Selling up isn’t selling out — Guest starring Alex Henderson, Trade Business Coach

Alex
Yeah, similar reasons, Andy. Mostly I just wanted to be the person that made the decisions. The company that I was working for before I went out on my own. They had a few layers of management and getting answers on jobs was just becoming really tedious. I just wanted to be in that position to make my decision so I could just basically get on with the job.

Andy
Awesome.

Alex
I’d been toying with the idea of starting my business for a while, and then ultimately I just took that step. I saw so many other tradies out there driving their utes around the beaches, and I just thought to myself, well, if they can do it, so can I.

Andy
Mm. Yeah.

Alex
So basically just went in with blind enthusiasm. If not now, then when, and I started up on myself in uh, 2006.

Andy
It was awesome.

Ange
Cool but from memory, like many tradies, you tried to keep your old job and start your new business on the side, was that right?

Alex
Yeah, I did for a while. I was working my regular job during the day and then racing off to, uh, work on my own stuff at night. On top of that, I started studying, uh, small business at TAFE, trying to figure out actually how to run a business. . Uh, I loved, I love my TAFE for my trade skills, but as far as the business skills, it really didn’t do too much for me so that that didn’t last too long.

Andy
Wow. We hear many tradies say that the taste system doesn’t teach you how to run a business.

Alex
Yeah, as I said, I ended up quitting that course cuz it wasn’t giving me anything of real world knowledge. Take home and apply. Yeah. Uh, I definitely wasn’t there for the piece of paper. I wanted the knowledge and got not a lot of value out of it. And I was a one man show at the time, so my time was pretty precious.

Ange
Right. So when you finally decided to quit your day job to focus on your business, how did that go for you?

Alex
Yeah, I was a foreman at the time, and to be honest, I was pretty nervous and, uh, I wasn’t sure how well received it would be. But worse than that, I actually, I remember it clearly. It was Easter of 2006. I went home, had a six pack under my arm, told my girlfriend who I was living with, that I’d just quit my job when I was gonna start my business. And she said, and I quote, that’s not an option. So we broke up. And then in the space of that Easter weekend, yeah, as I said, quit the job. Broke up with a girlfriend. We were living together so I had to move house.

Ange
Oh no.

Alex
Said mom and dad. I’m coming home and I had to sell my, uh, my favorite old classic car too, cuz I needed the cash to start the business.

Andy
What kind of car was it?

Alex
Old Volkswagen.

Andy
Oh yeah, like your Volkswagen.

Alex
I noticed that.

Ange
I do, I like them too. Yeah. That is such a shocking story. I think this is something we don’t always talk much about as trade business owners. Hey, it’s so hard to get others to believe in you because you know you are ready and that you are ready to do it, but it’s heartbreaking when your partner doesn’t believe in you or doesn’t see your vision.

Andy
Yeah, I was very lucky that you backed me a hundred percent Ange. So Alex, you quit your job, you broke up with your girlfriend, you moved back home with your parents because you wanted to start your own business. And you also sold your car. That was one tough journey, you know? Did you hit the ground running after that or was it a slog to get your business off the ground?

Alex
I remember actually, I had a vivid memory in the early days. I was literally sitting on a milk crate at the front of the workshop that I was hiring, and the Simpsons episode where he starts, Mr. Plow, was just on repeat in my head, was like, And now we beat for the film to ring . Um, like I, I definitely wasn’t a marketing guru at that time. I just put an ad in the, in the local paper, the Manly Daily and, and back in those days at work, yeah. And the phone started to ring.

Ange
Yeah, I remember those times clearly too. It worked well for us as well.

Andy
It definitely did.

Ange
So that was back in 2006. I don’t know how well that same ad would work today. Hey.

Alex
Yeah, right. Like marketing was probably a lot easier back then. There was less noise, these days there’s a lot more facets with marketing, got SEO, AdWords, social media, just to name a few. But, uh, yeah. Anyway, back to the business. It was booming. Once I sort of placed that at it, it took off pretty quickly and I had some other work from other contacts and customers as well. I started off doing high-end custom joinery. We’re talking like kitchens at 40 to 50K and, and even a wardrobe well over $20,000.

Andy
Mate, that’s an expensive wardrobe. 20K back in 2006.

Alex
Yes, it was 26K and it’s pretty fancy.

Andy
Ooh.

Ange
I’d love to see photos. So, hey, it sounds like you’re off to a running start, but tell me how were the hours as a startup tradie?

Alex
Ange they were, they were crazy. As I said, I was working full-time during the day. I was trying to figure out how to run a business, how to do sales calls, quotes, designs. On top of that, I was learning how to run my books and my accounts, and read financial reports. Then as I grew. Hire people, manage staff. Most of that was all new to me. And, and whilst I loved it in the early days, I also realized that it wasn’t sustainable. Like for me, like a 12 hour day, it was probably, I would consider that standard sort of seven to seven, 14 to 16 hour days were more common. And to be honest, like I, I just, I lived my business and I hardly saw family and friends.

Andy
You know, when you sit back and you listen to that story and know where you are there, it’s like, holy crap, why do we go in business sometimes? Yeah. It’s because we’ve all got that same story, you know, it’s really tough. Right? I know in my early days as a business owner, I felt like I was missing everything, you know, birthdays, engagements, even just watching the footy at the pub with my mates, you know, the guys would say You just worked too hard. But you know what? Before starting my business, I had two years off. I did a year around Australia backpacking and camping in a camper van, and I also was a snowboard instructor in Canada for a year. I just laughed it off and said, well, how many holidays have you had in the last two years? And they’d say, uh, four weeks per year. Eight weeks. I’ve had an eight week holiday. Well, you know what? I’ve had 104 weeks of holiday, you know, and I could really put ’em in their place. So even though I’m working 24/7, I’ve still had more time off than you.

Ange
Yeah. Even though you’ve been living the good life before starting your business, it doesn’t mean it’s not frustrating for your partner when you are working all day, every day and have no time for anything else.

Andy
Yes.

Ange
And for many trade business owners, it’s where the start of the breakdown of the relationship happens in those early days when they’re becoming so isolated because they’re so overwhelmed with the business and feel like they just don’t have time for friends or family anymore at all. We see it all the time with our Lifestyle Tradie members. They just wanna live a good life. They wanna take off time when they want and still make a profit.

Andy
Yeah, too true, Ange. Alex, you said you started your business in 2006, and am I right to say the GFC hit around 2007? 2008, I think. Yeah. So it really happened for you?

Ange
Yeah. With such a new business, how on earth did you survive such a massive financial crisis?

Alex
I remember those days. Well, it was definitely tough. Business was going really well, but one big significant advantage I have when I moved back home with my parents is that my living costs were really low. So I was just able to save like buggery in that first year. I just saved as much as I could. I remember at the end of that first year, I bought myself a new Rolls Royce of panel sores for like 50 grand. I, right? Yeah. I remember that. At the time, I didn’t even understand finances. My accountant quickly gave me some advice when he’d seen what I did. And taught me about financing equipment and so on. So it wasn’t long after that where I got my first loan. I bought another machine, a hundred, about $110,000 CNC router. And not soon after that, I actually went and bought a factory.

Ange
Wow.

Alex
So, Yeah, I went from not so much as having a credit card to having loans of over half a million dollars, and literally a couple of months later, the GFC hit .

Ange
Ouch. That sounds painful.

Alex
Yeah, sorry. Yeah, it definitely was. I had to let a few staff go, which was really tough, and in hindsight, I wish I tried a different approach to that. But ultimately it was the combinations of these new machines, which I’d purchased, and the flexibility of being my own landlord, which got me through the GFC. Mm. Uh, I was getting work because I had this new machine and when the cash flow was tight, I was able to delay paying my rent if the money wasn’t quite there.

Andy
The GFC hit all our businesses really tough, you know? But we’ve been lucky this time with covid that most of us were considered essential services, but it’s always good to remember that things can change very, very quickly. So you mentioned that your business foundation saved you during the GFC. So when everything started to recover, did you keep the same business model?

Alex
No, in short, uh, I was just hanging on by a thread. I remember my bank balance got down to $12 and I thought, wow was, yeah, I was pretty close to closing the doors, but I was hanging on and I, and I did realize in this experience that there must have been a better way to, to run a business. And then I did have too many eggs in the one basket. I was also constantly stressed and that the hair had fallen outta my head a lot faster than I wanted to accept .

Ange
Oh, Andy too.

Andy
Hey. Hey here, him. Hey, we’re picking on him, not me. .

Alex
Yeah. Uh, so I knew things, uh, had to change, and at that time a friend of mine invited me to a business seminar. Long story short, that’s where I met you guys and I was just hanging off every word about the Dr. Drip story.

Andy
Yeah, that’s right. I remember when we sat down to look at your business, the profit just wasn’t there. So we focused on getting your business model right and your business foundation set up correctly so we could start turning a really great profit year on year.

Ange
You changed the business name around that time too, right?

Alex
Yeah, that’s uh, that’s right, Ange, great memory. Yeah, definitely. As I said, I loved the Dr. Drip story and I loved the name and the branding. I thought it was fun, easy to remember, and had a great energy about it. My company name at the time was actually Carmen, which had sort of German connotations, and I sort of liked the quality aspect of the work I was doing, but everything I was doing was very serious. It was all quiet upmarket work, but as we said, I pivoted from there. I also knew I was too highly strong and I probably wasn’t the best version of myself.

Andy
Yeah, I get that and I totally understand what you’re saying because there’s definitely been times I haven’t been the best version of myself either. You know, even when I started my business in the early days, I was a massive control freak. And you know what? I was a stressed head, hot head, however you wanna look at it, but probably not the best version of myself. I’m sure Ange, you may agree . I know the listeners, she nodded. She’s just a nodding game.

Ange
I know the listeners can’t see me, but I’m nodding profusely.

Alex
Yeah, and look, I’m, I’m guilty as charged on the control freak front as well. I knew I wasn’t happy with myself and I knew I wasn’t happy with the business. So we pivoted, we changed the market that we were operating in. I took a page from Andy and Ange’s book and then, and I changed the name to Captain Cabinets and I had a lot more fun with the business.

Andy
Yeah. And we did a lot of work to get that business foundations and new day-to-day operations running really smoothly too.

Alex
Yeah, we sure did. The big thing was the systems and the processes, getting those into the business, be it checklists, flow charts, video recordings like you name it. Systems and processes for me, another big win was job descriptions and assigning every task in the entire business to one of the guys in the team. And I mean, like every task even we had a process for who and how to take out the bins.

Andy
Awesome.

Alex
Yeah, so, uh, I actively asked for feedback from everyone, what they liked, what they didn’t like about their role, and even feedback on how I was as a manager. I also needed to change my approach. Like previously, I was very much of the mindset, it’ll be quicker or easier if I just do it myself. I’d always thought that I had to be the first person there every day, and I had to be the last to leave every day, and I realized that none of these approaches are sustainable. Another big shift for me mentally was definitely I started seeing myself as a business owner first and a tradesman second, rather than the other way around. That was really empowering me and helped with the day-to-day decision making.

Andy
Yeah, that’s important mate, to be able to step away from just being a tradie and understand you are a business owner.

Ange
Alex, it sounds like you went from really struggling with your business to an awesome, systemized business.

Alex
Yeah. Thanks, Ange. I’d like to think so for sure. In my experience, having a systemized business is the key to having a business that works for you. Otherwise, you’ve just got a job. I found myself with more time and more freedom with the business running smoothly without me, I no longer needed to be there every minute of every day and I could start having a life again.

Ange
Yeah, that sounds awesome. So many trade businesses find a massive difference when they introduce streamline systems and processes. Plus it makes your business saleable because a potential buyer can see how well the company runs on its own.

Alex
Yeah, exactly. And, it was running really well. And with that newfound time, I’d rediscovered some old hobbies and I found some new ones as well. And I started to ponder maybe about selling my business and what else I could do with myself.

Andy
Yeah. So for many of us, selling up is the final step in owning our business. You know, it allows us to retire comfortably or take on that next challenge. But Alex, you had a slightly different reason for selling, right?

Alex
Yeah, that’s right. Andy. Uh, my dad got a not so great diagnosis, so we had a few, few hearts to hearts and discussed what was on his bucket list. He wanted to go cycling in Italy, so we did. We chose, uh, a one month holiday together in Italy and, riding and, and eating our way around the country.

Ange
Awesome.

Andy
That sounds so much fun.

Alex
Yeah. Great, great memories for sure. And as the business was running smoothly without me and there was cash in the bank, I was able to take that time with him. I hadn’t really traveled much previously like prior. I was kind of always working. Yeah. Um, So, uh, yeah, this trip really opened my eyes to a bigger world and, and with the few new interests, which, which I’d mentioned were now becoming my main attention and I wanted to explore the world a bit more.

Andy
Yeah. So a bit more travel, getting over there and amongst it, and then Covid hit. Yeah. . Yeah. That’s awesome, mate, that you got time with your dad. You know, a similar thing happened with my dad. You know, he had been diagnosed with cancer and had three months to live. It was absolutely devastating. You know what? I was in a really lucky position as well where I could walk away from the business and be with my dad every single day for three months, you know, without having the worry of where the money was coming from and what was going on. And to be honest, owning your own business really can have some serious perks when it comes down to being financially stable and being able to make your own decisions about how you wanna spend your time. You know, we run our own business, so we have the freedom to choose and dictate our own life. So Alex, what happened next?

Alex
As I touched on earlier, the idea of selling had crossed my mind just by coincidence at about that time, I got a flyer in the mail from a business broker and just like people do, I guess with, with the house in real estate, I thought there was no harm in getting evaluation of what it might be worth. So I had a good idea of sort of what I was sitting in the ballpark. Fast forward about a year and an offer came in from another cabinet maker. He’d just split up with his business partner and he could see the value in my business. So after a few conversations with my accountant and a lot of thought, it was just an offer that I just couldn’t refuse. So yeah, it was mid 2017, I accepted the offer and sold up.

Andy
Yeah. So good mate. So happy for you.

Alex
Yeah. Appreciate that. Yeah, it was a good reward for a lot of hard work, for sure. Yes. And then from then I just, yeah, had a couple years off. This time I. Ticked off a few items from my own bucket list. Um, that included like a, a good extended trip around, uh, the USA uh, when I returned and that’s when I reconnected with you guys. And I love what you guys are doing with Lifestyle Tradie and just working with trade based clients for me, like it’s a natural fit. I know it’s a tough gig running a small business, especially while you’re still on the tools. And for me, like I can talk, I can talk shop all day, I can talk business all day. So this is just a perfect fit for me and if I can help others and pass on some of my knowledge, then I’m stoked.

Andy
Yeah, mate, it’s so good to have you a part of our team as well, and what an absolute classic journey. You know, we’re, we’re glad you’ve ended up with us and you are right. The best way to get your business to sell is to be able to show it’s a well-oiled machine that needs little to no involvement from a new buyer. You know, if everything is running smoothly, the staff is great. The business is in excellent condition and proven steady profit and cash flow. You’ve really got the golden goose.

Ange
Golden goose. So for those of you listening, if your business isn’t quite there but you want it to be, then let’s chat, book in a free strategy session with Andy, and we’ll take a look at your entire business and show you where tweets could be made so your business could run smoothly 24/7.

Andy
Even if selling isn’t your end goal, having a turnkey business that runs smoothly is the best. Or perhaps you’re like me and only spend a few hours a week in the business. In that case, that’s an awesome lifestyle because it gives you the freedom to choose what you want to do. Like spending time with your family, building another business, or taking time to enjoy your hobbies.

Alex
Yeah, exactly. And for me it is just a textbook. If nothing changes, then nothing changes. Even if you don’t plan on selling up straight away, having those systems and processes in place gives you that freedom to choose. You can choose to grow the business, you can choose to have a few days off. You can choose to go to a conference. You can choose to diversify or decide to do something charitable, take up a hobby, travel when Covid is over. You know? It’s very liberating.

Andy
Yeah, it is.

Alex
It’s very liberating having that option to choose.

Andy
I love how you stumble words, because I stumble my words all the time. . Alex, you are dead, right? So thanks so much for joining Ange and I today in the studio to share your story. We loved having one here, mate.

Alex
No worries. Thanks guys. It’s been great.

Ange
See you, Alex. And for those of you listening, if selling up or having a turnkey business sounds like a pipe dream to you and you’re sitting there thinking, my business could never do that, then I’m here to tell you that it absolutely can. In our education, business, Lifestyle Tradie, we not only help you set up your business to function like this, but we also guide you through how to take you to the next level in life.

Andy
We’ve even written a book about it.

Ange
Yeah, we sure did. Download your free digital copy of Start Up. Scale Up. Sell Up. However you like me and prefer to hold the real thing, then click on the link in the show notes to request your free hard copy.

Andy
Free copy. Are you kidding? I thought it was 29.99. . No. For our listeners, we’ll send it to you for free. And honestly, none of us started our trade business to be working our guts out six days a week. We started it so that we could earn great profit and be in control of our lives.

Ange
Yeah, like I’ve said before, you were never taught how to operate a successful trade business. TAFE literally only taught you rules and regulations, but that’s only one small part of a trade business. You’ve done an awesome job getting yourself this far, guys, but we can take you to the next level no matter what stage of business you are at. Startup looking to increase your team and scale up, or you’ve been running your business for a while and you think it’s the right time to sell up and take your next step in life. We can help you at any stage because we’ve been there, we’ve done that, and we know how to do it, and we wanna share our wealth of knowledge with you.

Andy
Exactly. And as Ange said, get in contact with us today, lifestyletradie.com.au. Well, that’s all from us today. Tune in next week. We’ll be joined by my mate, Dan Pollard. He had a bunch of plumbing businesses before starting the software program, Fergus. We’ll be chatting about his journey from a plumber to a tech wizard. Until then, cheers.

Ange
See you soon.