is my cousin Sam. And so we’ve navigated many of these types of conversations, you know, challenges, and work through them. So I can certainly share some of the things that we’ve done. But I’m very interested to know what would you have done differently, just having kind of gone through that experience.

Just don’t give up equity there, folks. Like I would have just hired her. We had an employee-employer relationship, but I had it in my head that I wanted this sort of equitable partnership based approach to it. And it wasn’t really until later that I started to, you know, hire employees and scale up when I realized, “Oh my goodness, I made a really pretty, a pretty-” Now the good news is the company wasn’t worth anything so it wasn’t like- it was a bit of a paper transaction at the time. So it wasn’t a financial sort of hardship, but it was an emotional one and it was a bit of an ‘own goal’.

It’s interesting how so often people default to the belief that equity is what will solve the problem or somehow be the right thing. But there’s so many other ways to incentivize people or to get alignment. Yeah. And just to add to that, so from my experience, in addition to what you just referred to on the equity piece is also just making sure that you have a very clear partnership agreement and that you’ve actually not just had conversations, because people remember things differently, but you actually put things down on paper around, you know, what are your rules, what happens if this happens and just that scenario planning. These are the things that you often feel, “No, we have a good relationship, we don’t need to do this, we’re going to be fine.” But you’re fine until you’re not fine. And then that’s where things can get messy if you don’t, or if you haven’t had kind of, or put in that work in advance. So I think it’s a good topic to- I’m glad you brought it up. When did you realize, Jonathan, that the business that you were building was going to be much bigger than just you or just your name? I mean, did you start Laridae as Laridae or was it-

[12:54] – How Bigger Contracts Forced Team Growth

I had a vague notion, but it was very vague, very fuzzy, that maybe this could be a thing. Couldn’t have told you what that meant or what it was really. I think I just thought I would go and hustle some contracts and, you know, try and piece together some work. I was doing a lot of strategic planning at the time and so I sort of started to gather and about a year and a half, in two years in, I won a series of contracts that were much too big for me to do. And they were exciting and juicy and hard and financially quite lucrative, and I looked around and who was in my kind of orbit and there was a young woman that was just an awesome consultant and would have been just perfect for this. And I thought, “I think this is it. Like, I think that this is how I do this.” And so I made the proposition. I said, “Listen, do you want a job?” She was freelancing at the time between things, and so we had worked a little bit on a few things. And so she came and joined me as kind of employee number one, as it were. And I just reinvested the margin of those big jobs over the course of that year into growth.

And so did I get it right? Not really, Michael. Not at the start, no. I made some fabulous mistakes along the way. I hired too quickly, I hired the wrong people. I won too much work and needed people, and then I didn’t have enough work. And, you know, and so it goes on. But I got better at it over time as I started to systematize the product offerings and the services that we had, and as they started to take a kind of shape and as there was a way to create them in a repeatable, teachable way, then the company started to get sturdier.

So back to the projects, these very lucrative projects that you won, you didn’t have the ability to deliver on them yourself, as, as you mentioned. So that’s where that first hire came from. So that kind of begs the question, how did you win the business that you couldn’t necessarily deliver? Like, did you build a proposal based on having a team? Why would somebody, why would an organization say ‘yes’ to a lucrative contract if some- like, there’s some magic in what you did there. And I’m wondering, what was that magic?

Okay, so there was magic and I got lucky. So, and there was- it was a- Oh, look, I don’t want to get all detaily, but basically it was a series of things that were happening across the province in multiple jurisdictions. And I bid on one job inside one jurisdiction, and I won that. And they were finding it hard to find the right kinds of consultants that had the kinds of skills that I had in other jurisdictions. And so they started to say, “Would you be able to do that one too?” And “Would you be able to do that one too?” And so I was just sort of like saying, “Oh my goodness, like, wow, like, you know, yes!” So I sort of hungrily said ‘yes’ to three, which meant I was serving half of Ontario in doing this multi-stakeholder, very complicated management consulting project. And I knew as soon as I said ‘yes’ to the third one, I thought, I’m cooked, like literally couldn’t project manage my way through this. Even if I wanted to, I couldn’t. And so that’s when I knew I needed to add somebody. So the first one was very formally bid and I won it in a very formal way and the others ones just almost like add-ons. And so that was the luck part of it.

That context is helpful, so I appreciate you sharing that. And then as you kind of move forward at what revenue level or team size did things start feeling different? I mean was there a point where you kind of woke up and felt like, “Wow, I built something that doesn’t really feel- like something’s changed, it’s not the same as it was before”?

[16:57] – The Scaling Breakthrough Beyond the Founder

I think these are great questions. Nobody really asks the ‘under the hood’ questions. So I really appreciate- Sorry, sorry for thinking before talking.

Take all the time you need, yeah.

I suppose the first thing I noticed was when I could make money and not be in the room, that was the first thing that happened. I taught people to do what I did and then could either sell the work with them and sort of do a bit of a handoff or I could then tell, teach them how to sell it. And so as the company grew in the first three or four years, I remember quite distinctly like giving high fives to people that had gone bid on something, pitched it, won it, delivered it, and like I had nothing, I didn’t even know the client. And that was the first sort of like sense that, oh yeah, this thing is starting to scale a bit, it’s starting to get some lift. And then of course, you know, the margin starts to elevate on all of that. I should, you know, just for people listening in who understand this stuff, I did have an employee base. I didn’t use subcontractors. So by, I mean we had a few, but like by and large I had employees. And one of the things that we were trying to build, we were B Corp, Laridae. It still is a B Corp. And so we really had an employee based culture, a very team based culture, lots of cross training. Everybody knew how to do lots of everything at the time. And so it was quite sturdy even though we weren’t super big.

What did the company get to in terms of peak employee count? How many people were there?

Well, right before I sold it there were 13. And you know we’re sort of like over a million and it was, and we had a building, like we bought a building along the way and so, you know, like there was just, there was like a good amount of activity. It was too big that we couldn’t, I couldn’t get my arms around it anymore. It didn’t, I didn’t really like- And we built out a couple of different, you know, products basically at that point we did middle management training as well as some strategy related work. And it’s continued to evolve after, you know, I sold it more than four years ago now. So-

Right. You mentioned Jonathan earlier about, early on you, you made some mistakes or lessons learned around hiring people or firing people or which projects to take on, what not to take on. Like just that whole balance of, you know, HR and capacity delivery. If you were to try and kind of summarize that, what were the few things that stand out to you? Maybe one or two things that really feel like doing this made a significant difference. And was it productizing offers? Was it a certain approach to hiring that really helped? What kind of stands out as some of the really most impactful decisions or shifts you made?

[19:59] – Productized Services for Predictable Revenue

Productizing offers was probably the strongest thing that we did in terms of creating predictable revenue and allowing the ability for more than just me and, or the next person like to be able to deliver it. So for sure that.

And what did that look like? You just walk us through, like what was the offer before and then what did it look like when it was productized?

Oh, well, we just sort of refined a way of doing strategic planning for nonprofits that had a very- It felt bespoke to our clients. Sorry if any clients are listening to this, but actually we delivered pretty much the same thing every single time. And so like right down to the consultants would make the same jokes as I would make. Like we’d scripted basically everything at every step of the way. So you didn’t need a very outsized level of expertise to be able to do a lot of the mechanics of it. Now we had some key people that were delivering the hardest parts of it, which is usually with the board of directors, but mostly we could teach people how to deliver it. So that was important.

The second thing we did is we created a middle management training program. And I have a very good friend, actually she’s in Vancouver, who delivers one quite similar. And she came and she taught us how to do hers. And then we just took it and evolved it over time and created our own version of it. And so that was also like a very productized delivery, very successful. And that’s the key service now that they deliver. They’re really not doing much strategy work anymore, as we had done back then. So it’s interesting to see how companies completely evolve.

Just to answer the other part, thinking that I could train pretty much anybody that was smart enough to do this stuff – bad mistake. Not following formal HR processes and hiring people that I just ran into in the community that seemed really cool and I was pretty sure would be great – bad. I really became a fan of more formal human resources systems as I’d been very familiar with earlier in my career. Obviously in hospital, the union we had four unions, right? So it’s not like, you know, I didn’t understand how to do it. I just thought I was special and somehow I could pick them. And guess what? No, I couldn’t. I had as many hits as I had misses. And the misses, the hits were great, but the misses were really hard as well. I kind of blew up a few quasi friendships and, you know, because I had to let people go, we didn’t have enough work and/or they just actually weren’t that good.

[22:35] – Hiring Systems That Improve Consulting Teams

Can you just go a little bit deeper on that? Like, what’s an example of maybe something that you overlooked or just bypassed because you kept a little bit more free flowing as opposed to actually staying more regimented with an HR process?

I think when you’re more removed and you’re sitting back and you’ve got a scoring matrix and there’s two or three people around a table and you’re listening to the answers and you’ve really thought about what this person is going to do, how they’re going to be great at their job when they come in and you’re not making a single decision. That’s sort of a handshake over a coffee. When you’re doing that, your colleagues will see different things than you will, and through a sort of shared collaboration, you can make a better decision. And then also more importantly, the collective ownership of that hire is a bit more dispersed. So it’s not all on you. Like when you hire somebody, you’re putting your hand out and they’re shaking your hand, and that is a kind of bond that happens. And when you’re the owner, everything is on you. And when I learned to allow my colleagues to have a piece of that, then the loyalty was more dispersed and, and the accountability was more dispersed. And so it just worked better. And we picked, frankly, just picked better employees as things went on, because we had, frankly, appropriate and fairer human resources practices and recruitment practices.

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Was there a time that you kind of remember where you as leadership wanted- you were clear on the strategy, you knew what you wanted the company and the team to do, but execution just wasn’t matching the level of, let’s say progress or reaching the milestones. Like is that something that you encountered where, again you were clear on the strategy, you knew what the goal was, but the team maybe wasn’t able to deliver? And I’m asking this question, Jonathan, because I think entrepreneurs oftentimes are like, we’re not the best at waiting or having patience. We come up with a lot of ideas, we want those people to implement on those ideas. And so I just wonder if that’s something that you also dealt with as you were building that business.

[26:23] – Why Saying ‘No’ Protects Profit Margins

I feel like we made some inroads into areas of consulting that we ended up getting out of. And did we burn a lot of time and energy in designing things that we then didn’t repeat a lot? Yes, we did some rebrands, we did like, you know, like I had a background in comms, so I’d like, I redesigned hospital brands and renamed things, right? And so I’m like, “Well, I can do that.” And so we got into that and we did some really amazing work and I don’t think we made a cent on it. The top line was great, but the bottom line was trashy because it took us way longer to do in a good way. So I think we probably were slow to get out of some things. You know, we’re always good at saying ‘yes’ when we’re still growing, right? We just like every new win feels like a win and you’re just not focused enough and saying ‘no’ is really important. And I don’t think that we said ‘no’ soon enough.

But as we got more mature, like for example that I was telling you about there when we were sort of doing the middle management training, we put a ton of work into deciding what it was that we wanted to invest in in terms of a new product. Like, it took us almost a year and we had lots of ideas and we narrowed it and we narrowed it and we narrowed it, narrowed it. And then we decided this is why we’re going to do. We did some market testing and we pre-sold some things and then, and then we had somebody come teach us how to do theirs. Very generous, by the way, if she’s listening. And that was an incredible, like, process that did actually work.

Were there times when – and you kind of like hinted at this, but I want to just see if we can go a little bit deeper on this topic – where you feel like, you know, you made decisions based on your gut instinct? Maybe you didn’t have all the data to back it up, but you felt that it was the right thing to do and maybe the decision turned out not to necessarily achieve what you wanted. Like is, is there anything again, just as you look back on that time, that stands out to you?

[28:31] – The Growth Mistake That Led to Layoffs

The biggest mistake I made along the way, the one that sort of had the hardest effect on my own heart and my own sense of self, is there were a couple of years there where we felt like we couldn’t miss. We were just growing and growing and adding people. And it was, just, frankly, it felt easy. It felt like if I added people, I could just win the work and I could teach them how to do it and we would be growing. And we were heavily reliant on organizations that were funded provincially. And so this might sound dead obvious to anybody out there, but I can tell you when I was in the middle of it, it didn’t occur to me. We were coming up to what at the time was a pretty obvious change in government coming. And so six months out from the election, the bureaucrats just froze their spending and our clients also went into shock because they didn’t know they’d only had one kind of government for a very long time and they didn’t know what the potential new government would mean.

And so probably a year of very few contracts came out of the sector and it’ll pick back up. But unfortunately it was the proverbial trying to hold the plane and feed it. And so I waited until I absolutely had to, but then had to let quite a few people go. And it was awful. It was absolutely devastating to me. I felt like I had made those people- and I had made them personal promises. They’d, you know, like, joined their careers to the company that I had founded. So it was really, really personal. And look, the company recovered just fine. You know, we corrected and that was great. And all of those people have gone on to do amazing things, some of them in competition, frankly, but, you know, so be it. Like, like that was all fine, but I hated that part of that journey. It was awful.

I think it’s a good reminder for everyone who’s joining us to do what oftentimes, you know, business owners don’t do, which is to kind of stress test their business to look at where are the risks? You know, do you have too much client concentration? Is there too much industry concentration? Is there- Like, what could go wrong? And I know so many business owners are optimists, so that’s sometimes hard to do because we tend to think positively. “No, it’s not going to happen. We’re fine. We’re going to keep riding it.” But even if it doesn’t happen, just taking the time to do some scenario planning, have some discussions, make some notes, the fact that you, you and ideally some of your team members have talked through some of that, I think makes the business so much stronger going forward.

As you shared Jonathan, you sold that business. And I want to talk more, more about that. But leading up to it, I mean, what was the moment or when did you realize that you were kind of questioning? And I guess I don’t want to put words into your mouth, but was there a time when, where you started to question what’s the future? So this is before maybe you even decide to sell the business, but as you were building it, things were going well up, down, but you know, this is great progress being made. Was there a moment where you started to actually think to yourself, is this what I want to be doing long term? Or maybe there’s a different thought that came into your mind. But can you just kind of walk us through what that may have looked like for you?

[31:56] – Knowing When It Is Time to Exit

I think I hit a point where I just got a little bored. The company had grown to a point that I think unless we were going to move into acquiring some other companies and really try to like, blast from 13 to 60, I don’t think I had at the time the stomach for it. And, also I had sort of at that point recovered from those layoffs and had built it around like, and I was sort of like, we were back, we were back to a good place and I was finally feeling calm again about it all. But I was also getting a bit bored of actually the delivery. I still delivered some work like at the top end, like the, the kind of, the, the gold kind of plated clients, you know, I would still deliver those ones. And like, I was just bored of my own jokes. I was just like, not excited. And I- that’s deadly. Like if you’re- you know, you miss stuff. And I knew it. I was completely aware that I was starting to get a bit bored. And, I trained lots and lots of people and they were pretty good. And so all of these things were starting to float around.

And I was away with my wife. We went to Dublin, Ireland, and we were walking through the streets, and I just sort of said of – you know what, sometimes you kind of got that vacation immunity, you know, when you’re, you’re just dreaming – and I sort of said, “You know, I think I might be starting to get kind of maybe done.” And Wendy just looked at me and she said, “Well, you probably need a plan because you can’t give two weeks notice.” Yeah. I was like, oh my God, you know, she’s so right. And that’s when I realized that, and you know, not to sort of skip ahead before your next question maybe, but like, that’s when I realized like, I did have somebody that I would in, in the back of, very back of my mind who I thought was probably going to take the company through its next iteration. So when I got back, I decided to start the conversation with her.

Walk me through again going back to that time. Did you consider different possibilities? For example, maybe just change your role in the company, keep the company in terms of your ownership, but just bring in a CEO, right? Somebody to lead it? Just, yeah. Did you, did you explore different ways or different paths you could take or were you very clear, “I know I want to sell the business.”

I had had some offers, one interesting one and then, and then a roll up, you know a number of companies would come along and do a roll up and then we’d all own a piece of the umbrella. And neither felt right at the time for various reasons, so I kind of ducked both of those. I think by the time I got to having the conversation with Danielle, I think I was actually just ready for some new thing myself. Like I think it was mostly I expressed myself for 10 years in this way and I am ready to turn a new page personally. And so I mostly wanted to sell it because I actually wanted to be forced to let go completely and to just rediscover myself and you know, as hokey as it sort of sounds like I sort of felt like I was ready for the next act.

Whatever you’re able and you know, able to share and want to share. Can you walk through what the exit looks like? Can you just, just describe as much as you know, details you can. How was that structured? What was the timeline like?

[35:33] – How to Structure a Consulting Firm Exit

Yeah, I’m happy to give you a bit of a high level- Like obviously I haven’t had a conversation with her to sort of let me talk about everything but like what I can say is that we had a conversation. I sort of said I wasn’t quite ready and she certainly wasn’t quite ready. And so I sort of said, “Look, what about if I step down as CEO? You step up as CEO?”

Sorry, what was her role in the company at that time?

She was like a VP of Consulting, I think. I can’t remember her title but she was- basically, there were two VPs and, and I said, “What if, what if you step up as CEO? We’ll announce it and we’ll just call me founder or something and shuffle me off to the side and just throw a bunch of work on my back and I’ll just carry it up the hill for the next year. You run the company, we’ll tell everybody that you’re it and I’ll stay out of your way, I promise. And I will just go do a bunch of work to keep the money rolling in and we’ll prove both that a) you want to do this, that you feel ready and also make sure the clients aren’t going to run away.”

So that was how we went about it and it took – the pandemic happened – so it took about 18 months from start to finish and then- so that was sort of like how the optics of it, it was sort of a, a sort of like a smooth transition where I was sort of, you know, like- and it was funny, like, I don’t mind telling you, Michael, like, like the staff knew right away that we were for real, Right. And like six months in, I could barely get a meeting around the place. Like, everybody was so orientated towards her. And it was very humbling, I don’t mind telling you. You know, it was like, “Hi, I still own it, I still work here.” But it felt like nobody was caring what I thought anymore because I was kind of yesterday’s news.

So, you know, there were little signals like that that told me, you know what? I think this is going to be just fine. She’s an awesome leader and a really charismatic person. Right. So then, we just moved into kind of the sort of the transactional part of it. So it was, you know, like a management buyout basically. And we structured it as a loan, and a bunch of other things. They sold the building, so there were a bunch of moving pieces, but I owned 100% of the company and now she owns 100% of the company, as far as I know.

Okay, so just to kind of recap that, that first, what you initially planned, 12 months became 18 months. You still had a hundred percent control of the company, but you together decided she would essentially assume the CEO leadership role. You still worked at the company. You were doing the work, helping with the business. Six months or so onto that, I mean, things are already going quite smooth. And then after 18 months you both came together and decided, “Yes, let’s, let’s proceed with this.” And that was, that’s when the transaction began. And that transaction, without going to all the details, just really had her purchasing your shares, right? Purchasing the company from you with some terms that allowed payments to be made over a period of time you both agreed to with maybe some interest tacked on, whatever it was. But that worked for both of you?

Yeah, it was it. That’s how we did it. Yeah.

Was there any, again, just sharing what you’re able to and comfortable sharing, was there any protection for- what if payments are not able to be made or the company runs into a hard time during while you know, you’re being paid out for whatever the agreed price? Was there anything like that to kind of protect you?

Yeah, I got paid right up front.

That solved that one. Another question for you on this. Oftentimes, you know, you hear that founders that leave companies that they’ve created, I mean, it’s like, it’s like been their baby and now they’re no longer working in it. Did you have any of that, Jonathan, in terms of you wake up that day after the transaction is closed, wondering like,”What do I do now?” Or how did you deal with that? Did you have time to prepare? Just walk us through that experience.

[39:27] – The Emotional Reality of Selling Your Business

Well, this is one of my very favorite topics, Michael. Here’s what I think most founders- when you’re inside a company, you know in the back of your mind, or maybe at the front of your mind, you’re thinking about the exit and getting paid. That is not the work. The lawyers and the accountants totally know and the bankers, they figure it out. It’s either going to happen or it’s not going to happen or whatever – the thing, it’s fine. It’s the emotional grieving work, that it has been a sense of your identity, it’s been a sense of your own self expression,and now you’re handing that over to somebody else, to something else, to whatever’s happening, whether it’s private equity or whether it’s like, you know, you’re an employee buyout or whatever it’s going on, you have some emotional labor to do and it takes way longer than you think it’s going to. And I, you know, I feel like I was pretty attuned to it and it was still way bigger than I had imagined. And I distracted myself at the start by starting something new. I started a new company and with a different set of criteria around how I wanted to run my life going forward. But I mourned it. I had- because of course she changed it and you know, as she should and she’s done incredible cool things with it and, but none of those were the things that I had in mind for it. And so you’re not just selling it, you’re selling the control and that’s a hard thing to just walk away from when it’s been really like an act of self expression.

With reflection on that whole experience, is there anything that you would have done differently?

I consider myself very lucky. The ability to sell a consulting company, a small one, is very hard. And I think the fact that I was able to do it, as emotionally dense as that period of time was in my life, who cares? I think I was very, very fortunate and to have found somebody that could carry it on in the spirit that I had founded it in and take it to new and different places, that’s just a beautiful thing. But the, you know, just the fact of getting an exit feels really pretty special. And I’m fully aware of that, of how, of how difficult they are to sell.

So final question before we wrap up here. Is there a piece of conventional wisdom in business that over time you’ve learned that you actually disagree with?

[42:10] – Why Relationships Drive Long Term Consulting Growth

I find myself railing against the transactional nature of a lot of orientation to business. I have a way of doing work, like to put it in sort of, you know, MBA terms: lifetime client value is everything to me. And I’ve got clients that I still work with to this day that I have known for 20 years in various ways. And, you know, like, networks and relationships are everything. And so I am not transactional. When I do consulting work, I give away a lot of stuff for free. And there’s a lot of people on the Internet, “Charge what you’re worth, don’t get taken advantage of!” And I completely understand, especially from an EDI lens and all this sorts of things, why those folks are saying those things. And I know that my truth is that if I show up for you and I do really, really good work and I do you a solid for an hour, you will come back again and again and again and again and again, and you’ll send me your friends and you’ll send me other people that have got similar issues and problems as you do.

And that is how I have built a- my business like my current company, I’ve been at it for four years now. People don’t understand how it works. I get the inbound marketing thing like everybody else does, but it’s founded on 20 years of relationships. And it just looks like it’s inbound, but it’s not. It’s heavily curated through a series of very intentional efforts on my part. And I think that’s really hidden from a lot of new consultants especially. It looks very- They’re all about, you know, differentiating and doing all this stuff and yeah, look, yeah, that stuff’s important. But I think what I’ve learned is that just be there for people, be in relationship with people, and that’s why they come back.

It’s very interesting because the previous podcast, this podcast episode I just recorded was with Mooly Beeri, and he shared his belief is exactly the same thing. It’s all in relationship. Yeah. And, you know, in our current environment, everyone is trying to see results tomorrow. Instant gratification, right? They want to push a button and have a hundred leads and have their calendar filled, but in this business, it’s a relationship based business. So having a system and a way of thinking about cultivating those relationships for the long term is- really can be an advantage if you’re willing to put in the work to make it work for you.

Really is true. Yeah, I agree with your former guest as well.

Yeah. Jonathan, thank you for coming on. I want to make sure that people can learn more about you, about your current business, everything you have going on. Where’s the best place for them to go?

Yeah, so you can find me online at ClearlyThen.com. I’m really active on LinkedIn https://www.linkedin.com/in/bennettjonathan/ these days. I’m an advisor and a consultant. I do lots of coaching-like things. I help boards, I help management teams with the toughest things that they face.

All right. We will link that up in the show notes at consultingsuccess.com. Jonathan, again, thanks for coming on.

Important Links:

Jonathan’s LinkedIn
ClearlyThen Inc.
ClearlyThen Podcast
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