Joshua Johnston - Born and raised in Michigan, former COO of one of the fastest-growing agencies in the world and an Exercise Science Degree holder. Josh is now the co-founder of 321 Pocket Ops and currently a consultant for digital marketing agencies...
Ronald P. Skelton - Host -
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Ronald Skelton 0:06
Hello, and welcome to the how to exit podcast where we introduce you to a world of small to medium business acquisitions and mergers. We interview business owners, industry leaders, authors, mentors and other influencers with the sole intent to share with you what it looks like to buy or sell a business. Let's get rolling.
Welcome, I'm here today with Joshua Johnston. I get that right. I say it right.
Joshua Johnston 0:34
Ronald Skelton 0:35
Awesome. It's from three to one. Ops. Is that right?
Joshua Johnston 0:39
Yeah. 321 pocket ops? Yeah.
Ronald Skelton 0:42
321 pocket ops, I I'm gonna be a whole, holy transparent, we spent the last 10 minutes actually Wow, 25 minutes trying to get the the equipment running. So if you guys see were in a different setting and stuff. We're actually in the podcast studio, which I've never used. We have it, we own it, we just never use it. I do might I do these for my office. And I don't have any of my show notes. So let's just jump right in. And just be organic here. Because that's kind of how that one for me. So Joshua, tell us kind of who you are. Where you're from, kinda, I noticed some of this cool stuff in here. I've looked through your I mean, it kind of creeped your eye crawl through your Facebook, crawl through your LinkedIn, your CrossFit instructor. And there's some articles or some things on LinkedIn that pop up that look like you'd might do some mountain climbing or, or art erode about climbing Mount Everest and stuff. Yeah, we cool guy. So tell us tell us about yourself religious?
Joshua Johnston 1:35
Yeah, yeah, yeah. 100%. So, you know, I born and raised in Michigan, from Ann Arbor, originally. So big, big U of M fan, and ended up moving to the west side of Michigan, to Grand Rapids for school, got my exercise science degree. And as anyone with an exercise science degree, you quickly find out that you stopped using your exercise science degree, three to four years after being in that field. So quickly transitioned out of out of exercise science, and I was a trainer, that's probably some of the background that you saw there, as I was a trainer at a fit, Fit Body Boot Camp franchise out of West Michigan. Well, so happened that that West Michigan franchise was the fastest growing franchise in the entire country. And we had when I started three locations, I believe, across 12 or 13 employees. And by the time that I left, we had over 50 employees across eight locations, multiple those locations doing over a million dollars a year. And I was just so enthralled by how we were growing so quickly in the scale that we were moving at and all the people that we were attracting in our hiring process. And so I got really attracted into, like scaling businesses and more of like the operational side of things. And so I got to manage a facility and learned a lot about the operations of, you know, a 50 person plus business, and it was extremely rewarding to me, because our CEO would just give us a ton of time of his time, and then also would just give us resources on resource. I mean, I'm talking probably close to $100,000, a year that he would spend an education for our team. And so I was able to learn pretty much anything that I wanted, even if it wasn't fitness related. And so I jumped into this world of ops and learning how to scale a business, well had the opportunity to actually leave the fitness world back in 2018, and jump into one of my friends, marketing agencies that he just started. And it was a single man operation at the time. And he was like, Hey, man, like, I want you to come on, start as my COO, and, you know, help me grow this thing. And I was like, sweet, like, sounds like a really cool opportunity. You know, it was new for me was a little scary, but jumped in and kind of learned as I went, and definitely was not deserving of the title of Chief Operating Officer. But you know, I remember one of the first books that I bought was how to be a chief operating officer. And if you look today, there's like maybe one or two books on being a chief operating up. So like, there's nothing out. There's no literature. So I was just like, trying to figure things out as I went, and a lot of like, what I learned were from other entrepreneurs in the space and in other great minds in the operational space. Well, kind of fast forward here. A little bit, we scaled that that agency, and we grew it to about about $4 million in revenue across 25 people, which was like a huge feat for us. And it was, you know, a really, really cool milestone in my career. And then we underwent an acquisition back in December of 2020. And after that acquisition, I had the opportunity to step into what I'm doing now, which is actually consulting on operations and systems for digital marketing agencies. So I work with about 2530 different digital marketing agencies all across the world anywhere from Austria. To Europe here in the US. And yeah, we help them scale their infrastructure and their operation and their teams, we really take like a holistic view of the business, we like to get down in the trenches with these businesses look at everything from, you know, the sales side to lead generation to fulfillment, onboarding, off boarding, churn rate, you know, pretty much the entire scope of the business is pretty broad, what we actually focus in on and, you know, and we help, essentially scale agencies, so, and that kind of brings you up to speed to today. So it was a little long winded, hopefully, hopefully, that wasn't too boring.
Ronald Skelton 5:37
No, that was it. And, you know, something my listeners probably don't know, unless they do a little research on me, my friends and family certainly do because I put a lot of hours on it is I'm a mergers and acquisitions guy. That's what this podcast is, that's how to exit, right. But, uh, in the grand scheme of things, and I'm gonna just try this, and the grand scheme of things. I spend most of my days in a giant marketing roll up for we hate that phrase, but for better for common phrases that people would hear. It's a marketing roll up, and but it's called the International Marketing accelerator. And we've been working on it, or since January February's and we're really got kicked off. And I just got off the phone today with a, I won't say who they are, but they're holding company, they've been in business for a few years, they've acquired four agencies that are looking to do eight or nine by the time they're done. We've got 19 in due diligence. So I mean, we're beautiful. I speak to a train four and six marketing agencies that day. And the last 8090 days, when we started talking to him, I've actually been on the phone with and talking to, in an acquisitions conversation, the mergers conversation with probably over 100 140 150 agencies. So and there's some really unique stuff inside of them, a lot of them are million to $2 million, our kind of our our bottom threshold is a $2 million agency, kind of top would be 25 $30 million, we probably could talk to somebody bigger than that, but that's who we seem to be attracting. And we built an advisory panel of people that have done it before. People have grown global agencies, and scaled and sold them and some of the top advisors of the world. So I'm interested in this conversation to talk about the merger and acquisition side of it, like, you know, what did that without giving the name of the company acquired? You are good chairman, anything you say? Just let's like kind of what did that look like? Because one of the things that we set out to do at ima the international marketing accelerator was to what we call it call it democratizing wealth, We're disrupting the entire marketing agency model, we think that the traditional model of mergers and acquisitions in marketing is broken. Right? Usually what happens is a cool company like yours, you guys were working you created you spent Blood, Sweat Tears, and we like to add on years building this thing, right. And usually these the acquisition model looks something like they come in, they offer you anywhere from, you know, a few X to maybe six or seven, you know, unless you have something really unique, they might go above that.
They merge it together, they spend a few years, you know, doing some synergies and all their mergers, and then they sell it for full industry multiple, which is usually above 10 or 11. So we jokingly say that, you know, these mergers and acquisitions model, currently, the traditional model is they buy it wholesale, and then they sell it retail, right. And we've turned that upside down. And we actually give our agency owners a chance to participate. They keep the majority stake in the entire process. So we take a minority stake a one, and they get to participate in that liquidity event. You know, we've got planned, I know, I keep saying 36 months out, but now it's like 30 months left. Right. So you know, so tell me a little bit about kind of how that process went. What do you do to like, and what yeah, like about the whole acquisitions?
Joshua Johnston 9:06
Sure. Sure. Yeah, I think like, the first thing that kind of comes top of mind is like how little you actually know about business until you go under an acquisition, right, and start the due diligence process. And, you know, how, you know, well behaved, you actually have to be in order to get a solid multiple on your business. We were acquired by a venture capitalist firm. And it was a really cool opportunity at the time and, you know, to have some, some extra resources coming through the door and the ability to hire more people scale our infrastructure. You know, for us, I to this day, I don't think it was the correct time to sell. I think we still had more to prove on just like our profitability side, like because we self funded our own scale. You know, and so for us, I don't think we're in a position to necessarily sell it yet. I Just think, you know, for us it was, it was attractive at the time, it's nice to hear, you know, numbers start coming out of the woodwork, I wish we would have played things a little bit more patiently and, you know, heard a few more offers and had some time to, you know, increase our EBIT up, because, you know, at the end of day, we could have increased it, you know, at least by a few points and, you know, allowed us to be in a better position for an acquisition, we could have sharpened it, and a few more of our systems as well, making sure that, you know, whoever the acquiree was, like, we could show them like, hey, like, every system within our, our agencies, you know, easily replaced by someone else, if needed. And so that's what I wish we would have done a little bit better things that we did extremely well, is that our key players, our, like, our C level team, was very removed from the fulfillment, and a majority of the decision making happening on like, the ground floor, like in the trenches, so we were able to, you know, allocate to our team, a lot of the fulfillment, a lot of the decision making, and you know, our whole job, your My job as the COO was just to make sure, hey, you know, we were keeping tabs on all projects happening, and that they deliverables get delivered on time, and in a high quality fashion. And then on the CEO side, I mean, it's essentially what a CEO does, it's visionary. And it's, you know, making connections getting in the right room speaking on stage. And so we had the ability to also, you know, get him in a position where he wasn't, you know, in the day to day fulfilling, and that's like the first step of like, if you ever want to undergo an acquisition, you have to start removing yourself from the day to day in the fulfillment side of things. And then eventually, once you're out of them film it, you also need to start being okay with delegating decisions out, bring in some specialist people that are extremely good at their position, whether that's, you know, a chief financial officer, COO, chief marketing officer, you know, these people are going to be specialized in what they do, and hopefully make higher level decisions, and you could, within that position, so that, you know, you can go and you can acquire, you know, more deals for deal flow, and be able to, you know, kind of be more of like the face of the brand and increase that multiple simply through you not having to be a part of it, that's what makes, in my opinion, an agency very attractive to buy is that the owner, the person that founded it, doesn't need to be there every day, and have their hand in the pot constant, like they can go and do some things that will help with the growth of the business. So
Ronald Skelton 12:36
it's interesting, we actually have a role inside of the mergers and acquisitions, like, you know, guys like me who buy and sell companies for a living, is we don't buy ourselves another job. Right? We look at it when we're going through the due diligence, and we're looking for that we are looking for, are the books clean? Do you have your you have your stuff in order, right? And not just did you get an order over the last six months, so that you can look good to an acquisitions guy, we go back three years, right? So you know, you know, and we don't mind that you went back and cleaned it up? But have you done the legwork to make everything right, so that, you know, the last three years everything, you know, correlate, so the other side of it is like, who has to stay and who can go is really critical for us, like we don't want to buy ourselves another job. Now I've seen never seen an acquisition where the, like myself or somebody doesn't have to jump in for a little bit. But the whole point is the team should be there and able to run it. And you know, the acquiring partner or what you would call it the company person inquiry and you easily be able to look at it and go okay, this thing would run pretty well, if I stayed out of it maybe even better if I stayed out of the way. Right, right? Well, how can we augment it, grow it, acquire another company bolt onto it, you know, the things that we do, we want to focus on that, instead of the things the company should already be good at doing, like what you're talking about the systems, the processes, everything's documented rights, standard operating procedures, if somebody leaves the next guy come in and doesn't have to reinvent the wheel, you know that the way that you've done it, the way your customers expected is documented and can be done.
side of your coaching business, you know, I really like this, that what you're doing? Do you have companies you're growing and like they're preparing them is, in my mind, every company should always be preparing along the way you're preparing to sell even if you don't ever want to sell yet, right? If you ran your business as if you're going to sell it someday, you would have a different business than if you just show up everyday trying to make another dollar, clean your taxes would be well, you could take more vacations, right? Sure. You wouldn't be handcuffed and, when or when an acquisitions happens when a guy like me comes and wants to talk to you.
You'll have less you know, in the marketing world, I think the standard is three to five years of an earnout you know, yep, way to avoid the earnout is like hey, I haven't been in this company. I haven't been actively planning, In this company for the last 12 months, I go in one day, a week, two days a week at most, right? This thing runs without me, that's the only way any any person in the right mind acquiring a company wouldn't want the guy that created it to be there. Right, exactly. What started your current business and these agencies, your coaching and stuff? Is that is that a consideration? Like one of these days, they might sell you? Here's the things you need to have in line just in case?
Joshua Johnston 15:28
Yeah, yeah. 100%. And, you know, and that's one of the first things that we cover is like, hey, like, what are we building for exactly, like our, I guess, the main goal that go under acquisition and how you build, you know, a lot of these successful agencies is going to be exactly like, like you were going to sell it. Now, some people do have other goals, like you were saying, like, not everyone is going to sell. I know, a lot of agencies that are cash flowing for just bigger and better opportunities, like they're taking their agency, and they're taking the profit, that they're making that investing in E commerce and bringing on their own e commerce brands, now they have an internal portfolio, their marketing team can support that E commerce portfolio with their marketing team. And now it's like they have an all in house shop, you know, in, you know, with their business. So, you know, I've seen those things happen. And I think you can do things a little bit differently, if that's the strategy, I think there's the ability to bring on like things like more contractors and, you know, kind of play things a little bit tighter, when it comes to the finances of the business, like you become more profitable by, you know, not bringing on full time employees, and staffing, you know, your entire agency ahead of time to, you know, kind of get it to a point of like, hey, like, we're just trying to get to this point in cash flow and this point in profitability. So we can take that profit, and go apply it somewhere else, whether that's, you know, ecommerce, real estate, whatever it is that, you know, your heart desires when it comes to your next venture. But for the most part, yes, 100%, like, you should be building this thing, like you're gonna sell it.
Ronald Skelton 17:03
And I think the everything we're saying here, for anybody out there running a business applies to any business, right? I don't care if you run a donut shop, or you run a marketing agency, the same principles apply, right? Run it, like you're gonna sell it someday. And if you ever need to, you're ready to go. So, inside of the marketing, I think you refer to like, digital marketing. What do you see right now I've got a pretty good scope of this. I've talked, like I said, I've gotten an hour on the phone with at least 140 agencies, at least over the last eight years, probably 7580 days. So probably think I've been saying 70 days for about 10 days now. So probably closer to 80 days, you get caught up in it, I bet if I looked at it, it's 85 or something. But um, if you since the end of July, early August, I've been talking to agencies, I've got a stock literally of notes on my desk that's like that thick, right? Yeah. And I'm old, I'll be 50 soon. So I still take notes on paper, then I transfer them in the computer later, I can write faster than I can tie. So I've
Joshua Johnston 18:10
Got a great, I got a great, I've got a great system for you, that will digitalize everything instantly. It'd be it'd be beautiful for you.
Ronald Skelton 18:17
Use the otter but, uh, man, I still have to go back and translate what other things I said.
Joshua Johnston 18:22
Ronald Skelton 18:23
So anyway, um, that I that's not a plug for them. Anyway. Um, so inside of that, what do you see as the biggest obstacles to growth for most of the agencies that you come into play?
Joshua Johnston 18:35
Yeah. Yeah, you know, I think the days of you know, like, single channel marketers is kind of, kind of gone. You know, Facebook used to be this place where anyone could jump in and be an awesome Facebook marketer, you know, just throw some campaigns together, pull a couple levers and then let Facebook do its thing. It's like shooting fish in a barrel. Yeah, those days are those days are pretty much gone now. So I've see a lot of agencies adapting until like a more full service model where, you know, they're, they're doing multiple channels and mitigating spend across a lot of different channels. They're tapping into more owned audiences like email. And, you know, SMS has been really hot for a few of my clients recently, there's a couple really cool software's out there, that are popping on the scene for SMS. So I see people starting to mitigate spend more. The top agencies that I've seen, like more on like the paid side of getting more acquisition done is they're operating off of p&l, which is how it probably should have been done this entire time. Instead of using the attribution from, you know, say, you know, Google or a, you know, Facebook, they're tapping into more like a holistic view of the entire business itself. They're not just looking at, you know, you know, what's coming in from Facebook, and what's coming in from Google. They're looking at the entire p&l and they're making the decision of the company's p&l, and they're looking at, you know, cogs and they're looking at distribution. And they're taking a, almost like a more in depth look like they're like a fractional chief marketing officer. And the ones that are doing that are winning tremendously right now, because they're getting better results, they have a better understanding how the business is running. And they can give better recommendations based off seeing the entire piece of the pie, not just a slice of it.
Ronald Skelton 20:29
Since your state does see a lot of agencies I talked to who have built out a, what I call the strategic arm, they actually do some strategic consulting, instead of marketing, not just like the message, the brand and everything, but strategically how to put things together and all you know, from search for strategy all the way down to the most of the time, if you think of marketing, it's the tactical side of it, right? You, you take ads, you put it out there, you measure results, you twist it until you get the results and the return on investment that you want. You know, those are all kind of tactics and tactical side. There's a lot of agencies right now that are building out a strategic almost consultancies site. There are agencies, they look for things that are, you know, brands that are broken brands that are fading, and you'll come up with strategies to really revive them, regrow them. And but one of the things I'm seeing across all these agencies that we start looking at, what are their barriers to growth? I think right now, and this might be just a thing in the last 12 months or so because, like I said, we just started talking to him about 8090 days ago.
One of the things I've seen it is like the number one thing, and it's this, this was shocked, shocked me if you told me this, prior to this whole process, my master's degrees in marketing, but I have an MBA in marketing. But if you told a guy with an MBA in marketing that these two are the top top two things, I just check in my head, like no way, because I'm marketing companies, right? The first one is hiring and retaining great talent, right? Their marketing, their marketing companies, you know, my assumption would be they could go out and marketing cause people to want, you know, want to be part of what they do, and cause people not to knock on the door and like, you know, then they could just sort them out. But it's not. So they're so busy working on their clients stuff. It's the old cobblers need shoes, right? The painter needs to paint his house I grew up my father was a painter, our house seemed to always need to go to a fight, we always were out paying somebody else's. Yeah, that said, the other side of it is, you know, this one would shock shock me even more as lead generation. Almost, there's a study that we actually downloaded we're looking at, and I think the study was like less than 10%, it was honestly, it's five or 6%, or maybe even less than that, of all agencies get their next clients through marketing, almost 80 to 85% of its referrals from you know, existing ads and clients they've had when you when they move from one agency to another, they took clients with them and stuff like that. So but I think part of that is it's an oversaturated market, you have a lot of people coming in and saying that they're marketers, and unfortunately, there's not right. And so lead generation becomes an issue for bad marketers, unfortunately, you know, it's like, because when you're a bad marketer, you lose clients just as fast as you sign up. So your entire thought process goes back to well, I need more leads, when in fact, you know, you are actually your issue is that you're not getting the results for your clients that, that you need to be getting them. And so your your bucket is leaking, and your clients are exiting just as fast as you're signing on. And so the thought there, and this is what I deal with, with a lot of my agencies that are just kind of like getting some traction or just getting started is that like, oh, yeah, like I'm having such a hard time getting leads. It's like, well, how many leads? Are you getting? Oh, well, you know, taking, you know, 20 leads I'm taking from those maybe like five sales calls. Like okay, so how many of those are you landing? Well, I'm landing about two of them. What's fantastic, like two new clients per month, like I think, kind of industry standard, like roughly around $4,500 5k per month on average retainers you guys are should be a very quickly growing agency, like pretty healthy. And so when that's the case, and you're not seeing growth, there's other problems at hand, right? And a lot of those stemmed back to one, we're not getting the results or to the client, the client experience is just not very good between onboarding or communication, whatever it is. And so that's where, you know, you have to go and probe in on what the actual problem is. You know, I know a lot of people complain about lead gen, but I refuse to believe that it's the actual problem.
It's interesting because, like, we've talked to quite a few, and all the ones that say lead gen. I don't see a correlation and they're constantly customer retention, like I'm talking about, you know, I'm talking about first and second calls where we haven't done their financial due diligence. So I don't know how much hot hot air they're blowing. Right. But from the conversations, they're still claiming 90 95%, you know, retention rate. But I think to put some color or some scope around the conversation, when I talked to him, what are their barriers to growth, we expect agencies that come to be part of our international accelerator, with our assistance with cross selling upselling. But the 30 or 40, agencies, maybe 50 agencies we bring on board, we expect them to double or triple their revenue, their current trajectory. So they double or triple that during our product during our process over the next what's left at 30 months, right. So when we talk, it's inside of that scope is like, if we were able to double or triple, you know, a lot of the guys come back and go, I'd need more leads, right, the referrals would not let me grow that fast. And I was like, I don't think they get the fact that we're gonna have 45, you know, 5060 other agencies that don't necessarily do what they do that are cross selling and upselling their services. So those are almost referrals. Right. Yeah, to some extent. But, uh, you know, if you look at these agencies, they don't actually what I'm saying is they don't actually have a plan where they go out and do lead gen, right. Yeah. And I think, I mean, these guys have people there, a lot of the guys like, we turn away more business than we take on, right, because they're the roadblock to growth to them is highly trained staff that can deliver the level of quality that they want to continue to deliver at. So you know, they have to, you know, I was talking to a guy the other day, and he said, Well, they turn, you know, they get about 10 proposals, you know, they get 10 conversations, you know, about every two weeks, so about 20 a month, 25 a month, and I said, Well, how many new clients each take on he says about three? And I said, Okay, so what's wrong with the other, you know, 22? And he said, Well, 70% of those, they just don't qualify to be like they're not, they're not our target, right? They just right there. They have issues on their own right. And it just not a fit, it's maybe not a cultural fit, maybe their products not of quality. Maybe they're doing something these guys don't want to be involved in. I said, Well, okay, now we're still looking at you know, a few few of them there. What about those guys? Because we have to cherry pick them because I don't have enough people to service. Everybody that wants our service. Yeah. So
Joshua Johnston 27:24
Yeah, there's, there's a massive, like a talent pool shortage. Right now in the marketing space, there's, there's a lot of people that are, are, you know, not quite ready for that next level of coming on to like a very talented marketing team. That's why you're seeing a lot of these acquisitions and roll ups like even in other agencies, acquiring smaller agencies just simply for the talent, nothing to do with, you know, necessarily the client pool that they have or, or their systems. It's quite limited just to acquire the people within that business. You know,
Ronald Skelton 28:02
it's so common, they have a nickname for a cue choir. So like that,
Joshua Johnston 28:05
yeah, cue choir. Yeah
Ronald Skelton 28:07
They're just required for talent. I mean, if you look at the big guys, like, you know, the big companies out there, not necessarily marketing companies, but big ones, like Google's at Apple. A lot of times they're just they're acquiring purely for the talent.
Joshua Johnston 28:18
Yep. Yeah, exactly. So, yeah, the talent pool is difficult right now. That's, that's one of the biggest barriers to scale for a lot of agencies is finding the right people. And I always tell people, like, you gotta, you got to get a little salesy sometimes, like, utilize your LinkedIn network. You can you can poach some some people and it kind of sounds dirty. But I mean, there's a lot of people working for fast growing agencies that just aren't getting an awesome experience. And if you can deliver an awesome experience for them, you should feel kind of like vindicated to, to go and get those people. I think that's okay. In my opinion.
Ronald Skelton 28:55
I don't think it's shady at all. I think that the really great people already have jobs, right? I know. I rarely would bring on somebody or hire anybody who sends me a resume that's unemployed, right? Yeah. I, I've I've made some of my best hires out of category and totally from somebody else, like one of the best. I was in the IT world for a long time. I told you that already. But uh, one of the guys one of the ladies, I won't say her name because she might be listening to this stuff. But she was a shoe salesman, it would be all of all things. I was at a I was trying, I was teaching martial arts back then I was a much skinnier guy. And I was looking for some wrestling shoes to use on the mat. I wanted to try them out. Anyway, this this lady, she had a difficult customer. And the customer was just like kind of a pre Madonna just like you know, wanted to be like concierge service. And this is like a footlocker or something. It wasn't like a high end shoe store. Right? I was going to get wrestling shoes. Yeah.
She handled it so well. I basically said, Hey, come here. She says, What kind of shoes do you need? And I was like, I don't need wrestling shoes, but already picked them out. I want to chat with you about something else. And she's like, What is you know, what do you want to chat me about? I said, You're in Silicon Valley, what is it you want to do? And she says, Well, I eventually want to learn to program I'm thinking about going to college for so well, you know, who excite calm is this? She's like, Well, yeah, it's your website portal. I said, Well, if you want a job, you've got one, here's my card, call me tomorrow, you can start on Monday. Wow, my guys will teach you how to teach you how to code. Right? It might take us a little while to get around to it. But you know, she was one of the best administrative assistants and you know, I had a lot of Oracle Database Administrators and some other guys. I mean, they make more money than you do as the Director of Operations, right? Sure.
But they're prima donnas. Like they, you know, they come in when they want to come in, and they go home when they want to go home, and you got to keep them because nobody else can do their job. She was amazing with those people's best hire I ever did. So I still am a big believer that you can, if you learn to spot talent, even when it's out of category, you can teach somebody a skill, but you can't teach them the soft talents, the hours of dealing the personality of dealing with difficult people, and a personality of just being natural at the good human service. I like to call out good, you know, good, just good, being good with people who are being difficult to you. Yeah. So I don't think it's shady or scammy at all the plug people I have a friend who has a fastest growing 500 whatever they call that Yeah. 500 headhunting company, that's what they do as well.
And they don't, they don't look for resumes, they look for people that are already happy at one company, and they pluck them from them and move them to another, oh, cold will actually reach out and cold call an engineer, you know, and only engineer and say, Well, you know, are you open to new opportunities? But that's where the greatest people are actually employed. Right?
Joshua Johnston 32:00
Yeah. 100%? Yeah, one of my favorite tactics was just, you know, dropping in someone's DMS, on LinkedIn, and not necessarily like, Hey, are you open opportunities, but like, I would always just say, hey, like, you know, our agency is currently staffing, if you know, of anyone, you know, you know, send them send this link, you know, and it's like, I'm not directly saying it to them, but it's like, here you go, like,
Ronald Skelton 32:28
You probably got one of those, you're in the marketing space, you might have got one of those messages for me is like, Hey, I'm a property investment company, or marketing companies. You know, are you interested in talking to, you know, mergers and acquisitions, you know, investment group? You know, we're all unique. And or do you know, anybody that, you know, we do send out message to anybody that has an agency that's doing over $2 million a year? They're like, Well, I do I, what are you? Are you world class, like he really good at anything? And they know, they're, we're looking for them to self identify? Yeah, exactly. I love that. Yeah. So
I asked you a lot of questions. And one of my favorite questions to ask is like, after everything we've talked to, and these are the questions I've asked you, What should I have asked, right? What should agency owner and this is for agency owners in any business owner? What should they know? What did I miss?
Joshua Johnston 33:20
Yeah, man, that's, that's a good question. Um, you know, I think most of the time, you know, when it comes to quick, quick, growing businesses, and especially agencies, you know, you're in the people business, right. And so you need to really ask a lot of questions around the type of people that are in your organization, and making sure that the team is in alignment with the culture and the vision of where you want to go. And oftentimes, you know, agencies are so fast moving. And, you know, we we just, we go, we go and work and, like, I'm sure you remember, in the agency space, it's like your day is done like that. It's a snap of a finger. And it is there are no long in my opinion, there are no long, I never had a long day in agency space, it was just flying by. And so what that being said, oftentimes vision and culture will get pushed to the side. And sometimes people get pushed to the side. And when you are operating a people business, you need to keep people top of mind.
Ronald Skelton 34:25
I get that I believe that. So what is the other another question? I have a kind of that same realm is are there any preconceived notions that are common in the marketplace? That just bug you? Right, that there's a common belief about something in the you know, for your, for your case, the mergers and acquisitions of agencies or even just the growth of digital agencies that there's some common belief out there that is an absolute total fallacy you wish would go away?
Joshua Johnston 34:53
Yeah, um, you know, I think there's a certain persona that agents, see owners feel they need to fulfill on have they look a certain way, or they drive certain cars or they need to spend an X amount of dollars in order to impress someone in like the private jet life and like in dome Iran, like, it's cool, it's fun. And if you can afford it, awesome, go for it. But that doesn't, that's not what's gonna make you a great marker, that sound that's going to help you build a great team and a great culture or build a strong business. Like, if you can, you know, kind of wait on some of those things you can put your you can put your business in a really healthy position to get acquired and get acquired for a very high multiple, if, if you're a little bit more frugal, and like I said, you know, I'm not talking like put your Starbucks coffee out and you know, don't get the subscription and Netflix and like that's, that's not what we're talking about here. I'm talking about, like, you know, really overdoing it and, and, you know, having expenses at the detriment of the business.
Ronald Skelton 35:55
It says your stain is I think it was a one a Dan Solomon's books or something. I read a lot of stuff. But uh, he refers to like money and interesting ways as most people when they tell you they want to be a millionaire, they really don't want to be a millionaire. They want to spend a million dollars, right? On the things that go by.
Joshua Johnston 36:14
And I love that I'm stealing that.
Ronald Skelton 36:18
Joshua Johnston 36:18
So, so good.
Ronald Skelton 36:20
Yeah, I see. So that some of that with the smaller agencies, I seen one of the agencies, He cleared his first, you know, like, net profit of well over a million dollars, you know, but not quite two. And I, we asked him like, Well, what did you do? Well, I bought this and he spent a million, but he basically paid himself a million dollars, because he's never been able to do that. And I was like, Okay, well, first of all, that's not how businesses are run. Right, as you know, and that's gonna hurt you in the long run, you had a windfall. And if you could just, you could have cascaded that into so much more. But it's true a lot of people and I have a background in real estate investment. I mentor I had a guy text me today asked me if I'd privately mentor him in real estate. And he's, I don't do that anymore. But he's have a high enough clout color, Brian might talk, I'm gonna talk to him and see what it is he wants. Yeah, you know, it's three to five grand a month for my time, but if he really wants to do it, and he, you know, he usually to get the work done, I'll talk to him. But that said, most of the people that get in there, there's, I've actually, you know, I've been working on a book forever, I keep need to finish it ups called Get Rich, get rich, quick, my ass. And it's about the fallacies of the side of the real estate space. A lot of these guys come in, and like they think they're gonna make a million dollars in the first two years that some people do. Like, if you can get into create systems processes and turn a bunch of properties out. You can do it. I've seen it done. I've mentored people that blew past me and like, you know, what, one of the guys I mentored here in town is probably the, in the top five investors in the state now, you know, flips, houses, all that you got over 200 properties, you know, as far as like, individually houses he owns and flips 10 or 15 at a time, you know, but so it is possible, but it's, I honestly think there's a huge fallacy in this. Get rich quick or you know, overnight success, right?
Joshua Johnston 38:08
Ronald Skelton 38:10
So anyway, I think I'm running close to your time here. I think we, you said you had something right after the talk.
I do. Yeah, at 11:15 I have a meeting. So
Cool. So let's just wrap this up. There's any final words? How do people get ahold of you? Like, how do they reach out and find, yeah, get ahold of you?
Joshua Johnston 38:29
Yes, social media is a great, great place. You know, LinkedIn, great place to reach me, Facebook, Instagram. And you can find me on my instagram is at Joshy Kobayashi and I can I can send that to you. You can, you can plug it in somewhere if you need to. But yeah, or you can, you know, get on a strategy call with me through our website. Happy to talk shop and, you know, help get you guys in the first initial direction if needed. So, yeah, what?
Ronald Skelton 38:59
Whatever works well, for the for the listeners.
Joshua Johnston 39:01
Yeah. So 321, pocketops.com.
Ronald Skelton 39:06
Okay, so if you want to get a hold of Joshua here, you can find him on social media. There's quite a few jobs, Joshua Johnston's on LinkedIn, but if you look for three to one pocket ops, yep, you can find him pretty quickly. And then you know, go to 321 pocket ops.com You can reach out to him schedule a console consultation call or a free coaching call or whatever you want to call them. And that's how you get a hold of him. And thank you, Josh, for being here.
Joshua Johnston 39:33
Yeah, thank you, man. I one of my favorite conversations I've had on a podcast so far, so I appreciate it.
Ronald Skelton 39:39
I enjoy this. I should be.
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