There is something romantic about growing a business organically, but those who have been in the trenches know how unglamorous that process can be in the day-to-day. Growth through acquisition is a far quicker and easier option if you want to grow in scale, but you also have to be very careful about the potential pitfalls. This B2B marketer’s story beautifully illustrates that point. Priscilla McKinney is no stranger to adversity, as she has seen her previous business literally burn down to the ground. Somehow, the confidence that she gained from rebuilding that business from the ashes backfired on her when she finally tried her hands on business acquisition. You are going to appreciate Priscilla’s candor in sharing what transpired in this transaction, which is a cautionary tale on the many pitfalls of M&A and a reminder of the importance of surrounding yourself with an experienced M&A team. Join in as she shares all of that in this learning-packed conversation with Domenic Rinaldi.
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Priscilla McKinney: The Bumpy Road To Growth Through Acquisition – Ep. 092
I can’t thank my guest now enough for coming on and sharing her acquisition story. Priscilla McKinney is the Owner and Founder of LiTTLE Bird Marketing, a B2B digital marketing agency. They specialize in helping people strategically build and execute an online marketing plan, and in her words, be able to put their heads on their pillow at night, knowing the marketing is working while they’re sleeping. Priscilla decided that she was going to grow her business through acquisition after receiving a call from another business owner of a similar type of agency who was interested in selling his firm to her. What transpired from there is a cautionary tale on the many pitfalls in an M&A transaction and the importance of surrounding yourself with an experienced M&A team. Priscilla shares how her diligence was not near enough, how she almost lost all of her clients one year after the acquisition, but how this acquisition has propelled her and her company to another level that might never have been achieved.
You’re probably wondering, “How could she lose almost all of the clients and still be able to say she would do the acquisition all over again?” Read this episode. I promise you, you won’t be disappointed with Priscilla’s delivery and candor about where she went wrong and what she would do differently in the future. This episode was so much fun for me because Priscilla didn’t hold back. She helped us deliver on our promise to help other entrepreneurs be smarter about their own transactions. Before we get into the episode, if you want to avoid common pitfalls and the risk of losing substantial dollars, you need to know how ready you are to buy a business. I believe proper preparation is so critical to your deal success. We have published several free resources to help you be better prepared. You can access these resources on either of our websites, SunAcquisitions.com or K2Adviser.com/resources. Being prepared is critical to ensuring that you maximize returns and minimize risks. Thank you for being here. I know you’re going to get a ton out of the episode.
Priscilla, welcome to M&A Unplugged.
Dom, thank you so much for having me. I’ve been looking forward to this. Although some of these questions are going to be excruciating, but I’m willing.
Thank you so much for being willing to be on the show. I’m so excited to talk about your growth through acquisition. You run a company for a long time. You decided to grow it through acquisition. I’m excited to dive in, learn about your process, and what you went through. I’ll be learning as my audience learn because we did not help you with that transaction. You and I are just meeting for the first time. We’ll be revealing that as we go along. Before we get there, I’d love to talk a bit about your story. You started this company back in 2009, LiTTLE Bird Marketing. I don’t even know if it was called LiTTLE Bird back then. You clearly have not had a straight path to growth. It sounds like in the little time that we’ve chatted, you had some bumps in the road. If you could share with the audience your background, what LiTTLE Bird does, how you got to now, and then we’ll dive into the acquisition that you did.
What’s pertinent to this conversation is that I did start it, and I bought small little leasehold improvements from someone. I didn’t buy a business from them. That business was called Grow Marketing. At the time, I was like, “That sounds great.” It’s a long story about how I thought that was a good idea. What happened was, in 2011, we had the only F5 tornado on record in the US. Within about 22 minutes, we lost about 35% of our town. It was devastating, as you can imagine. A lot of businesses were gone. My business was not taken in that tornado. Three weeks later, I stood on the sidewalk and watched my design studio burned to the ground. I had spent the last three weeks helping my other clients get back on their feet and helping anybody in any way you possibly could. Everybody learned, help who you can, when you can, as much as you can, for as long as you can, everything that you could possibly do. I didn’t know that three weeks later, I would be the recipient of some of that help. It was brutal.
What part of the country is this in?
This is in Joplin, Missouri.
When you first started out, were you a B2B digital marketing firm? Is that what you were doing back in the early days or has it transformed into that? Were you doing something different back then?
It has transformed into that. We were more a generic marketing firm. I realized very early on that I needed to specialize. I do have a couple of clients who are B2C, but that’s not where we live and breathe. We are in that B2B space, digital lead generation, digital transformation, influencers on social and content. That’s where we live.
By the way, I have another story with another client from many years ago, a similar situation. They rebuilt their business, and they’re doing great. Your business burns to the ground. What do you do then?
You either walk away or you double down. That’s what you do. There are two options. I love this quote, “Crisis is easy, but the day to day will wear you out.” I do think there’s a lot of truth to that. Sometimes when things are so bad, there are only two options, you stop or you go. That clarity is something you don’t get when you’re running a company on a normal basis. You’re in the middle of it. You’re in the thick of it. You’ve got a million details going on. When you’re standing in front of a building that’s burning, you’ve got two decisions in front of you. That clarity is something I lean into quite a bit. Now, if I were back in that position, “What are the very clear options that I have here?” In some ways, some of that is a gift, in retrospect, and experience. It morphed into that over time because I realized I needed to specialize. I was becoming more clear about what I wanted to do in the world, what I had to offer.
If I get what you’re saying here is, you recalibrated and you rebuilt, but you rebuilt in a different way?
You picked back up the pieces in 2011 or 2012. Does your company then become LiTTLE Bird Marketing at that point in time?
It does. It burned down on Tuesday and we picked up the pieces and signed the contract on Friday. You operate out of where you need to operate. We just had a tornado. We couldn’t even get computers. Half of our roads were blocked off. It was a real logistical nightmare, but you do what you can. Luckily, for me, everybody in the area understood because we’d been through that collectively. I wasn’t the only person going through something this devastating. There was a lot of understanding and empathy. I was able to go forward. I am thankful for that.
Kudos to you. I can’t even imagine. That could be a whole other episode about overcoming such diversity. You built back up the business and rebranded. How long do you have the business before you decide that maybe growing through acquisition is a viable path for you?
Probably about seven years. I had thought about it a little earlier. To be honest, I don’t think I knew enough about it. It was too intimidating for me. Also, I came into marketing, not with a degree in Marketing. I came into marketing with a degree in Cultural Anthropology and a lot of great elbow grease. This is where my genius lies. I’m not trying to pat myself on the back. It’s just, you have to understand what you’re good at, celebrate that, and create a business around that. I created this a little bit more, maybe by hook or by crook. It wasn’t this clear path, even for me as a career, that wasn’t clear. There are a lot of layers going on there. It took me a little longer to realize, “It’s very hard to build this business one brick at a time. It would be a lot nicer to be able to strap another wall to this business and move a little quicker.” That was my thought. At a certain scale, you get certain opportunities. That’s where my thought process was and why I started going that direction, or at least, entertaining that dream.Always bet on yourself, but be careful because success can also give you a bit of hubris. Click To Tweet
You’re bringing up such a good point. I talked to a lot of business owners every day, and organic growth has become so hard. Even hiring talent has become difficult. Beyond the talent, going out, figuring out all the new technologies, and your world, which is digital marketing, which is, “Where do you spend your dollars? Where is it going to give you the biggest return?” Organic growth has become very hard. It’s not as easy as it used to be. We espouse that growing through acquisition is a great way to grow your business and put it on steroids, especially with today’s interest rates and access to money. You decide that this is a viable path for you. What’s the first thing you do once you decided that you were going to go down this path? What’s your next step?
First of all, some of the things you just mentioned practically make me cry. Let me pull myself back together again. The first mistake that I made right here is that I am very open to risk. That’s who I am. My husband is very open to risk. I don’t have a counterpart that says, “No, you can’t do that.” I’ve never had that. I’ve always been able to dream and do. That’s been my path. Unfortunately, there are some other downsides to that. The first mistake I made was moving too quickly and thinking, “It’s a good idea. We’re doing it.” That started, in my opinion, a snowball effect that never could catch up.
Did you have a target company in mind that you wanted to acquire? How did the opportunity come your way?
Another problem is that I don’t have access to knowing who’s who in my particular industry. I suppose I do have access like, “I’m the President of the American Advertising Federation in my area. I’m connected to people. People know me.” That’s a different thing from understanding that you know their business and understand how well they’re doing. That’s a different kind of knowledge they have of people. This person came to me. It did not seem weird to me and the fact that the person who I bought the leaseholds from and improvements from when I first started, was a person who came to me and said, “I think you’d be good at this. I’m either going to sell this to you or I’m leaving and I’m closing.” I was like, “It was such a great experience for me that it didn’t faze me, that someone else would approach me and ask me.” To be perfectly honest, the way I work and the way I’ve been building this business, I don’t have time to go out and look for something, vet anybody, or ask the right questions. It’s not possible for me. This person approached me. Maybe that was another problem. However, I don’t think if I had slowed the process down, it would have been as big of a problem.
One of the things that we talk to people about when they’re contemplating an acquisition is to surround yourself with a team. Get an M&A advisor, M&A accountant, M&A attorney. Put the team together so that you can truly vet opportunities as they come your way. Did you have any team behind you that had some experience with mergers and acquisitions?
Yes. I have a great lawyer, an advisor, a CPA. People are going to look at those things for me, but this is my point. Those people are only licensed to do what you, as the owner, dictate to them to do. Is this show just going to be like, “Let me tell you all my failures?” It’s fine because I think this is so much more important. I do love reading your blogs because when you get down to the real-real, every owner, if they would be honest, there are a million things that they wish they would’ve done differently. I had people that I could have leaned on a lot harder. That’s where I was not as awakened alive to the fact that I’m bound and determined to do what I’m going to do. We’re going to find out in this, some things did not work out and some things did. At the foundation of that is that I always bet on me. That has gotten me out of so many messes, so many difficulties, and as you pointed out, a very difficult challenge. Nobody reading this would want to have gone through what I did with having to completely redo your business literally from the ground up. However, sometimes that can give you a little bit of hubris.
I could just tell by your personality that you’re going to make things work out no matter what. I appreciate you being honest with the audience. That’s what this show is all about is helping people avoid the mistakes and the pitfalls. I try to share it from my perspective, having done many transactions, but it’s completely different learning it from somebody who’s lived it. You’ve lived it. Let’s face it. You and I are both business owners. We’re entrepreneurs. Most business owners and entrepreneurs are A-type personalities. We believe we can do anything. It’s one of the reasons we’re business owners. At the same time, having the will to say, “I’m going to step back, and I need to rely on experts as I go forward.” It’s hard, but you’ll learn the longer you’re in a business that it’s the smart thing to do.
I’m going to interject there one thing. I’m not an A-Type personality. I will tell you something interesting. I’m not this detailed person. I’m not this person who is like, “I’ll just do it.” I am constantly the delegator. I’m like, “I think you could do this better. I think you could do this.” That is what is crazy and interesting to me about this experience. That beautiful part of my personality did not bear out in this experience. I do think it’s that determined. I am that solid like, “Work ethic, believe in myself. I can do this. I’ll figure it out some way.” It’s always that I’m very positive and that sometimes it’s a downside to it. That’s what’s interesting to me. I’m not an A-type and I wish, “Maybe if I had been, I would have been like, ‘Where is this?'” I was far too believing and far too trusting in the relationship that I had because I didn’t know this person. Again, I know that you’re probably already thinking, “I know the layers of problems that are already going to occur here.”
Let’s dive in. You get contacted. You start to go down the path. Tell us the story. What happens from there?
I was contacted. I do keep a busy schedule as you can imagine. I speak a lot. I happen to be at a very intense executive retreat when I was called. It was pulling me away from what I was supposed to be doing and focusing on. At this retreat, interestingly enough, was one of my advisors. She was busy doing the retreat. The interesting thing is I said, “I’ll just do this myself.” That was the wrong take. By being contacted, someone else laid down a timeline for me. I was not strong enough to stand up against that and say, “No, that timeline does not work for me. I need more time to look at this and do this.” It was very enticing, and there are a lot of fits. If I had to do it all again, I would buy it again. I would do it differently, but there are many things that were a perfect fit. It was almost like, “This is what you’ve been hoping for. This could do for you.”
How did it fit for you? What made the sense? By the way, were you contacted by the owner or somebody that was representing the owner?
No, the owner.
Why was this a fit? Was it a technology that would make sense for you? Were there people that you were going to get in the acquisition? Where was the strategic fit for you?
Yes, a couple of things. I think three things. Number one, it was the location. It was a natural expansion, just in a radius to me. Number two, it was diversification in my portfolio. I’m very heavily B2B lead gen, digital business. This one happened to be traveling tourism. Let me tell you that in 2019, that sounded wonderful. Please don’t put your COVID hat on and think, “Priscilla, what were you thinking?”
It looks great in 2019. Nobody can fault you for that.
The third thing, when you started talking at the beginning about how painful it is to hire, find the right people, and do that at scale, literally I’m in tears. There were three people, three particular positions I was looking for. One was an in-house web designer and developer, a photographer and a videographer. I was looking for those things to expand my team. Everybody else would just be extra icing on the cake, but I needed those three positions. I got two out of the three from that acquisition. It became more of an acquihire kind of situation and buying a portfolio out.
Those are all awesome reasons to be doing an acquisition. What transpires from there? It sounds like you and the other owners start having conversations. Talk to us about the process. What happens from there?
I thought I was doing a pretty good job on the process. First of all, of course, he wanted more money, then I was like, “I’m not that crazy. No, that’s not what it’s worth.”
He had a price for the business that he wanted?
Absolutely. My first indication and why I went very forcefully with him was that his price was based on what he needed for his family and to start another business. I was like, “That’s not my problem. That’s not my issue. Are you selling the business or are you not? The business has to be worth this.” Right away, I’m like, “No, I’m not even having that conversation.” By me putting my foot down and saying that, the whole conversation changed. I thought, “I don’t have to do what this guy says. I’m not that dumb.” However, you’ll see in some of these, maybe we might beg to differ in a few minutes. I did my best. That was also a red flag of going, “I don’t know that this guy understands what this business is worth.”
This is one of the underlying things that it took me a long time to realize, even maybe 8, 10 months after I had acquired it. There’s no way that guy was running this company. He lost key people along the last year that made it, where he knew it was dragging down. He was barely keeping afloat. He did not have the information, knowledge, personality, work ethic, and employer relationship. He didn’t have any of those things that he could have kept it going.
This was a sinking ship and you didn’t quite know that at the time.
The accounts and the people, those were amazing accounts but he was a sinking ship. I could have just let it play out for six months. I could have gone and picked them all up.
How did you know that it was overvalued? Did you have somebody on your team that was helping you understand how to value a business and they were guiding you through that? Do you intuitively know it?
First of all, I intuitively knew it, and then I got someone to look at it. I talked to my CPA through it. I talked to a business valuation person through it and we kept chatting about it. The interesting thing was, it was identical to my size. I would have been doubling my growth. The amount of contracts and the amount of profit was something I’m living in. That’s the soup I’m swimming at. I know those numbers just in the core of my being. When I saw a P&L with exactly my same numbers but with fewer clients in my portfolio, I have more clients, but with that same number, I knew exactly what that would be worth. I knew how much it would take to service those same types of contracts.
You start to gather information. You push back on value. Did you make an offer to that? Did you formalize an offer for the owner?
Yes, absolutely and I didn’t budge on what I offered him.
Was it a formal offer? Did you draft a letter of intent?
Yes, I had my lawyer do that. Also, it was an SBA loan. We had to jump through a lot of SBA hoops. It’s not like I could just go out there and do whatever I wanted to do. There were a lot of things. There were a lot of checks and balances that I thought would check and balance, yet there were a lot of things that got left out.
That’s a good point because when you go through the SBA, that is a natural checkpoint governor maybe on value. When you apply for an SBA loan, what people maybe don’t understand is that even after the bank underwrites the loan, it has to go outside of the bank to an independent third-party appraisal firm to get valued. If you have missed value, it’s going to get checked by a third party. They’ll come back and tell you if they think you’re overpaying. The thing they’re not doing is they’re not doing diligence as you probably very well know. They’re just looking at the numbers that are presented to them in the tax returns and in the P&Ls. It sounds like the offer that you put in front of him, you got approved by the bank. Is that right?There is almost no margin for error for small businesses. That is one of the biggest reasons why you need to grow. Click To Tweet
That’s right. The SBA evaluator was trying to make it larger, and I was like, “I can tell you now, there’s no way.” I had to fight for it. I was like, “I know this business. There’s no way that I’m paying that for it.” It’s not about what he thinks it’s worth or what the SBA evaluator thinks. It’s what it’s worth to me. Otherwise, I don’t need to be the person buying it.
You made the offer. It got accepted. How did you approach due diligence? What did you do there? What did you learn about due diligence?
This is where it gets a little bit crazy. I asked for contracts. There were a lot of interesting things that were disorganized in this business. This business had been run shorter than I had been, but I had reached my grocery seats in a shorter time. I could tell you that you know these brands. It was very attractive in that way. Those contracts, he didn’t know where the paperwork was. There wasn’t a server. I don’t even know what to say to that. The people in a design house are working all on Wi-Fi. Some of the structure doesn’t make sense. I didn’t even know to ask, “Are you all working in plugged-in?” Seriously, I didn’t have a box to check for that. To me, it’s like such a dumb no-brainer. Of course, you have people who are working on massive graphic files wired into the internet. These are the things. What you don’t know, you don’t know.
You were asking for information. It sounds like it wasn’t coming your way. It either didn’t exist or there were roadblocks. At some point in time, did you put up a red flag and go, “Something doesn’t make sense here?”
I did. What happened was I got a bunch of documentation. The due diligence that I fell down on the most. If I could just fault myself for the biggest thing, it was not combing through those contracts to a tee. On the other hand, he set up a lot of meetings, which I find interesting with existing clients who were aware that I was going to be possibly purchasing it and he was going to go on to do something else. Having meetings with people who are looking at me going, “Priscilla, we’re excited because you’ve been in business longer. You have more organizational.” He would even say to people, “You know how I’m not organized about. She’s very organized. This is a better fit.” I had a lot of face-to-face meetings with existing clients who told me.
I have to tell you, almost twenty years of doing that, that’s not typical. Usually, the buyer never meets the clients until after the closing. I can understand why that was disarming for you. It was like, “He’s willing to let me meet clients.”
It’s because of that, I didn’t and I should have. I was in the process of just starting to go through those contracts. I was like, “I won’t look through their contract. They’re right here telling me they’re staying. They can’t wait for me.”
There’s an underlying problem here. The question that begs to be asked is, you should have looked at the contracts. You met with the clients. Were those contracts not enforceable? What happened?
They were enforceable. There were a couple of them that if they gave a 30-day notice, they could get out. There were some clauses like that. On the other hand, nobody took me up on that because they had been a little bit in a state. They needed a lot of things going. They needed me to take over the helm right then. When it came to resigning, I can’t tell you how many times I had this conversation, “Priscilla, this has been so wonderful with you. I cannot believe that this has solved this and this. It’s been too much drama. We need to move on.” I know you could look at that and think, “Why is this person coming on the show and being willing to say that?” You think if you did a great job, of course, they’d keep you on.
Unfortunately, what I didn’t know was that things had been going south for so long that people had already started making some plans of moving. I’m not joking when I say some people said to me, “I love you so much. I’m not saying no forever. My boss, this person, this guy screwed many things up. There are many empty promises at this point that we have to go a different way, try and get a breath of fresh air, and start over.”
None of your clients hinted that to you when you met with them?
In-person and some of them who I knew through other people. I don’t live in Chicago. I live in a much smaller town and a community. I don’t sit here and get myself hard. I don’t lie down and cry about it. It is what it is. I certainly am not someone who is going to beat myself up on it. You know what you know, and you do the best that you can. I do think talking about these errors is so helpful to other owners and to me.
What do you think you could have done differently to avoid the mass exodus? Was it 50% of the clients that left? Was it 20%? What was the order of magnitude here?
By the end of the year, you’re getting pretty close to 100%.
Did you lose almost 100% of the clients?
Yes. On the other hand, let me tell you why it worked out for me. Part of the gravitas of getting those accounts and having those people and that momentum did secure us a lot of big, new other clients. Also, those acquihires were so key for me. I had what you could call, without it being official, a waiting list for LiTTLE Bird Marketing. We did not have the capacity. We had such a good reputation. We still do. I’m someone who just told you everything I did wrong. Let me tell you all the things I did right. LiTTLE Bird Marketing was growing at such a crazy pace and it still is. We had a record Q4 at the end of 2020 for crying out loud.
What happened was I grabbed those people and brought them into our system. I didn’t keep all of the people, either. There was a massive difference of work ethic going on that I never could match up. For example, when I said they were doing the same volume of grocery seats, but they had 10 or 12 accounts. Whereas over for the same volume over at my other business, we probably had 70 accounts doing that. What’s interesting to me, I’m like, “We had the exact same number of people doing one and the other.” It was an eye-opener to me. Not that I didn’t know it in some way, but my team, they’re just animals. They are amazing at production. They are so organized. We have many great online systems. We project-manage the stuff. You cannot get a team to move into that very easily, not in mass.
Almost 100% attrition from the client base, but there’s a silver lining there. Have you been able to bring any of those clients back?
Yes. I do think several of them are coming back. You have to remember that some of them left temporarily and we had 2020. They were travel tourism. I had someone who called me and needed something, and everything’s going to be shifting and changing. The thing is, I did right by every single one of them and had the most amazing exit interviews with them as they left. “What could we have done differently, Priscilla? You couldn’t have done anything. We were so burned.” It was great conversations. Every single one of them, I have their cell phone numbers. They would call me about something. It was not this horrendous, nasty leaving, but it was heartbreaking in the sense that it did not pan out the way that I wanted it to pan out. I believe it’s going to be a much bigger turnaround in 2021 as we bring a lot of better possibilities for travel and tourism in this particular area.
You had an SBA loan. I want to talk a little bit about that. Did the owner get 100% of the purchase price at the closing table? Did you have some separate payments due to the previous owner?
No, I didn’t have to pay. I rolled everything into that. I did pay a lot of money down. I paid my fair share and then got the rest of it alone, but no other agreement. He was like, “I’ll come in.” I’m like, “No, you don’t need me here.” I did give him a 30-day earn-out in case I needed questions, but he was like, “I’ll be there on Monday.” I’m like, “I need the key. You’re never coming in here again.” He was shocked as all get out that he wasn’t going to come to co-lead with me. I was like, “Are you kidding me? You’ve got to get out of here. These are my people.” He was shocked as all get out that he was not going to be co-running the place with me.
You still have to perform on that loan. It sounds like you’ve been able to grow the business in other ways so you’re able to do that. Kudos to you.
It’s not been an issue there. Can you imagine? It could be a real disaster.
If you hadn’t picked up other accounts and these great people you could be sitting there with alone. I love to learn that there’s a silver lining here. I know you didn’t want to brag on yourself, but I’ve done a little bit of research here. You truly are a known name, entity, and quantity in the B2B digital marketing space. I’m not surprised that you’ve been able to overcome this. I want to go back to one of the questions I asked you, though, for the audience here. Do you think there’s anything you could have done differently when interviewing with those clients? Keep in mind, most buyers are never going to have that opportunity to interview clients. Is there anything you think you could have done differently there with the clients and questioning, or your diligence that would have thrown up a red flag and you might’ve taken a step back from doing this deal?
Two things, yes and no. I could have called those people independently because he met with me with them. It did not occur to me to reach out to them independently. He had also let his executive director know what was happening. I was meeting with her and him and the client. Certainly, I would think she would tell me. “Could I have done something differently?” Yes. I could have called them independently and said, “I haven’t made this decision. Could you tell me?” Now, if they would’ve or not, I don’t know because I wouldn’t have to be in it.
It also might have been a breach of confidentiality as well. That’s a slippery slope there.
The other piece of it was, I think him doing that made me take my eyeballs away from the contracts. By not going through and reading through the contracts, I’m not saying I didn’t read them, but some of it is a blur. I read them but not considered, “What’s the worst-case scenario here because he had far too many outs?” My contract is over on LiTTLE Bird Marketing. I have non-performance clauses if we don’t perform. Of course, you should be let out. You cannot be paying a marketing company a retainer when they’re not showing every day what they’re doing. He had no transparent system to report to the clients. There was no system.
The one other thing you haven’t asked that I think someone might find interesting is that, I brought all of the organization over there, which is my IP. It’s a system that I created called SOAR. One of the regrets I have there is that what it has done has pushed me back a bit. The next possible thing I was going to be doing at LiTTLE Bird Marketing is getting a patent and protecting my IP. That’s been delayed. That is only the bigger cost of business that I regret. I took my eyes off of LiTTLE Bird Marketing and how successful it had been. It saved us from this thing. I feel like, this year, I’m playing catch up with some of those types of things that are the next things we need to do in order to scale bigger.
Would you ever consider doing another acquisition in the future?
Absolutely. I still think that if you want to grow at scale, I’m not saying it’s the only way, but good Lord, I’ve done it organically. You are right. It’s powerfully hard. There’s almost no margin for error for small businesses. It’s one thing when you’re one person and it’s a lifestyle. Now, I’ve got twelve families depending on me for their kids, bills, and livelihoods. You don’t have the margin for error that larger companies have. Larger companies fail all the time. Who’s to say that I’m right with that? When you are holding that responsibility as a person, that is hard.
Let me ask this last question. We’ll wrap up and I’m going to give you an opportunity to add anything else you want to. If you do an acquisition again in the future, what are the 1 or 2 things you’re certain to do differently?
I would not be the person vetting this business. I wouldn’t even probably vet someone who comes to me. I would want someone who knows that area, knows business valuation, and has those connections. It was like, I say people ask me all the time, “I do marketing. Can you do PR?” “No, they are different things.” This idea of like, “Of course, I’m a business person. I could evaluate that, but those are different things. I’m evaluating it from me as an owner and me as an operator. I need someone to evaluate it from a scalable perspective, from a business valuation perspective, from a contract. There are many other places.” I would rather someone say, “I’ve spotted something else out here.” It’s like the person that you don’t want to hire the person who’s been out of a job. You want to hire the person who’s been working and goes, “Yes, I never thought about going somewhere else.” Is that a good metaphor?
Yes, along with, “Do you want something done? Bring it to the busiest person in the office.” Right?
Absolutely. This is why I get crap done all the time.
As a shameless plug here, that’s exactly what our firm specializes in is helping people do exactly what you described. I want you to talk about LiTTLE Bird and SOAR because my perspective on business and growth now is, your world is dominating almost every industry. If you don’t have a digital footprint, you are a dinosaur. I have to say, as a business owner who doesn’t come from your world, it’s very hard to navigate your world. New platforms are popping up all the time. The platforms out there changes its algorithms all the time. Keeping up with the digital and social footprint is so hard. Take a minute to talk about SOAR and your company if there’s any advice you have for business owners who are reading or want to be business owners as it relates to B2B digital marketing.
I’m going to answer that, but I’m going to come back to your shameless plug to say why I would agree with you on that. Sometimes I think you realize this. There are business owners who don’t realize they’re out of business yet, but they are. There’s a lag time to when you realize you’re out of business. Unfortunately, there are a lot of people there now. I say that why that’s a good plug for you, but that plugs into where LiTTLE Bird comes in. It is hard. It is a mystery to a lot of people. It is a noisy market. Everybody has an opinion. Everybody and their nephew have an opinion about what you should do with your website, with your SEO, with your content, with the message, with how you tell your story. I don’t care what it is. It’s just everything. It’s overwhelming.
Our ideal client is someone who is not the owner because they’re too close to it. We want not necessarily a marketing manager but any role. I don’t care what the role is. If it’s someone who acts like an owner, acts like it’s their money, is inextricably passionate about the revenue generation of their company, that’s my ideal client. I want to talk with them because they are very busy. They need confidence in the short-term and the long-term growth of the company while they still can get their actual job done. We joke around all the time about how LiTTLE Bird Marketing is a sleep improvement agency. Finally, these people can get some sleep and not wake up in the middle of the night on a Saturday night or Sunday night like, “Who’s going to post this to LinkedIn on Monday?” This chaos that reigns in digital, the unknown, and they don’t know how to measure. Even if they figure out what to do, they don’t know how to measure. That’s the backdrop to it.
Our IP, SOAR, strategy first, it’s Strategic, Organized, Accountable, Repeatable. You can crib that for me. You don’t have to work with LiTTLE Bird Marketing. That’s my gift. If you’re going to create a marketing plan, it better be in that order. Not just those things, but in that order. Coming alongside and saying, “That’s all great, but now how do I do the unsexy work?” Which a lot of agencies don’t want to do, which is, “How do I get all of that in order? How do I report this transparently, item by item, back to the client? How do I hold my feet to the fire for deliverables? How many blogs? How many social posts? How many lead magnets? How many emails?” Whatever it is that you need.Luck favors the organized. Click To Tweet
The other piece to it, which is I’ll end on this but on February 28th, 2020, I was standing on a stage in Amsterdam. I could see the bubble still over my head of what I just finished saying that, “If you have not pulled digital transformation, digital content, digital prowess, and digital dominance across your company or your agency, it’s not the future of work. It’s the past of work. You’re already behind, and you haven’t realized it yet.” I get off the stage. The first time I heard the word COVID, I got to get on a plane. I got to go home. Come 2021, of course, we’re in huge demand now because people realized, “We should have started two years ago. We should have started etc.” We do things for the corporate, but then I teach people how to be influencers. We have a digital transformation course where people learn how to be B2B influencers on LinkedIn, Clubhouse, Twitter, whatever it is. That is not the future of work. It is the now of work.
The silver lining is that we had all the momentum of LiTTLE Bird going into that. While we got unlucky with travel and tourism completely falling apart, we got very lucky that the digital transformation piece of what we do in LiTTLE Bird is the absolute number one. We’ve got the number one and the first and last of demand. In that way, sometimes you can pat yourself on the back too hard. There are decisions you make that are great and are not so great. My husband does like to encourage me to say, “Yes, I get it. People think you’re lucky, but also, Priscilla, luck favors the organized.” That’s a little bit of my story, why I think that we’re in demand, and why I’m still excited and not completely discouraged by just that one acquisition going wrong. I still think it’s a very viable way to grow.
I have to thank you so much for coming on. There’s a silver lining, but you shared some unbelievable nuggets for our community. They should be very grateful for you being willing to share your story. Thank you so much. If anybody in the audience wanted to get in contact with you, Priscilla, how could they do that?
We’re at LiTTLEBirdMarketing.com. We have tons of resources that are free. We’re not slimy salesy people so take what you want. I won’t give you a hard time. Also, of course, I’m on LinkedIn all the time. I’m an influencer there. I will answer your message and question myself. Find me, Priscilla McKinney on LinkedIn.
Priscilla, thank you so much.
Thanks, Dom. I had a great time.
I hope you enjoyed the episode. If you enjoy our content, please subscribe and review our show. I look forward to seeing you again on the next episode of the M&A Unplugged show. Until then, please remember that scaling, acquiring, or selling a business takes time, preparation, and the proper knowledge.
About Priscilla McKinney
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