Revenue Durability: Why a Smaller Top Line Can Be Worth More When You Sell with Betsy Westhafer

Welcome to the B2B Growth Blueprint podcast, where we talk with entrepreneurs, founders, and leaders at B2B services, tech, and SaaS companies to learn the systems and processes they've used to create success for their business. And we'll also learn from marketing and sales experts to provide insights to help you grow your business. I'm your host, Mark Osborne, and the podcast is brought to you by Modern revenue strategies and their 10x ROI B2B growth guarantee. Schedule a free diagnostic call to learn the fastest path to double your B2B revenues in just 90 days. Hello and welcome to another episode of the B2B Growth Blueprint podcast. I'm your host, Mark Osborne, and today I'm very excited to welcome my guest, Betsy Westhafer. Now, Betsy is the founder and CEO of the Congruity Group, and she's the creator of the Revenue Durability Framework, which is a new approach to helping founders and business owners build more stable, scalable, and transferable revenue systems. She's an award-winning entrepreneur, co-author, podcast host, and recognized leader in customer engagement and business growth. She's been honored with both the International BBB Torch Award for Ethics and the Dayton Chamber Entrepreneurial Excellence Award. And she's now helping advisors and founders rethink how customer capital impacts their enterprise value, their scalability, and their readiness for exit from the business. So, Betsy, welcome to the show.

Thanks. I'm so happy to be here. Thank you so much for the invitation.

Yeah, absolutely. So, we've got some fun topics to talk about related to revenue durability and some of the work you're doing. But before we dive into those topics, why don't you give our audience a little bit of background? Tell us some of the twists and turns of your career that brought you to where you are today.

All right, will do. Well, I started off being a stay-at-home mom for 12 years.

Okay.

So, I got a little bit of a later start on my career. Wouldn't have traded it for anything, but had a lot to learn once I went back into the workforce. And I did several things that I enjoyed that were family-friendly. And then once my kids were all in school, I started working for an organization that did customer advisory boards for big enterprise corporate entities. And I loved the work, and I got to travel around the world and be in boardrooms hearing all of these conversations under NDA with the C-suites. It was an education of a lifetime. I really fast-tracked from having that experience, and it was wonderful. However, at that point, I was traveling so much, and I was gone on Friday nights, and my son was— my youngest son was a senior in high school, captain of the football team. And I was like, I'm not missing Friday Night Lights. No way. And so unfortunately, there wasn't a path for me within that organization to not travel as much. So I ended up doing some local work. I was the business development director for an organization that managed what they called the Entrepreneurial Signature Program for the state of Ohio. And that was amazing. It was tech. I was just basically getting to do Shark Tank stuff, look for people to pitch and then introduce them to the fund holders and that kind of thing. So that was super fun work. And then I went to an organization called Aileron, which is an amazing place built by Clay Mattil, who was the founder of the Iams Company.

Okay.

And he sold it to Procter Gamble for $2.2 billion cash Sole owner, and so he brought built this amazing entrepreneurial education center just north of Dayton. So I got to work there for a while, and then from there I co-founded a business in the legal technology space. I was there for a couple of years, decided that's not where my head and heart were, and so I had this really good former colleague of mine. who, when I was trying to figure out what's next, I ended up selling my interest in that business to my partners. And I was trying to, you know, I was kind of the typical entrepreneur where it was shiny object, shiny object, shiny object. I was all over the board and she's like a left-brain spreadsheet kind of girl. So she settled me down and she said, hold up. She said, out of everything you have done, where do you feel like you made the biggest impact? Which I thought was such a great question to ask somebody in my, you know, headspace. And I said, oh, for sure, doing customer advisory boards. That was just the highlight of my time and we made such huge impact. She goes, well, why aren't you doing that? And I was like, yeah, why am I not doing that? I hadn't thought about going back and doing something I had already done. I was thinking about what's the new next shiny thing. And so I started the Congruity Group, which we are celebrating our anniversary in May of 2026. And so our 11th anniversary. And so anyway, Anyway, that's where I've been. So for the last 11 years, I have been working very much in the same space with big enterprise, doing strategic customer engagement programs with C-suites and the C-suite executives of their most strategic accounts. And I've loved it, and I have gotten to travel the world again and do all the fun things that I got to do before. However, I would say in the last 3 years or so, it's just been more and more challenging. I think a lot of decisions are being made by bigger and bigger committees, and that slows things down. I think, you know, everybody says, you know, budgets are tight. And so anyway, it just made it a big, huge pressure on my business. And as a small, you know, small company, it was really, really tough. And about that time, I was talking to my mentor late last year, and he told me about the CEPA program. And so I dug into it. I was like, I don't know where I fit in that space, but I'm really intrigued. So I took the exam. Or took the course, took the exam, loved it. And then when they were talking about this intangible capital, which I know you talk about quite a bit, in the customer capital bucket, I was like, ah, there's my lane. So I got very, very focused on what can I do that can leverage what I did and what I learned and what I can bring from my experience in big corporate and bring it to the low to mid-market in a way that's affordable, impactful, not overwhelming, Don't need a million people to execute that kind of thing. So that's where I've been for the last few months is designing that. So we have what we call it the RevSet model, and it's advisor-led but tech-enabled. So there's still some human touch to it, some human expertise involved, but also leveraging technology so that we can do this in a much more cost-efficient way than we were able to do for big corporate.

Part of the RevSet model that you've been working on, I know you talk a lot about sort of revenue durability, and you and I have chatted about that, but our audience may not really know what does that term mean? What does revenue durability mean? Tell us a little bit about what you mean there.

Yeah, so I think it's really interesting that when people talk about exits and entrepreneurship and you see all the big headlines about they grew 200% year over year and all of those things. It's so much focused on the revenue and the growth, but it's not about, you know, yeah, but their retention rate is horrible and their customers are flat as far as the value of the account and all of those things. So it has to do a lot with that, but also the risk factor, like customer concentration. Um, you know, you've got way too much money coming from just a few accounts. Um, there's so much risk involved with that. A founder or a key person dependency where if somebody leaves, it can have a massive, massive negative impact on the revenue. And so how do you put some things in place and operationalize those things where you get it kind of on autopilot so that you are one, aware of those dangers and those risks, but also doing something on the daily to mitigate those risks and being very proactive active about it. So it's not just about revenue growth, it's about how solid is this revenue. And fast forward to when you're sitting at the negotiation table with a potential buyer, they want to know that that revenue is going to transfer with them after the transaction. And if it's too dependent on certain customers, too dependent on a founder, too dependent on ad hoc initiatives, and, and you know this as much as anybody, people throwing spaghetti against the wall in the marketing realm, like, oh, we got to do more marketing we're losing our accounts. So much deeper than that. And so, so that's really what I'm talking about is how do you make that, that revenue so buttoned up that the buyer will see it as a real opportunity to not, frankly, not pressure the price down?

That's right. Well, and so I've had really interesting conversations with like CFOs and valuation experts and folks that are doing, you know, sort of quality of earnings. And interestingly enough, A business with really undurable or fragile revenue that has a higher top-line revenue number is actually worth a lot less than a business that might have lower top-line revenue, but that revenue itself is much more durable because— and I use sort of like 4 measures of that durability— is it repeatable? Can you do that over and over? And, or, you know, are you getting— and it's, you know, sort of episodic. Is it going to, you know, consider— continue with the business after that founder exits or you get an investment round or whatever it might be? Are you going to retain it or is it dependent on, you know, on a founder that's going to leave or a salesperson that could hold you hostage? And do you have a strong return on investment for that revenue? Or are you upside down? Are you losing money for every, you know, client you bring in because you're, you know, sort of running on runway like a venture-funded company? You know, those 4 things really give you much— a lot of visibility into how durable that revenue is and what really drives the valuation of the company. Whereas, you know, a company with a lower top-line number but more durable revenue is worth more than a company with a bigger top line number. So it's so interesting that you call that out.

Yeah, I think too, the other thing is it's just, you know, like we, we've learned at CEPA, it's just good business strategy. And you think about maybe it's not the founder having all these relationships and choosing to leave. Maybe it's the founder is having a health issue and, and can't participate, or maybe it's, you know, something more distressing than that, um, that kind of comes out of the blue. So it prepares you no matter if you're, you know, 6 months from a transaction or 6 years or more. It's just so important to make sure that you are de-risking and kind of putting that moat around that revenue because things come out of the blue. And, you know, I've had an experience twice in the last 2 years where I had to step away from my business. Um, we had a family health challenge and I had to completely check out. Luckily, I was teed up in a way that I was able to do that for several months apiece. And so, you know, it's not always because somebody just chooses a decision. Sometimes it's thrown upon them. And so just protecting against that, and I would think that would make the founder and all the employees and leadership team sleep a lot better.

That's right.

Knowing that, you know, we'll be okay if somebody has to step out for a while.

Yeah. Well, and There's so many things there. And the first is that I saw the statistic that 50% of all businesses will be forced to sell when they're not prepared to sell. And that's either through disease, death, divorce, disagreement, or even just sort of failing performance. And that doesn't even take into account Those opportune phone calls that come from private equity saying, we think you're running a great business and we'd like to make an offer. But if you haven't taken the time to do some of those things like reducing founder dependency and customer concentration, A, you might not be able to sell. Something like 80% of businesses that try to sell never do. Or B, you might not be able to take advantage of that opportunity when you get that unsolicited call from private equity, you won't know how much your business is worth. You won't be able to command top dollar. And so, as you say, you know, exit planning is just good business planning.

Yeah. And I think there's a lot of— oh, I'm sorry, I didn't mean to interrupt.

No. Yeah.

There's a lot of emotional stuff attached to PE coming in and saying, you're just the best and we want to buy your company. And then they get kind of excited thinking about it, and then it distracts them from the business at hand.

That's right.

Kind of a cycle that can really lead to a not great position. And then they start telling their friends and their family they're gonna sell and private equity and all the things. And then it can really be distracting. And so if you have a good idea that you've got a good business, the revenue is solid, you're not gonna get that pressure to, you know, discount the value. Then you're in a much better, stronger position at the table.

That's right. That's right. So I saw this statistic that according to Axial, which is a platform that connects a bunch of private offices and private equity firms, family offices and other investment advisors, 46% of deals in the lower middle market that fall out even after there was a letter of intent signed, the reason that they fall out It's not due to the underlying finances. It's not due to legal issues. It's actually due to revenue systems. And 2 of the biggest issues that cause that are things that you've already touched on, which is that founder dependency, that sort of key person risk, or customer concentration, where most of the revenues are coming from just a small number of customers. Talk to us a little bit about ways that you sort of see companies mitigate that risk so that it won't derail the deal and ways that they can, you know, sort of prepare for that or move against that.

Yeah, it's taking a step back before I go into my thoughts on that. I saw the article that you recently posted about revenue systems and all of that. And I want to commend you because I think a lot of what will help all of this for these business owners is education. I think there's a lot of We didn't even know customer concentration was an issue. We don't even know what that means. We never thought about the founder ever maybe involuntarily leaving, let alone voluntarily leaving. And so I think there's just so much education that needs to be done for low to mid-market companies because they're busy building their businesses. They're not thinking at that level because they're wearing a lot of hats, most of them, and it's their baby. And, you know, they don't want to think about bad things happening to their baby. And so I think you know, it starts with education, and I have big designs on being a part of that. I mean, we've experienced it in our own family where 20-plus years ago, we actually liquidated a business because we didn't know what all our options were and we weren't teed up for options. And now that I know what I know, I'm like, oh man, I want a do-over on that one, you know. And so it's a little bit personal for me to want to do a lot of this education. I think too, with AI and the way jobs are changing and markets are changing and all of that, you know, there's a lot of angst. So I think putting the spotlight on there are things you can do to mitigate a lot of these risks, but you have to take the time. You have to invest in experts that can help you. This is not a solo game trying to get this, you know, to a point where it's revenue durable. And it's not just us, it's other people that come in and So yeah, I think, you know, thinking about some of the things that can be done, you know, is talking to other business owners that have done what you're setting out to do, talking to experts, getting on webinars, you know, just trying to understand this world a little bite at a time. If you don't, if you're a business owner and you don't have a ton of time, to really dedicate to this right at this moment, carve out, you know, a Friday afternoon to just learn, learn, learn, learn about how do I make this revenue more durable? What are the things I don't know that I don't know? And, and really invest the time. And if you're capable, the money to really learn from the experts so that you don't find yourself in this really bad position. And, you know, I think the other thing that I'm super passionate about is just thinking about what's referred to as a silver tsunami and thinking Yeah. I mean, it hurts my heart thinking about all of these founders, mostly in the boomer age, but, you know, other founders that have put their heart and soul and, you know, family lives on hold to build these businesses. And the statistics that you quoted are not in their favor. And if they don't have a sellable, transferable business, all of that goes away. And then that causes all kinds of economic problems for our country and, and social issues, you know, and families in angst because the business didn't prove out and there's no money at the end of the day. And, you know, it's just there's so much involved in this $10 trillion wealth transfer in the next decade. And I think as people in this arena, it's incumbent upon us and it's our responsibility, honestly, to do as much as we can to help these business owners, including getting them educated.

Yeah, well, I was talking with an advisor the other day, and they really sort of like, if you open the aperture a little bit, and they were talking about this, not only all those businesses and their families, but think about like the supply chains that are really driving— most of America is driven by these small businesses, these Main Street businesses where you know, if this company folds, not only all the people that were supplying them, you know, sort of resources, will they take a hit, but also the downstream folks that were relying on those services will take a hit. There's a big sort of web of the kind of local economies that are really at risk.

Absolutely.

If these businesses don't have successful exits and they're able to transfer to the next generation, whether that's the next generation within their family or the next generation of owners that, you know, might be a strategic buyer or even private equity that will continue to run it and continue to fuel these sort of communities and economies. It's a, it's a really sort of a scary thought.

Yeah, absolutely. And you think about the people that lose their jobs and the tax base and, you know, just there it is. It's very, very daunting to think about this huge wave coming. That, you know, it's going to be a lot of that if we don't get out there and really try to help these business owners.

Yeah.

And what's really cool is there's a community of people that want to do that. You know, that's right. The exit planning community and industry is growing month over month over month over month. And that's exciting. And even— and that's what I love, I think, about the CEPA community and where you and I met is nobody's feeling competitive because there is Plenty of work to go around. And so that's good. I think a lot of people are very passionate about the idea that this impacts our country. This is really important work. And it's daunting work.

So one of the things that you and I have talked about that is worth sort of double-clicking in on is, you know, the idea of durable revenue comes from having systems. And there's some sort of added benefit to having those systems, which is you you take out some of the sort of worst parts of running a business. And we've talked about sort of no heroes and no hustle mode. Like, you can't build a business that's 100% dependent on one person grinding it out 80 hours a week, whether that person is the founder or someone else. And likewise, you can't build a business that's reliant on hustling where you're just stacking tactics on tactics on tactics, which means more people to do it and just more running ragged and running crazy, but instead focusing on, you know, sort of building systems, uh, that, you know, sort of leverage that and turn it into a much more, you know, viable, uh, process. Tell us a little bit about how you approach that with the RevSet and that sort of durable growth approach, uh, for revenue.

Yeah, so, um, I think you're absolutely right and you hit on a couple of keywords, leverage being one of them.

Yeah.

And certainly systems, and that takes out a lot of that hustle. And so what we do and advocate for is how do you operationalize this customer engagement, this customer cadence so that it's not hair on fire reactive mode, but, you know, what are we doing to really focus in and grow these accounts? What are we doing with this client that is at risk and not waiting until it's it's too late to repair it and having those systems in place so that it's not somebody thinking, oh, we should do something about this account that's about to go, you know. And so that's part of it. And then the other part is creating advocates. And I've got a great story if you don't mind if I share this.

Yeah, please do.

This is a real-life thing that happened with a client of ours. They were a big client in the distribution logistics fulfillment space. And they had come to us and wanted to start a customer advisory board with the C-suites of major retailers around the country, all of them you've heard of. And so we, we assembled that board and we were having the second meeting of the board, but one of the CEOs with a very well-known brand was sitting at the table and he was pretty quiet during the whole meeting. And at the end of the meeting, everybody's in the boardroom packing up their stuff and saying their goodbyes. And the chief commercial officer of our client came up to me and he goes, you're not gonna believe this. You're not gonna believe this. And I said, what's up? And he said, this one gentleman came to him and he said, you don't know this, but we've spent the last year putting our plan together to move away from you. We've got a 3-year contract. We've got a year left on it. And we have spent the last year talking to your competitors, planning our transition away from you because it's a big deal for a retailer to switch providers. And he said, And the only reason I accepted this invitation to come to this meeting is because I wanted to hear what you guys had to say for yourself, because we have not been happy. We don't feel like you care about us. We don't know what's going on. And he said, after this meeting, I can tell that you are very passionate about your customers, that you do have capital expenditures that are going to align with, you know, where we want to put distribution centers and that kind of thing. And he said, let's just call it— we're not going to move away from you. And he was, he was the decision maker that could say that without having to get, you know, 12 people to agree with him. He was just like, we're not gonna do that. He said, let's renegotiate the contract now. Let's make it a 3-year contract and let's add on all of our international business, which was an amazing thing. And my client says to me, as far as I'm concerned, the first 2 meetings have paid for the next 10 years of customer advisory boards. But then the cool thing is that that CEO then referred our client to another retailer in the UK, also a very well-known brand. That client or that company became a customer of our client and very quickly rose to be a top 20 account. So not only did they save an at-risk account that they didn't even know was at risk, they saved it, they increased it, and they turned them into an advocate that then created. So it if you have this system of engaging with your clients every 2 or 3 months at the decision maker level, you surface that stuff. That's not hustle. That's, that's just a system to your point about systems and leverage, because then they leverage that customer and got this other new customer. And so that's one of my favorite stories, and that's a big shiny one. But we have stories like that all the time in the work we do. And You know, the ROI on that is astronomical.

That's right. Well, what a great story to end on. And you're, you're obviously an expert in a lot of super interesting topics that we're both passionate about. We could talk about all day, but I got to be mindful of your time. But before I let you go, give us the pitch. Like, who exactly do you work with and how do you help them?

Yeah, thank you. So I'm really looking to talk with people that are advising the small businesses and in getting them to understand how critical these things are like founder dependency, customer concentration, advocacy, leverage systems, all of those things. And so our goal is to help the advisors. We come in as a specialist, we support the advisor. We're not trying to step on their relationship with their client. We want to be an adjunct to the services that they're providing their client and make it a little bit of— not a little bit, making it a team approach. So that the advisor, the trusted advisor, is also guiding, but we're really doing the heavy lifting and using our technology and our dashboard. So everybody's singing from the same songbook. We can measure and put metrics to the progress. And then by the time it comes back to sitting at the table across from a buyer, we have this packaged up with metrics and documentation and narrative that says, There's not only is there no room for discounting, we have these advocates and we expect a premium for them. So that's, that's really what we're doing. So I love talking to the business owners directly. I also really want advisors to look to us as a, as a support group for this revenue durability issue with their clients.

Fantastic. And what's the best way for folks to get in touch?

I'm on LinkedIn, Betsy Westhaper, and also revenuedurability.com or thecongruitygroup.com.

Fantastic. Well, Betsy, thank you so much for taking the time to join us today. I really enjoyed our conversation. I'm sure our audience got a lot out of it.

Oh, I sure hope so. Thank you so much. It's been a pleasure meeting you. It was great hanging out at the conference, and I look forward to continuing the conversation with you.

Talk to you soon.

Uh-huh. Bye-bye.

Thank you for joining this episode of the B2B Growth Blueprint podcast. We hope you've gained insights to grow your business. If you enjoyed this discussion, please rate, comment, like on your favorite platform, and share to others who will find it useful. Do you know a CEO, founder, or leader at an early-stage B2B services, tech, or SaaS company who would like to be a guest and share their story? Send us a note. Let's schedule a conversation.