Should I give up $200k?
30sRelatable financial dilemma for entrepreneurs deciding between two profitable ventures.
▶ Play ClipAI Summary
A business owner with a law firm and a side agency generating $200k EBITDA seeks advice on whether to shut down the agency. The conversation explores the opportunity cost and presents a strategic exit plan involving client referrals for kickbacks.
[00:02]
Business Snapshot
The agency has $450k top-line revenue and $200k EBITDA; the owner also runs a law firm.
[00:15]
The Dilemma
The owner is reluctant to give up $200k annual profit from the agency despite the law firm earning significantly more.
[00:31]
Opportunity Cost
The advisor questions whether the extra $200k is worth the 30-35 hours/week when the law firm earns seven times more.
[00:45]
Exit Strategy
Advises stopping new clients, giving a 6-month notice, and negotiating referral kickbacks with competitors to monetize the client book.
The best approach is to phase out the agency over 6 months and monetize the client list through referral agreements, turning the exit into an ongoing income stream.
Study Flashcards (4)
What is the agency's top-line revenue?
easy
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What is the agency's top-line revenue?
easy
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$450k
00:02
What is the agency's EBITDA?
easy
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What is the agency's EBITDA?
easy
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$200k
00:02
How many hours per week does the owner spend on the agency?
medium
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How many hours per week does the owner spend on the agency?
medium
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30-35 hours
00:15
What strategy is recommended for exiting the agency?
hard
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What strategy is recommended for exiting the agency?
hard
Click to reveal answer
Stop accepting new clients, give 6 months notice, and negotiate referral kickbacks with competitors.
00:45
💡 Key Takeaways
📊
Profitable Side Business
Concrete example of a side business generating significant profit, setting up the dilemma.
00:02
🔧
Referral Kickback Strategy
Creative way to monetize a client list when shutting down, turning loss into passive income.
00:45Full Transcript
[00:02] do 2.5 million. What's the bottom line? About 500. I also myself operate a law firm. >> Okay. How much does the agency make? >> 450 top line, 200 EBITDA.
[00:15] >> So, do you not want to full-time market into your wife's law firm? >> It's tough to stop something that's making $200,000 in my pocket every year. agency? >> 30 to 35 hours a week.
[00:31] making, you know, seven times as much money, do you think extra 200? >> I guess my my problem is like how to I guess. >> Yeah, yeah, no, it's a great question.
[00:45] amazing time. You guys have been loyal clients. I just want to let you know two things. Number one is we stopped accepting new customers. And number two, out over the next 6 months. And so, I wanted to give you guys 6 months. We'll
[00:57] continue levels of service for this period of time. Also, I have three this industry I think will do a good job. And then you negotiate deals with those guys to give you kickbacks for all this book of business, and you'll
[01:10] year just from referring the business out to those guys, which they'll happily out to those guys, which they'll happily do."
