INSIDE CASH-TIGHT GROWTH MENTORING
Make Earn-Outs Depend on Retention
An example, not a client story.
You are reading an earn-out clause and realise the payout depends on customers staying, not only on this year's revenue. Ivanka Menken uses the Retention Earn-Out Lens inside Cash-Tight Growth Mentoring, a 6-month 1:1 programme at AUD $1,500 per month ex GST, to write down which customers must stay, what revenue maintenance means, and which of those measures you can actually influence. You leave with a one-page earn-out view to take to your adviser.
The Retention Earn-Out Lens is a tool inside the programme, not a separate product. It is not legal or financial advice.
AN EXAMPLE EARN-OUT VIEW
Name the customers the payout depends on
- RetentionThe named customers still trading
- Revenue maintenanceThe level, over the period
- The gapWhat the buyer controls
THE LENS
“An earn-out that ignores retention can pay for revenue that walks out the door.”
An example, not a client result, and not legal advice.
SOUND FAMILIAR?
An earn-out you cannot yet read
- 01You are considering an earn-out and cannot say which customers must stay.
- 02Revenue maintenance is not written into the deal.
- 03You worry the payout depends on numbers you do not control.
AN EXAMPLE WEEK
It is Wednesday night and the draft terms are open on the kitchen table. Part of the price is paid at close. The rest depends on how the business performs afterwards. You read it twice and realise you cannot say which customers that depends on, what counts as revenue being maintained, or what happens if the new owner changes the things those customers stay for.
THE EARN-OUT, AS YOU READ IT
- The payout after close: depends on performance
- Which customers must stay: not named
- Revenue maintenance: not defined
- What you can influence after close: unclear
- What the buyer controls: not written
An example week. Your terms are yours.
WHAT IVANKA SEES
Retention belongs in the measure, not after the sale
An earn-out that ignores retention can pay for revenue that walks out the door, or stop paying because of a decision you no longer make. The shift is to stop treating retention as a post-sale concern and write it into the earn-out view: the customers that must stay, the revenue that must be maintained, and which of those you can still influence once you have sold.
An earn-out that ignores retention can pay for revenue that walks out the door.
THE COST OF STAYING STUCK
Stay stuck, and the payout depends on revenue nobody has tied to named customers. You sign without knowing which relationships carry it, or who controls them after close.
Retention Earn-Out Lens
Customers, measures, and who controls them
The Retention Earn-Out Lens reads an earn-out through two measures: customer retention, the named customers who must stay, and revenue maintenance, the level that must hold over the period. Then it splits each one into what you can influence and what the buyer controls after close.
An example earn-out view. Tap a part. Your customers and your terms are yours.
Retention Earn-Out Lens · a framework by Ivanka Menken
What it is
It is a one-page earn-out view, written before you agree the terms. It lists the customers the payout depends on, defines revenue maintenance in plain words, and marks the gaps between what you can influence and what the deal asks of you.
What it replaces
It replaces signing an earn-out on a revenue number alone, the hope that customers will simply stay, and the surprise when a buyer's change after close moves the payout.
It sits inside Cash-Tight Growth Mentoring, beside the monthly Money-and-Clarity Scorecard. Your lawyer and adviser write the clause; Ivanka helps you see what to ask for. There is no separate checkout.
THE EARN-OUT VIEW, ON ONE PAGE
- 01The customers who must stay: named, with their share of revenue
- 02Revenue maintenance: the level, and the period it is measured over
- 03What you can influence: the handover of each relationship
- 04What the buyer controls: pricing, staff and service after close
- 05The gaps: where the payout depends on someone else's decision
- 06The questions for your adviser, written down
INSIDE A SESSION
Name the customers the payout depends on
In an example session, Ivanka asks three questions: which customers must stay for the earn-out to pay, what revenue maintenance looks like, and which of those measures you can actually influence? She maps retention and revenue maintenance onto the draft terms, then tests the gaps. You write the one-page earn-out view. Before the next session, you take its questions to your adviser and list the handover each named customer needs.
THE EARN-OUT VIEW, FILLED IN
- Must stay
- Customers A, B, C
- Retention
- The named customers still trading, written by name.
- Revenue maintenance
- The level that must hold, and the period it is measured over.
- You can influence
- The handover of each named relationship.
- For your adviser
- Pricing, staff and service decisions the buyer controls.
An example. Your customers are yours.
THE FOUR-STEP LOOP
- 1The one thingThe earn-out clause, and what it really depends on.
- 2The numbersThe named customers, their share of revenue, the period.
- 3The storyWhy it feels rude to ask a buyer about retention.
- 4The commitmentThe earn-out view, and the questions taken to your adviser.
THE QUESTIONS
- Which customers must stay for the earn-out to pay?
- What share of revenue do they carry?
- What does revenue maintenance mean, and over what period?
- Which of those measures can you still influence after close?
- What would a buyer's change do to each one?
Before the next session, you take the earn-out view to your adviser, and write the handover each named customer needs before close.
WHAT CHANGES OVER THE PROGRAMME
An earn-out you can explain
By month 6, you can say what the earn-out depends on, customer by customer.
NOW
- The payout rests on a revenue number alone.
- The customers behind it are not named.
- Revenue maintenance is undefined.
- You cannot say what you control after close.
BY MONTH 6
- A written earn-out view with retention and revenue-maintenance measures.
- A tested list of which customers must stay.
- A handover plan for each of those relationships.
- A clearer position in the sale conversation.
THE 12 FORTNIGHTS
- 1Call
- 2Call
- 3Call
- 4Call
- 5Call
- 6Month 3
- 7Call
- 8Call
- 9Call
- 10Call
- 11Call
- 12Month 6
The programme is the container: 12 fortnightly 60-minute sessions, a monthly scorecard, and reviews at month 3 and month 6.
ILLUSTRATIVE RESULT
In the example, the founder names the three customers who carry most of the revenue, defines revenue maintenance over the earn-out period, and marks the buyer's pricing and service decisions as outside their control. Those become the questions for the adviser before the terms are agreed. Illustrative, not a client result.
WHY IVANKA
Co-founder of The Art of Service
Ivanka Menken is co-founder of The Art of Service. She built Cash-Tight Growth Mentoring for founders of $500K to $3M businesses growing fast but seeing cash tighten, and she holds each founder to the money decisions their firefighting keeps pushing back.
If an earn-out is on the table and you cannot say which customers it depends on, the decision in front of you is one page. Write it before you agree the terms.
“During our sessions Ivanka isn’t just talking theory. She is sharing her own lived experiences.”
Business owner
WHO IT IS FOR
Who fits, and who does not
It fits
- You run a $500K to $3M business and a sale with an earn-out is possible.
- A few customers carry a large share of your revenue.
- You want to understand the terms before your adviser negotiates them.
- You will name the customers and take the questions to your adviser.
It does not fit
- You want accounting or financial advice.
- You want legal advice or someone to draft the earn-out clause.
- You want a business valuation or a broker.
- You want a done-for-you fix.
THE INVESTMENT
AUD $1,500
per month ex GST
6 months · 12 fortnightly sessions
The Retention Earn-Out Lens is part of Cash-Tight Growth Mentoring, a 6-month 1:1 programme at AUD $1,500 per month ex GST. It is not sold separately.
- 12 fortnightly 60-minute sessions
- The monthly Money-and-Clarity Scorecard
- Reviews at month 3 and month 6
- The Retention Earn-Out Lens, if a sale is on the table
Founding place, three in total, AUD $1,000 per month ex GST. Same program, in return for honest monthly feedback and a testimonial, which can be anonymous. Claim a founding place.
The Retention Earn-Out Lens is one of the tools inside the programme. It is not sold separately.
FREQUENTLY ASKED
Questions about retention in an earn-out
How does the Retention Earn-Out Lens work inside Cash-Tight Growth Mentoring?
In a session, Ivanka Menken asks which customers must stay, what revenue maintenance means and which measures you can influence. You write a one-page earn-out view and take its questions to your adviser. Cash-Tight Growth Mentoring runs 6 months at AUD $1,500 per month ex GST; the tool is part of it, and it is not legal advice.
What retention measures belong in an earn-out?
Usually two: the named customers who must keep trading, and the revenue level that must be maintained over the period. Write both in plain words, with the share of revenue each customer carries. Your adviser turns them into terms. Ivanka Menken helps you name them inside Cash-Tight Growth Mentoring, 6 months at AUD $1,500 per month ex GST.
Can this help before I agree to an earn-out?
That is the best time for it. Before you agree the terms, the earn-out view shows which customers carry the payout and which decisions sit with the buyer, so you know what to ask for. Ivanka Menken works it through with you inside Cash-Tight Growth Mentoring, which runs 6 months at AUD $1,500 per month ex GST.
What if revenue is maintained but customers leave?
Then the earn-out may still pay, while the business you sold is weaker than it looks, through price rises or one large new customer. That is why the view names customers as well as revenue. Ask your adviser how the terms treat it. Ivanka Menken works it through with you in Cash-Tight Growth Mentoring, 6 months at AUD $1,500 per month ex GST.
Name the customers before you sign
If an earn-out is on the table and you cannot say which customers it depends on, start with Cash-Tight Growth Mentoring. The Retention Earn-Out Lens is inside it, and the 20-minute intro call is where you can see whether it fits.