How To Scale Your Business & Prepare A Profitable Exit with Niels Siskens

He has built a strong network of seasoned engineers , designers and virtual assistants who are proficient in the latest technologies and frameworks . He also hosts the Tilt Show , a dynamic podcast that bridges North American and Latin American tech experts , offering invaluable insights for anyone aiming to initiate or expand their tech business in the region .

Through this platform , he promotes and contributes to the evolution of the Latin American tech landscape , showcasing the opportunities , challenges and innovations that shape it . His mission To connect , inspire and enable tech success across the Americas . Niels , I'm so glad you're here today . Thanks for being on the show .

So I've been doing that for the last nearly 10 years now . So , yeah , it's approaching 10 years . In terms of leadership , it's very different here . It's more hierarchical than you would find it in , in , specifically , europe and the us . Like , uh .

The us is very flat in terms of like , uh , technology companies are very flat organizations everybody would call you by their first name , but here it was still a little bit more traditional . It's . It's changed since then , so , especially with the north american influence .

But , yeah , when I came here , people really saw you as a , you know , as a , as a god almost . But yeah , I , I wanted to change that culture from the get-go because I like it . What america way better .

have talked previously about a number of things dealing with the agency world and a lot of the people listening to this . They're entrepreneurs , they're digital marketing agency owners , they're business leaders of a lot of different stripes .

And one thing that a lot of people are thinking about when they start a business or as they begin to grow and scale , it is what does the exit look like ? What does it look like at some point to hand this thing off , to sell it , and that is not something that I believe anybody is born knowing how to do .

You have to figure it out , you have to get wise counsel . I watched my grandfather start a business back in the 1960s and he grew it and sold it in the 1980s right , and the exit allowed he and my grandmother to live for the rest of their lives based on that recurring income from that sale .

That's kind of the entrepreneurial dream and I know a lot of the people listening have that in mind too . They want at some point to be able to exit , whether it's through an acquisition , a sale , however it is . You do a lot with this and I would love for you to talk a little bit about what does it look like ?

If that's your goal , what are some of the things you need to be thinking about that you need to keep in mind ?

I think a lot of people dream about it to sell their company what a good difference what that's a major difference I think most people just you know , when they start an agency , the issue that they have is , you know they , they get barked in some kind of job .

I've been there as well , and it's usually not a fun job and more often than not , it's not a very high paid job it might turn into a high paid job at some point , but to sell your company .

Nobody's gonna pay for a company where they can make a hundred thousand dollars , right , they're not gonna pay a lot of money for it because you can you know , you can apply at any job make the same amount of money and you don't actually have to pay any money for it , right ?

So companies usually , when they sell for anything at all , I mean they usually have an owner that's not very hands-on , that's sort of , you know , having a yacht somewhere or is , you know , lives in Thailand or whatever , enjoys life and his team operates it , right ?

So it's , you know , it's not that if you have an agency it automatically turns into something that's worth something to somebody , right ? So where people dream about , they dream about like , okay , hey , you know , I'm building this thing and I hope one day to get , you know , a million , two , three , five million dollars for it . But that doesn't work like that .

You have to really have all the processes worked out and it needs to pretty much operate for , you know , multiple years without you being there physically right .

And then , yeah , I mean , if you're 20 years , I'm 42 right now , so 20 years be like early retirement . Um , like you know , let's say you have a yacht , which also a lot of people dream about , right , it could be a sailing yacht , any yacht . And like , let's say , you have , you know , two owners that talk to each other , right ?

And the first one says , look , I sold my business . Or look , sorry , I , I have my business , it operates itself , right , and I , that's why I could buy the yacht and I'm here and I can , you know pretty much , and I have Starlink and once a week I check in with the team .

And the second owner has the same yacht , but he has to be with his team five days a week and he can only use the yacht two days a week , right ? So which owner do you want to be , right , and at the end of the day , both have the same yacht . Let's assume it's the same thing , right ?

Yeah , and then if you're in the Yacht Club bar , which business are you going to buy , right ? Not the one where you have to be there five days a week because you already have the money , so you don't really want to start doing the work on the one that doesn't require a lot of work , right ?

So I mean , as you mentioned , where I I come in , where I help , a lot of owners is think about okay , look , you have this team of developers , right ? You build it from scratch . Um , let's say you have five developers where we help them out . It's like we coach them and then we take some of those developers skills .

We take them near shore , where it's a lot cheaper . So in the end of the day their bottom line goes up and also in five , ten years , their multiple goes up by a lot . So let's say , you know , in case of 10 people , usually a developer in the us makes anywhere from 100100,000 , $150,000 , sometimes cheaper . But that's about what ?

Ina , good city , new York , atlanta , those are salaries that are being paid Near shore . Although it's gone up , it's still a lot cheaper . And so let's say , you make 30% , 50% on that .

That's a serious amount of money and that multiplies if you sell it right , the multiple uses , but anywhere between four and a half if you're on the low end , to like 10 if you get super lucky , right , so yeah . So that's sort of what I coach people on is , like , look , you have this operation and some of your text out is really good .

Some is a a little not right . Let's look at them and see how we can sort of come in there , right , yeah . So that's a little bit where a lot of I would say , marketing agency and also tech agencies they go off a little bit right . So if you have the operation for tech really structured out , it brings you to usually needing to work a lot less .

That is what we worked out and including ParroLabs , because we're not , you know , a 2000 head agency either , which is like a really big one . We also have our speciality right . So you need , like , a marketing agency needs to look at what are we really good at right ? So that's the other thing a lot of people want to do everything .

So if you sell everything to everybody , cut out some things , because there's usually things that are you're you're probably better like somebody else is better at right , so right , so yeah .

of the spotter web and everything connects to them as the owner , every decision has to come to their desk . You know everybody's constantly asking hey , what about ? What about ? What about ? What about ? When they talk to you ? They come to you , they're like hey , I'm thinking about an exit , I'd like to start talking about that .

And they're at the center of the spider web still . No matter how old the agency is , everything's got to be run by them . Where do you start with them ? As you're talking with them , where do you begin ?

They're the micromanagers that started their business right , and I would always you know , I'm always thinking like as the big , you know entrepreneur says , like look , you got to hand it over to other people and allow them to make mistakes , and that's the hardest thing , because those mistakes usually cost you a lot of money right , I mean , it could be that I

don't know like . I mean , a specific example that I can come up with is that you know the the first assistant I hired in Colombia . She didn't know what a formatting a hard drive meant . So she , and if you go from a Windows computer to a Mac , the Mac will ask you to format the hard drive to use it .

So , long story short , we lost a lot of data that day , basically because of a format of hardware .

Luckily , we had a backup , but that was the first employee we had on the first day and then since then , that's an example that I still have , sort of right , and I admire the person because he grew a lot with us being here , because you grew a lot with us being here .

But I mean , since then I've gone through many , many things where you sometimes get a little bit allergies from other people making mistakes , but that's the only way to build a team , build a company , and if everything has to go to you , you will always stay a small organization . So I would say , you know , take some whiskeys

at night , think about what went wrong that day and allow people to overthink it basically , or to redo it .

Right so , and you know , a better answer for somebody buying is that no , I have the guidelines right here , it's our SOP . Yes , we have a process in Jira ClickUp . Whatever you're using , it's not perfect , but it gives me enough guidance to do it . Right ?

So the last couple of years , also in Parro Labs , we've been starting to work on that a lot , basically , and that is very important . And you should basically make sure you're out of the operation as much as possible . You're the face of the agency .

You need to go to clients , reel them in , sell them , basically , and that's basically the last thing you need to do , like set up the sales process and also outsource that somebody , and then you're there pretty much . Right , yeah , if the agency is willing , it's not worth a lot to anyone else .

And what I often tell them is you can't lead a seven-figure agency the same way you led a six-figure one , and you can't lead an eight-figure agency the way you led a seven-figure one . Can't do it . And if you're getting ready to sell , you've got to understand this thing has to be running without you just like you're saying no-transcript .

They think they know better . They think , oh well , I'll get to that . I'll get to that , but right now I've got to be the one doing it . Nobody can do it like me . Nobody can do it as well as I can .

You know tomatoes and that is you know . He's been trained that a chef buys his own ingredients and to an extent it will lead to a better project or product . But in the end of the day you gotta let that go because you're spending three hours a day to buy tomatoes and you know olives and whatever goes in your .

You know your recipes , but you gotta hand that over at some point , right ? And and yes , of course you will get bad tomatoes one day , but then the next day they'll be better and you just tell the guy who brought the bad tomatoes not to never come again . Basically , right , that is like how you get the better tomato .

So , yeah , I mean it's hard for anyone not just agency owners to hand over , to let go of control , and the ones who let too much control that's the other side basically have no control and that is also not good . It's a mixture of both .

Likely to run down the street to another company . They're far less likely to go do something else , because when somebody feels invested in , they feel known and they feel seen and they feel heard . And that is so important when you're leading other people . But it has to start with you saying , hey , you know what ?

I trust you enough to hand this to you and not stand over your shoulder the whole time while you do it . And , boy , this is something I coach so many of my clients on

, because they struggle so much with it .

It's basically people empowerment , but when they do well , they do so much better . Basically , yeah , right , and I worked in procurement consulting for a long time and that's all about like you know , which products do you sort of like centralize in purchasing and how do you distribute those products ?

So let's imagine , like everybody works from home yeah , at least a little bit still right . And in COVID everybody worked from home . Yeah , at least a little bit still right . And in COVID everybody worked from home . Let's say , a large organization like Heineken did not have an expense policy , so they would need to send out anything small .

Let's say somebody's mouse broke , so then somebody would need to go to the office to get a mouse . Right To the office , get the mouse . That's frustrating for everybody . If you just have a mouse right to the office , get the mouse . That's frustrating for everybody . If you just have a policy okay , hey , if your mouse breaks , this is what it needs to . Like .

These are the models that we suggest , sort of If you want another mouse that's more expensive , you have to pay the difference , whatever , something like that , and that saves . In the end that saves a lot of money . But for agency owners that also gives people more power . Some people want to have a .

You know , I don't even know what mouse costs , but you know , some people have very specific wishes about mouses . Some people have economic issues or are afraid for economic issues and they don't care spending 20 bucks more on a different mouse . Economic issues and they don't care spending 20 bucks more on a different mouse .

Um , yeah , so I mean for agency owners to have control about everything there . We , we , we send out mouses to everybody . That's maybe not the best example

, but if they break , I mean I don't care if they go to a shop , get a new one . Yeah , um , yeah , so it's like it's a okay , hey , do you really care about those things ? For somebody who , you know , has a lot of experience , it can be dangerizing , like to be that person that you described , william , 100% .

Right , they may still be a part of acquisition and sales maybe a bit , but really they've removed themselves from most of the day-to-day and they just have to occasionally check in with the team , provide some leadership , some high-level stuff , but they're really doing what only they can do and they're letting and hiring other people to do everything else .

Say , they're in that good spot and they want to start thinking about either exit or acquisition . What's their next step ?

But they also tell me that on a day-to-day basis they still think about their team , they still think about their operation . It was their life .

It's sort of the same feeling as a soccer player who retires at 39 , thinks about still being on the field . So really think about , okay , if you were to sell it , what's next ? You know , are you coaching others , are you gonna be an investor ? Are you gonna be ? And more often than not , you will have what's called an earn out .

So it's not like somebody thinks , okay , hey , this agency is worth , let's say , 10 million dollars because they really do well , no , it's usually , more often than not , it's like , okay , you will have an earn out , which means your performance or the , actually the performance of the , the exit will depend on the performance of the company in the next couple of

years .

Right , so it basically means effectively , that you will get a portion of that , let's say 30 , which is still good money but then , effectively , for a few years , you'll be working for somebody else , right , for the most part and not everybody is suited for that it will mean , like you might have to go with , you know , let's say , heineken were to buy your

agency , right , you would have to go with their expense policy . You would have to stay in the hotel that heineken has a contract with . You're not as free as you are today . So really think about like , okay , if I'm gonna do an earn out and I really you know how sick of my team am I right ?

Right , do I just need to go , like you know , the Himalayas for six months ? Or do I need ?

You know , like , because the money you will get for your agency , if it's like a 10x , of course it's 10 years of earnings , which is fantastic , right , but I mean , if you hold on to it after 10 years and let's assume it was flat and not decreasing , um , you would still hold on to your agency , right , that doesn't go forever , because life doesn't last

forever sure but what you sell is definite , right ? so , of course , if you , if you get a really good offer I mean , it's usually a good thing right now . The other thing you might want to think about is , like , if you're good at , let's say , google ads , right , you have built an agency .

That's fantastic in that , what are some of the additional skills you might want to invest in ? So google ads always need a good web developer , right ? So what is a good web development agency or sector ? You might want to either partner up with them or do some acquisition in that field or build an entire new team around that , right ?

So myself , in my case , parallel Apps is fairly running itself . I have a great manager in place . I'm still there , I mean , but it's more because I want to and I'm still in the process of like , building a little bit , but it doesn't cost me the full time .

So we , we build a new team which is called no code bandits , which is web flow and , yeah , primarily web flow , but it's like no code integrations and no code websites , where we think we can help a lot of people Right and and and to . Just I build it in a very small team and it's just given me a little bit of passion .

So it's more like okay , I guess if you're 42 , it's different than if you're 62 , right At 62 , you think , okay , I don't really want to spend more time in management meetings .

But really the first step is think about okay , if you sell , it's definite and nobody is going to give you a check , just in case , it's very rare , like it's , it's not going to happen .

And the other thing is , even though you know you might want to hold on to it , like if you're , if your stocks are still , if you still generate income , right , why sell if you don't have to do anything ? Everybody's dream , right , people actually buy houses to gain passive income , right , they want to get the rent .

So if you I mean right now , the houses are extremely expensive also because of that reason . But if you hold on to your agency , you can still get , you know , passive , almost almost passive income . It might not be a bad thing to hold onto it at some point . Now .

The other thing is , if you find , let's say , five other agencies that want to sell and they all have complementary skills , it might be a good idea that you find some sort of way where one operator operates the entire team , all the agencies , basically and that you sell together , because bigger means a higher multiple supplier and it's better .

It's a different market . Agencies who are making $20 million a year sell for a different price than the ones that sell for $2 million . It's just a fact , right . So there's opportunities there as well .

You're asking different questions and you're really diving deep to help people and business owners to understand hey , is this really where I want to go ? What's this going to mean for me ? What's it going to mean for my team ? What's next ? What's the next chapter look like ?

These are all fantastic questions that I'm afraid too many people don't ask and you'll never get the right answers unless you ask the right questions .

This is where your expertise shines and , neil , I really want to encourage any of the agency owners or business owners who are listening to have a conversation with you , because I think you're you're able to ask the questions that maybe nobody else is going to ask them , that maybe nobody else is going to ask them .

But , yeah , certainly it's always good to talk to people and think about like , hey , how should they bring in their you know , how should they think about the future ? Right , and that's where we've been doing helping a lot of agency owners .

Today I spoke also with an agency owner in Canada , coincidental and they're in the same sort of spot Like , hey , what's next for us ? What are we going to focus on ?

What are you doing to level up with the new leadership skills that your team and your business are going to need you to have ?

from . So when I started ParroLabs like in the beginning , I was still setting up servers and configuring them , and I'm not the best . It's called a DevOps .

I'm not the best , you know cloud engineer DevOps , but I can do it right , and you know , and that's not something that a CEO of a larger agency would typically do they would talk to lawyers , investors , things like that , right . So that's a different skill set , right ?

So now , the days that I was configuring servers at night , and those were very stressful as well .

So it's like everything has an advantage and disadvantage , but I think what you need to do is ask you on a not maybe daily basis , but on a quarterly basis , make a plan for the quarter and see if you're still the person that can lead that team to the next level . Right ? That's the question I I raised . I I have .

You know , I studied mba , uh in in spain , uh , about meanwhile , almost 15 years ago , and and none of the things what I was doing , the first let's say , five years , five years of Parro Labs had anything to do with the MBA . So the skill set that I gained in that program are valuable right now . Right , and there's a .

I mean you might not have to do an entire MBA , you might want to just do some leadership course . It could be online these days or some hybrid version , but that's what I would recommend is like do you still have the skills ? And , if not , you might want to consider hiring the next CEO , and there's no shame in that right . Many organizations did that right .

Many people think that Elon Musk founded Tesla , but that's not the case . There were two guys before him and one of which I met years ago that actually you know , and they actually founded that company and they thought they weren't suited and somehow they got in touch with Elon and Elon has been , you know , managing that company to the next level .

So no shame in that .

You know , so often founders can take a company so far , but it takes somebody else coming in to take it to a different level , because sometimes they're starters and that's a fantastic gift . That doesn't mean a starter has all the gifts it takes in order to go to a different level . And I love your illustration of Tesla .

I think that's fantastic , and there are so , so many others where a founder started it , spooled it up , got it running and built an organization that could go to the next level , built the foundation , and then somebody else can come in with fresh eyes , fresh perspective and a different gift , set and skyrocket .

He does not want to take all those decisions like you know , what color should the coffee cups be in the cafeteria , like those kind of things . Right , um and for sure that is . You know um , I've been there .

I mean , everybody's been that first person , because that is that's how you sort of you know , keep control , but that's not how you go further in the future , right , so yeah , that's right .

Is there a book in your journey that you have come across that has made a really big difference for you that you would recommend to other leaders who are listening ? Hey , if you haven't read this , you should check it out .

Like there is this spider in the web guy that does everything , sells everything to everybody , has no control over processes , and then he gets coached exactly on , like hey , okay , if you trust me , let's build a different agency right . I would say , like that book together with coaching has been phenomenal . Book together with coaching has been phenomenal .

Um , basically , like I would say , the biggest advice I didn't give anyone is set a time on the horizon , right . Set a timeline let's say january 2027 , right , where you want to be with x number of employees , right , and you want to have all your processes sorted right .

And if you buy that yacht or not , but , and if you want to sell , but you should be at the point where you can sell , right . So you're at the point where , okay , if I'm at that stage , I'm that person , I'm not taking any of these decisions , I have the team in place . If that person leaves , it's not damaging the agency other than for a few weeks .

We need to know on board that the next person basically we need to hire . If you're at that level , it's really really easy to you know you're in a good spot , but you gotta put pick a date , because if you leave it going , it will never pick that day it going . It will never break that day , you will never achieve it .

It's like if you're doing any course like a bachelor , you have four years to do it . It's not like forever be able to take forever . No , there's four years . There's X number of courses With a business . There's no course material but

you have certain steps . So I wouldn't say coach is is necessary , but an accountability body , like if you go to the gym , if you go with somebody , you're more likely to go . You have somebody that's holding you accountable , yeah .

Yeah , those are the methods I use most LinkedIn almost on a daily basis .

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