Build a Sellable Business: 4 Things Buyers Check First with Andrea Johnston

Hello and welcome to the Good Girls Get Rich podcast. I’m your host Karen Yankovich, and I am so excited to have a guest with me here today, who is Andrea Johnston. She is a seasoned entrepreneur and organizational leader with many years of experience scaling businesses, merging and acquiring companies, and successfully exiting founder-led businesses. And that’s what I want to focus on today with Andrea because I think women don’t talk about that enough: exiting your founder-led business.

So after more than a decade in corporate America and large agencies, Andrea founded Pure Communications, which she grew from a one-woman firm into a top integrated marketing partner for biotech and pharma companies with eight figures in revenue. After its acquisition by MountainGate Capital and W2O Group in 2016, Andrea merged her firm with a division of W2O, more than doubling its size and revenue. I can go on and on and on with her bio, but I’m going to bring Andrea on because I want her to tell you a little bit more about herself instead of just reading you word for word from her bio. So, Andrea, welcome to the Good Girls Get Rich podcast. Thanks for being here with us today.

Andrea Johnston: Thank you, Karen. It is such a pleasure to be here. I’m really excited for this conversation.

Karen Yankovich: Me too. Me too. And tell us a little bit more. I want people to know about you, so I think your bio is important, but at the same time, I want them to hear it from your words. So tell us a little bit about what happened in the last, say, decade or so that brought you to where you are today.

Andrea Johnston: Sure. Well, I think, like many women out there, you have a passion for something. Maybe you have a gift and a talent for something. For me, it was always communications. I’ve always loved storytelling. I’ve always loved putting voice to things that I thought were important. And for me, that was healthcare because connecting with patients was very important. Giving them information that they could use in their healthcare journey was something I felt really passionate about, so that was something I had spent over a decade, as you noted, doing in corporate America.

But ultimately, I decided if I was going to work that hard, I’m going to work for myself. So I branched out, started my own firm. We specialized in the life sciences. We built a phenomenal team. No one does this on their own; it’s about the people that you surround yourself with, and was able to sell to a PE-backed platform, as you noted. Then grew on that platform. We were able to sell again three plus years later for a much larger valuation, and then about almost a year after that, I really took stock in my life and my world, and decided I needed a career break.

I had been traveling every week, coast to coast, plus overseas. I was raising two children. My husband had retired when we did the first exit, and I really just needed to recenter and reconnect with the other things in my life that were really important, and so that was really a transformational decision on my part. Little did I know that I agreed to stay for a few months to help with the transition and name a successor, and literally two weeks after I left the firm, we hit COVID, and so we locked down.

And I always feel like someone was looking out for me. The fact that I had left my job and was able to focus 100% on my family during that very challenging and very uncertain time, I feel like was such a gift. And it also allowed me time to really focus on my well-being, focus on other priorities and things that were important to me, outside of my work identity, which had been my identity for so long.

After that career break and taking time, got my kids off to college. I needed to build again, and now I run Fuel for Female Founders, where we are all about amplifying and sharing stories of successful female leaders. We are all about investing in women-owned businesses. We advise women on how to grow and scale their businesses, and we really believe in the importance of community and collaboration.

Karen Yankovich: That sounds amazing, and I do think there are so many things that you just said that I want to kind of run with. But I think a couple of things are important. One of the things that you mentioned is we don’t do this alone. And as women, I find—listen, this podcast is called Good Girls Get Rich, so of course I focus on women. But I focus on women not because I care what your body parts are or how you identify. I focus on women because I don’t think women—we spend too much time going, “I got this,” and not enough time as a gender building the support team that we need probably in many areas of our lives to really have the kind of success that’s out there for us.

And you mentioned COVID, and I remember one of the things that stood out for me in COVID. I have a couple of kids too, and some of them are grown, and I think my sons are very progressive and very much more involved in their families than their father was just generally generationally. But I saw during COVID that my daughters-in-law were still managing the schedules and still managing the things, and just from a brain space standpoint, that’s a lot. That’s a lot.

So we’ve come so far and still there’s a lot to go. So I love that there’s people like you that are helping women understand that if you want to have the success you want to have, you have to build the team. And I believe that the monetary successes that we have fuel our personal lives. Like if we want to have—it’s not just about “I want to be a millionaire.” It’s about, “God, wouldn’t it be great to be able to take the kids to Disney World?”

I remember going into ChatGPT recently. I have four kids and six grandkids at one point, and I remember going into ChatGPT and saying, “What would it cost if I wanted to take everybody to Disney World?” I was like, “My God!”

Andrea Johnston: Buying a house, right?

Karen Yankovich: And then wouldn’t it be nice to just be able to do those kinds of things? We want to do them, but if we don’t build those support systems around us, then we’re still in the same places that we’ve always been.

Andrea Johnston: I couldn’t agree more. I believe too that sometimes we as women, if we’re running a business, we’re focusing on scaling our business, and we forget to scale our life to keep pace with our business. And I have a good friend who breaks it down in her world as: do, delegate, drop. What am I going to do? What am I going to delegate? And what am I going to drop? Because it really doesn’t serve the priorities and the focus of my life or my work right now. And that framework has stuck with me because I think it is such a simple but really clear way to think about how to scale your life and your work because you have to do both to be successful and to feel fulfilled.

Karen Yankovich: Yeah. So let me ask you this: as I look back at the last couple of years, I feel that from my perspective, marketing has changed a lot, and the things that used to work in my business and in many of my clients’ businesses are not really working anymore. And for me, I always look back to what still works is what’s always worked, which is: who do I need to know to get this opportunity, to land this opportunity? Like, who are the people that I need to know? Who do I need to be in the room with to get these opportunities?

So I feel like that still works. But that being said, you’ve done this three times now; you’ve reinvented your business successfully three times now. What would you be looking for to move forward? Because we can do all the things, but we still have to market and get the business right. So even if we put all the SOPs in place and the marketing plans and the business plans in place, so many businesses are struggling with marketing and client acquisition right now. So what would you be saying to somebody like that, that’s saying, “Okay, I hear what you’re saying, Andrea, and before I can sell for eight figures, I have to make six figures or a million dollars a year”?

Andrea Johnston: Well, you know, Karen, it’s funny because I have listened to several of your podcasts, and I think your advice is fantastic. Which is, things like LinkedIn, which didn’t really exist in a meaningful marketing way when I started my agency back in 2004, those platforms have become so important to marketing, so important to building thought leadership. And I love a line that I heard you say, and I want to get it right. It was something about how you don’t necessarily need a bigger audience; you need someone else’s stage.

And I think that that is such an important piece of advice because part of what works is building community and collaborating, and that includes online as much as it means offline. I’m a big believer, like you are, in building your network and having those strong relationships. I’m also a firm believer that they can’t be transactional and they can’t be a one-way street. You have to build real relationships, and that’s why I also think you need to be thoughtful and curate your network.

I’m a big fan of the advisory board concept. Who’s your personal advisory board? Who’s your professional advisory board? And how do you engage with them? And what do you give as much as what do you get? So those are some of the things I think are really important when people think about marketing.

I tend to break it down into people, process, and pipeline. Who are the people in your network and in your world, including the people that you’re going to hire and train and recruit to be in your business? But who are also the people you surround yourself with that will be referrals that will help you build business? There’s process because to your point, you still need SOPs, you still need that process, you need systems, but they can’t be everything. And then you need a pipeline. You need to constantly be building your funnel, even if you don’t convert immediately, which rarely happens. You have to be constantly building that pipeline, thinking about what’s next. Who’s going to be the replacement client when somebody walks out the door? I’m always encouraging my clients to be thinking about pipeline development and BD forecasting because those are disciplines that really help you build a sustainable business, which is critically important.

Karen Yankovich: That is really important. So let me ask you this: I want to get to creating a business and also understanding that you can sell a business, or you can have a business acquired. But at the same time, when you started Fuel for Female Founders, did you have a framework for this business in mind that said, “Okay, in my experience, if I frame it like this, or if I create it with this kind of framework, I’m going to have more success”? I’m going to be able to build it faster than another kind of framework, right? Because a lot of female founders are doing consulting and private advisory work and things like that, and that’s where they get caught in that client acquisition hamster wheel. So, what were you thinking as far as how you wanted to organize your business when you started Fuel for Female Founders?

Andrea Johnston: So, my vision for Fuel for Female Founders has always been more than client advisory. Quite frankly, it is a platform, and I look at it as a combination of passion project and impact project. My goal is to really create change in a systemic way. And how do you do that? I think it’s by being a media company and providing a platform for amplification of women in leadership. What does leadership look like? What is the path to get there? What do you have to do to run a successful business? What does an exit look like? What does an acquisition of a business look like? All of those things are key topics that we try to cover from a media standpoint.

Then the other pillar of connection: creating community, bringing women together in person in small groups of 10 to 12 to really talk through key issues and mentor each other and create meaningful connections outside the room. I’ve never been a joiner. I don’t really do well in big, large communities where it’s difficult to navigate. I have found real value in smaller settings where there’s no barrier to getting involved and getting engaged. And outside the room, it can be as intense or not as you want it to be.

The third pillar for me is really investing in women-founded businesses. I want women to have access to capital, and that’s very difficult. We know that less than 2% of venture capital goes to women. So I think that’s another key part of the ecosystem.

And then the last thing is really the advisory work. So it’s kind of the last part of the platform, and it is important. But to me, it’s a very specific type of client that I can work well with. I really believe in investing in people, and I want them to invest in my process and be willing to go all in, and that doesn’t always work for everyone. So I’m not about quantity; I’m really about quality because I want to have the greatest impact that I can across all of those pillars.

Karen Yankovich: I couldn’t agree more with most of what you said, and I think what I want our listeners to hear about that is, you can be choosy about who your clients are. I had a conversation just today with somebody whose passion—she’s got this massive passion for a segment of the population that is just known to not have a lot of cash. And then she’s got this amazing skill, and I’m like, “Wait a minute, you can be picky and choosy about who you work with with your amazing skills, so that you’ve got the cash to be able to support this community that is known to not be flush with cash. If you focus solely on the community that’s not flush with cash, you’re going to stay in that hamster wheel. But there is an intersection where your passion and the impact you want to make in the world can be paired with a higher-ticket advisory service or sponsorships for your media platform. There’s lots of ways to create meaningful revenue.”

Andrea Johnston: Yes!

Karen Yankovich: And that way, you’ve got the cash to be able to make the kind of impact you really want to make. In our She’s LinkedUp program, which we’ve been running for like 10 years, I had a Zoom call at the end of the year with about 10 people in the room. I went around and asked, “What are you looking to do in this upcoming year?” Every single solitary woman had an impact goal. Nobody said, “This is going to be my million-dollar year.” But here’s the thing: if you want to have that kind of impact on the world, you might need to have a million-dollar year. Let’s work on that so that you can have that kind of impact. So they don’t have to be mutually exclusive.

Andrea Johnston: They can’t be, actually, because they have to work together. I agree.

Karen Yankovich: Right. You have that big thinking. Did you always have that big thinking?

Andrea Johnston: It’s funny because both of my parents worked for the state. They were not private business people. I didn’t have an entrepreneurial role model in my family.

Karen Yankovich: Same. My parents were teachers.

Andrea Johnston: My mom was a social worker, and my dad was in the community college system, but they both had a very strong sense of community and civic engagement. And so, I wanted to be successful. I’ve always been very driven, but I also have always wanted to make sure that I was giving back or bringing people with me. What I’m grateful for in my journey is by working as hard as I did, building the companies that I built, and having the exits that I’ve had, I am able to contribute to the community in another way. I can really invest in programs and projects that make a difference in the areas that matter to me and to my family, and that has been one of the most rewarding parts about running and selling a successful business. Getting another car, getting another this or that—that’s never been what it’s about for me.

I really love the idea of being able to drive change and to impact people’s lives in a substantive way. I’m on the board of an organization where we focus on affordable housing and data to inform other nonprofits about what’s needed in our community for economic mobility for the people at most risk. That’s the kind of work that I think is so important. And when you’ve been successful, it’s incumbent on us to find ways to engage in that way and make a difference.

Karen Yankovich: It’s amazing. All right, so I want to segue from that then, because I too grew up with parents with pensions, and I don’t have a pension. My family doesn’t understand that, but they don’t need to. What I have is this business that I’ve created, and it took a long time for me to get through my head that this business is an alternative to a pension.

So talk to us a little bit about how, if we’ve got this female-founded business, we can start to shift our minds around that. Once I realized that, I made some back-end changes to my business so that things choose not to be so dependent on me to be successful. What can we start doing today if somebody is like, “Huh, I never really thought about it like that”?

Andrea Johnston: Well, first of all, you hit the nail on the head. Women, for some reason, are not comfortable talking about wealth. We’re not talking about monetizing assets in the way that I think men historically have. So, first of all, we need to have more of those conversations.

Secondly, if you’re a woman running a business and you’ve been running it for a few years, seeing momentum, you have not only strong revenue, but most importantly, good margin—really good margin. Margin is really where the magic happens for buyers, so never underestimate the importance of profitability and margin.

There are a lot of things to think about in building a sellable asset, especially in professional services. You need to think about client concentration. You shouldn’t have one client that dominates your P&L. Buyers do not like that; they like to see client diversification where you have many clients making up your revenue.

It’s really important to have that strong margin so they see you know how to run a profitable business. The third thing is: what are you doing from a systems perspective to productize and to innovate? How repeatable is what you’re doing, and what kind of a team do you have around you? If you are the sole breadwinner and business developer for your business, buyers don’t like that. They want to know that there’s scalability and succession planning, and that you have built a team capable of bringing the business forward.

I also would encourage people to remember that an exit doesn’t necessarily mean an exit. I sold my business and went on to work at that platform and build something even bigger, beyond my wildest dreams. When I left, I was running over $150 million in revenue, overseeing 600 people across the country and 13 offices. I loved it. That’s why I wanted to sell: I wanted to be part of something where we could grow it even bigger than I was capable of investing in at that point.

I would also love for women to realize they can be buyers. All too often, people see the sale as them selling to someone else, but a really great lever when growing your business is acquiring someone else’s business or doing an “acqui-hire,” where you acquire a team that can tuck into your business and drive growth in a new capability or technology. Women are sometimes hesitant and conservative to do that, but it is a tremendous path available in building your business.

Karen Yankovich: I love that, and I almost want to equate that to the “Borrow the Stage” mentality that I talk about. Other people already have these stages, so why try to build an audience one at a time when you can get in front of an audience someone else built? You’re taking that same concept and saying, acquire a department or company that already exists before you decide to build it one step at a time. I love that.

Andrea Johnston: 100%! That was my strategy when I sold. I knew we wanted data and analytics, a European office, and a stronger West Coast presence. Growth in client acquisition was not the problem; it was having all the other pieces to allow us to grow in new ways and diversify capabilities on the right foundation. And that’s exactly what I got.

Women need to think about what they want when they sell. If you want to exit completely, you need to find a buyer comfortable with you leaving and ensure you have the team to keep it going. If you are looking to fill specific gaps, make sure you have that checklist and entertain buyers who fit it.

I also think women undervalue their business. Somebody comes knocking, says, “Hey, I’m interested, let’s sign an LOI,” and a year and a half goes by without a deal. Hiring an investment banker, advisor, or broker can be game-changing for your valuation and multiple. Don’t be afraid to make that investment because it can reap significant benefits down the road.

Karen Yankovich: Yeah, when I changed that mentality, I had a conversation with my accountant and said, “I want you to look at everything I do as if I want to sell this business in five years.” He said, “Oh my God, I wish more people said that to me, because usually people call me saying they want to sell in five months!” Creating that foundation today allows you to build like a true business owner. When I shifted my mindset to that, it changed everything for what we did.

Andrea Johnston: When I did investor relations, I used to tell private companies: it’s never too early to think like a public company, because the things that make you a great public company will make you a very successful private company. It’s always better to ask for money when you don’t need it than to have your back against the wall. Plan ahead from a position of strength and growth where you can say no to offers if they aren’t what you want. It’s going to make you a happier, more profitable, and more successful business owner.

Karen Yankovich: Can we get into the nitty-gritty a little bit here? What haven’t we talked about yet that you think is important in building a strong, profitable client service business?

Andrea Johnston: A profitable client service business starts with a really strong understanding of what your service is, and you need to be about solving client problems. Sometimes service firms get all caught up in tactics and execution, and lose sight of how they are adding value to the company’s business. What is the ROI that gives you the stickiness to increase your rates or package pricing? It all starts with trust and a relationship that adds value. Keep your eye on the prize: what is the problem you are solving, and how do you demonstrate that value repeatedly?

Karen Yankovich: I love that. How important is it that you actually identify not just the service and value, but who it’s for?

Andrea Johnston: Having your Ideal Client Profile (ICP) is critically important. But this is also where scale is crucial. If you don’t have a team capable of providing the value you’re selling, you will burn out. You have to train and hire talented people—in some cases, people who are smarter than you. It’s the only way to move a business forward. If it’s still all on your shoulders, you’re just an employee, not a business owner.

Karen Yankovich: If you were going to start a new business today, what kind of business do you think is profitable with high margins in this crazy world we’re living in right now?

Andrea Johnston: You’re going to laugh because it’s not sexy, but I would say: go buy an HVAC company, do extermination, or do electrical and plumbing. Because guess what? Those brick-and-mortar basic businesses are the things we all need to keep the lights on, the toilets flushing, and the refrigerator running. Skilled trades are declining, so there’s a tremendous opportunity. Many are owned by an older generation without a technology backbone, so there’s a huge opportunity to improve profitability and invest in training.

Karen Yankovich: My gosh, I love that! So what do the next 6 to 12 months look like for Andrea?

Andrea Johnston: I am a big believer in women leading in all spaces, including politics. I am looking at how we can get more women elected into office who support policies that protect and advance women. We are 51% of the population, and we should see that representation everywhere decisions are made. You can also look to see what I continue to do with our podcast at Fuel for Female Founders as we highlight women in leadership, corporate leaders, founders, and investors. We will also continue investing in exciting women-founded businesses with compelling value propositions.

Karen Yankovich: I definitely want to share the information on your media platform in the show notes. Also, as I was doing research on you, I saw the St. Joe line of skincare. What is that all about?

Andrea Johnston: I recently invested in St. Joe, a non-toxic skincare line founded by Elise Cirillo. I love that she focused on overall health, well-being, and creating a simple ritual for yourself. Everything is numbered so you don’t waste mind space wondering which serum goes when. It’s beautifully packaged, works so well, and Elise is such an incredible, visionary leader. I believe in investing in the product, but I’m also investing in her.

Karen Yankovich: How do we check that out?

Andrea Johnston: You can go to shop.stjoe.com, or find them on Instagram. You can find the link right through their Instagram[cite: 21].

Karen Yankovich: Awesome, we’ll link to all of that below[cite: 21]. Andrea, this was such a great conversation[cite: 21]. I certainly am a fan of what you’re doing, and I really appreciate you taking the time to hang out with us today and introduce these concepts[cite: 21].

Andrea Johnston: Thank you for everything you are doing, Karen, to bring voice to women and encourage them to embrace who they are and bring that publicly[cite: 21]. I’m grateful that you create this platform[cite: 21].

Karen Yankovich: You’re welcome[cite: 22]. We are united in the fact that women’s voices need to be heard more[cite: 22].

Andrea Johnston: We have the voice, and we have the vote[cite: 22]. Don’t forget to vote!

Karen Yankovich: Right there with you[cite: 22]! Thank you so much for being here, Andrea[cite: 22]. Everyone else, we’ll be back here next week with another episode of the Good Girls Get Rich podcast[cite: 22]. I’ll see you then[cite: 22].