You’ve probably never considered selling or exiting your trade business… here’s why you should. Guest starring Craig West, founder of Succession Plus

Ange
What I find interesting about our story is the fact that Dr. Drip was actually never for sale, but because we were systemized and you hadn’t been working in the business for over 10 years, then we were ready. So you really had a choice.

Andy
Well, the thing is, when the money’s right, everything’s for sale.

Ange
Yeah.

Andy
Maybe not everything.

Ange
No, maybe not everything. So what I love about that too though, is I think you’ve just proven the point that for every trade business owner, if you get the business model right, then the business is seriously valuable and is worth a great deal of money when the time comes.

Andy
Yeah, it’s really sad that so many trade businesses get to a point in their life that they literally just walk away from their trade business and they make no money, and they sort of pretty much just shut the doors or hand it over to someone else.

Ange
So true. A lot of trade business owners wouldn’t even think it’s even an option, let alone know how to do it, which is part of the reason why we wrote our book, Start Up. Scale Up. Sell Up. Where we actually take the readers through each phase and what needs to happen at each phase to move to the next.

Andy
As you touched on earlier, getting the business model right, getting the structure in the business and the systems in the business right, is an absolute game changer.

Ange
Absolutely.

Andy
I really wish this kind of thing was around when I first started the trade business back in the year 2000 because I wouldn’t have made so many mistakes, not little mistakes, massive mistakes over the years.

Ange
Well, another great reason why we started Lifestyle Tradie, so that we can prevent other trade business owners from the heartache that you and I experienced. You know what, for you listeners, if you don’t know our story, can I suggest you go back and listen to our first episode, which is titled, Our Story. There are so many insights in there. And guess what?

Andy
What?

Ange
Well, for the month of January, we’re actually giving away a free physical copy of our book Startup Scale Up Sell Up, so that you, our listeners, can actually start the journey to get your business model right.

Andy
Exactly. It doesn’t matter if you currently have only just started your business or you have had a business for many, many years, it’s never too late to fix what needs fixing.

Ange
Yeah. So that’s why for the whole of January, we are giving away a physical copy of the book bundled together with our second book, which is Tradie Wife: Why winging it isn’t working and breaking Old Habits will Help, and they’re both free, delivered to your door. Pretty cool, right? So all you need to do is head to lifestyletradie.com.au/podcast bundle where you can register to get your free copies. And I’ll also pop the link in the show notes too.

Andy
Woohoo. Yeah. Start your year right by understanding the opportunities for you and your trade business. And that definitely deserves a hell yeah. Hell yeah!

Ange
Too, right? It does. So to go back to the start, today’s topic is all about helping you prepare your business to exit, whether that’s maybe selling or other. And to help us out, we’ve brought on a very special guest, Craig West from Succession Plus. Welcome, Craig.

Craig
Hi. Thanks for having me.

Ange
Excited to have you with us.

Andy
Yeah, very excited to have you with us today.

Ange
Craig, for those of you who don’t know you, can you share a little bit about your background and what your business Succession Plus offers?

Craig
Yeah, absolutely. So my background is actually in accounting, so I’m a boring accountant who didn’t really like accounting and got out of it fairly quickly, actually. But I, I worked with a lot of business owner clients as an accountant, and realized very quickly that there are quite a few strategic things they needed help with, that I typically didn’t provide. And so I started to look at what those key things were that really made businesses successful or not, and obviously went through a large number of clients helping them every year with their financial statements and their tax returns and lodging things for the tax office and ASIC and all those things. None of which I actually thought were all that valuable for my clients. Necessary and important. Don’t get me wrong, they have to be done and they have to be done properly, but didn’t actually add a lot of value. So I started to look at the key things that clients needed help with that could really make a substantial difference to their business. One of those things was exit and succession planning. And so I actually started looking at what needed to be done to help a business and the owner get ready for exit and succession. And as you rightly pointed out, that could be a sale. It could be passing it on to their kids, it could be some other exit strategy, but really there wasn’t a lot around in terms of how you prepare for an exit. What are the key things you need to do and how do you get ready? So I started Succession Plus in 2009. Uh, we’ve got 23 advisors around the country in Australia, and we’ve also got operations now in New Zealand and the United Kingdom. And it’s all about, Helping business owners maximize the value of their business and achieve a successful exit.

Ange
I love the fact that you’ve actually niched into something so important, because I can imagine not just for trade business owners, but every business, they just, you know, take a leap of faith and start a business and before they know it, you know, 10, 20, 30 years have gone by and haven’t really thought about that exit plan and what exactly are they doing next. So adding so much value to a lot of people.

Craig
The reality is everybody’s gonna exit whether we like it or not. Whether we plan it or not, everybody’s gonna exit. My message to people is manage it and plan it yourself. Don’t let it happen to you. Because when it happens to you, it’s not normally cool.

Ange
No.

Craig
It’s not normally a great outcome. You’re either the outcome, cut out in an ambulance or you know, some other problem happens and then you know, you get sick or you’ve got a partnership dispute or there’s a client that goes broke, doesn’t pay you, or whatever it does that causes you to exit unsuccessfully. So we are really about making sure what we need to do to make sure we can successfully exit, when we are ready on our terms the way we want.

Andy
Yeah, exactly. And, and as you know, like there’s a lot of trade business owners out there listening now, and if you have a look at a lot of those, you know, guys 55, 65, 70 over the years that have shut the doors and they walk away and they haven’t really built a really good asset. They had no plans, they just did what they did and that was to use their hands and make enough money to survive. And some of them were fairly successful. But you know, when you’re building these businesses, you know there’s a chance that you could sell this business and make some good money at it as well. So what’s the best way to approach, you know, this exit strategy? Like what’s the best way to make sure you’re setting it up the right way?

Craig
I think the first thing to do, and I know you teach people to do this, is put some time aside to actually think about some of these key strategic things. Don’t just wait till you turn 75 and think, oh my God, what do I do now? Because it’s probably too late. It’s really about planning an exit, actually thinking about talking to your, you know, if it’s your spouse, if you’re in a family business, your other shareholders, if you’ve got other people involved in the business, what does it look like? When am I gonna exit? How much for? What’s the exit strategy? What does that need to look like? I always tell people, you know, begin with the end in mind. Start to think about your exit when you start. Get really clear on what it needs to look like because there’s a whole stack of things you can do as a business owner to get you better prepared, make your business more attractive, and you more ready to sort of sell or hand over or pass it onto your kids or whatever it might need to be. It’s really just about setting aside time, effort and probably money to spend on setting up things exactly the way they need to be so that you get the best possible sale price. It’s a little bit like, you know, if you owned a property in Sydney or Melbourne and you wanted to sell it and you did absolutely nothing about preparing it, you just bought in an agent on a Saturday and held an auction, you’ll probably sell it, right? But you won’t sell it at the right price. It won’t be the right buyer, it won’t be at the right value. You’ll, you’ll lose a lot of money. So you know what, no one will do that with a house, but we do it with our businesses all the time.

Andy
Yeah, definitely.

Ange
It’s really easy for us as trade business owners just to let life kind of formulate as we go versus us designing or creating our own life. And I love that you say, have the end in mind and walk into your business like that and, and ensure that you have that plan. Because then you can actually break down what it is you need to do each year, each month, even each week. And who are those people around you who can actually assist you in that process to prepare for this exit strategy. Cuz at the end of the day, whether you choose to exit or not, your business needs to be ready for it because you never know even when something’s gonna happen to you.

Craig
Yeah, correct.

Ange
A lot of this activity that is required has to happen anyway. It just so happens that this conversation ends up being around exit strategy about when you are gonna remove yourself. But I think we need to all do it.

Craig
It’s really easy to get caught up in the day-to-day, right? You’re going to work, you’re busy, you’ve got jobs, you’ve got quotes to do. You’ve gotta go home and do invoices. You’ve got all the stuff that keeps you really busy. It’s easy to sell, sort that out next week. Next week becomes next month and next month becomes next year, and then you turn 65 and go shit. I’m 65. I haven’t got a plan. I dunno what I’m gonna do. My business is not ready. I haven’t got people in place, I haven’t got the documents I need, I haven’t got structures around me. And these businesses are typically quite valuable, particularly, you know, people have been working with you guys and have got their business set up properly and they’re, they’ve really got a fine tune machine then they’re quite valuable assets to sell, but they won’t sell if you don’t prepare them properly.

Andy
Yeah, it’s interesting, isn’t it, when you look at trade business owners, like, you know, we talk about this a lot at Lifestyle Tradie, where if you went up to a trade business owner tomorrow and you know, got to pull a hundred bucks outta their wallet and just took it and then, you know, threw it out the car window as you drove past or whatever, that that’d be like punch on, you know? But so many business owners out there have got so many parts of their business that’s not even close to correct. You got a lot of money coming in the door and it’s like a bucket and then it’s all flowing out the side. And I mean, as an accountant you see that as well. So obviously here at Lifestyle Tradie we help you get your business right and structured the right way, understand your numbers and get all the processes in place. But still, the exiting of the business is a big piece of the missing pie that the majority of trade business owners have never been able to do. Like, if I think about people that have sold their business in the trade industry that I know, I, I, it’s, it’s less than two hands. It’s less than two hands. Now I know there’s more out there, but who I personally know, most people don’t. They hand it down to their sons or a mate, or that just pretty much closes the doors and it all just goes downhill really fast because they’ve never had the right structure in it as well.

Craig
And I think that’s easy to do. You know, it’s easy for me to sit here and criticize tradies who haven’t got an exit strategy, but they’re bloody busy. Right? What I would say is treat it like a project. You know, you’re not gonna turn up on site next Monday with no materials, no plan, no idea what you’re gonna do. And the owner just says, yeah mate, build something out the back there, it’s beautiful. Like that, no one’s gonna do that. So I think you could treat this particular aspect, you know, an exit or succession plan for your business, like a project. What do you need? What’s the plan? Who’s involved? What’s it gonna cost me? How much time do I need to put aside? What materials do I need? You know, to actually make it happen, to get out with a successful outcome, because this will probably be in terms of financials anyway. This will probably be the biggest contributor to long-term wealth, along with making money on the way, obviously, but certainly, you know, if you can sell your business for a million, 2 million, whatever the number might be, that’s a fairly substantial amount in terms of long-term wealth creation for a business owner.

Ange
So Craig, trade business owners often when they start their business, because they wear every hat, they do every function inside that business and as they grow, they eventually bring in additional team members or whatever. At the end of the day, I mean, we even talk about the fact that our business, Dr. Drip, was literally like our baby. So emotionally they can get really connected to their business. And often as a trade business owner, the name of the company is often tied up with themselves, it has a lot of identity. You know, their plumbing company or whatever, whatever industry it was, is actually tied up to them as an identity. So therefore, they’re so emotionally connected. Do you see this often, and if so, how can business owners separate themselves emotionally?

Craig
It’s one of the biggest problems that you see. There’s a whole academic theory called role identity fusion. The business owner and the business are so closely connected, they’re very difficult to separate. It’s a very emotional issue for the owner, and as we know, when you make decisions from emotion, whether it’s business or any other decision, It’s not normally the right decision. It’s normally, you know, half-assed or not done properly, or you’ve done it in anger or you’ve done it in fear, or you’ve done it in something else where you’re not gonna make the right decision. So you have to get that emotional aspect and understand it. First, acknowledge that it’s there. You can’t change it. It is your baby. You know, you’ve bought that business up from scratch and you’ve started it and you’ve grown it, and it’s now got people and money and equipment and it’s a, it’s a, it’s a viable asset, but that’s the key word. You have to treat it like an asset. Not like your baby. So you have to start to think of this as an asset, like an investment property. Like a share portfolio. You know, the investment property is a great example. You know, I often talk to people and say, you know, you’re gonna replace the carpet in your lounge room at home. You will spend hours and hours looking at different carpets and alternatives and colors and stain protection and how you’re gonna install it and how much underlay you put underneath it cuz it’s your lounge room, right. You go and replace that carpet in your investment property, that’s a five minute decision. How much? When can you do it? What’s the story? I don’t really care what color it is, what underlays underneath it or anything else. I want the carpet that’s reasonably priced and it’s gonna last the longest possible time. Let’s go. Yeah, five minute job. And the only difference between those two is I’m not emotional about the investment property carpet cause I’m not gonna sit on it. But my carpet in my lounge room at home, I’m emotionally attached to that. And that’s the message. We’ve gotta treat it like an asset, like an investment property. What’s it worth? How do I manage it? How do I make clear, smart business decisions, not emotionally driven decisions. And one of the key things, I think you said it before Ange, get some good advice around it. Get your accountant, get your coach, get whoever you need to help you actually look at that as a business asset rather than an emotional decision. You’ll make far better decisions if you do.

Andy
I know most tradies, sort of over the years never really put any emphasis on that they could sell their business and if it was even valuable. And that’s the bit that I think all US tradies out there are looking at. We are putting time and effort and marketing and all this stuff into the business, but people aren’t looking at the long-term strategy of potentially selling it because most people in their hard hearts think they’ll never be able to sell their trade business. And that’s the big kicker here. We’ve gotta make sure the trade industry understands you can sell the business. Now, I know property managers that have a property portfolio and they sell their business and mortgage brokers, if they put a certain amount of money through the books, they sell their business. And accountants, you guys sell your business for, I think it’s, um, dollar for dollar or whatever it is, but there’s all the calculations for this. You guys know that you are building a bank of cash that at some stage you can sell. Where trade business owners don’t set their business up realizing that there is a bank of cash at the end of the rainbow when they wanna sell. So it’s a real mindset point of view that tradies have got a real step up and understand that it’s possible and they should be setting it up and planning, like you said, mate, right now.

Craig
Absolutely. It’s gotta treat it like an asset. And it is, you know, there’s quite valuable trade businesses out there that have sold for multi million dollars. And there’s, it’s because the owner has treated it like an asset, done what needs to be done to prepare it well and themselves well to make it a saleable asset. And if you think about the types of businesses that might be, you know, I’ve got a mate that actually owns a very good plumbing business. And he’s got plumbing contracts largely for maintenance with large infrastructure. Like Sydney Airport, for example. Now, if you think of that, he’s got a long-term contract. I think, and I don’t quote me on this, I think he’s been the contract plumber at Sydney Airport for something like 20 years in a row. Right. Fantastic revenue stream, ongoing contract, fixed in, it’s a pain in the ass, don’t get me wrong cause somebody’s gonna ring you at 4:30 AM and say the toilet’s blocked in the terminal, you better get outta here right now. So there’s lots of issues with it. But in terms of a valuable business asset, that’s something somebody will buy and they’ll pay very, very good money for it, because it’s highly, it’s, it’s a different type of business now. There’s a lot of work going into thinking about and preparing that aspect, but every trade business I see should be or could be able to do that. There’s just a bit of work and effort and time and and money involved in getting it to that point.

Andy
And it’s really the know-how. I mean a lot of these guys don’t know the next stage. And obviously at Lifestyle Tradie, that’s what we do and you also do that as well. So if any of our listeners out there want to exit their business just to say in the next 10 years or so, where would you think they should start?

Craig
I think in the first place there’s a stack of stuff on our website. But the first place would be, you know, get a copy of the book that I’ve written on succession planning. It just talks you through a typical case study. It’s actually a small family owned engineering business, and it just talks about all the things that they had to do over about a five year period to get themselves their finances and the business ready for an exit. It’s a case study. It just sort of read through. It has a look. It’s not a massive academic textbook or anything. It’s quite a light read. It just talks about this family and how they get ready for a successful exit. That’s probably a good starting point just to understand what we’re talking about and what’s involved. Then when you’re ready to go, I mean, obviously reach out. I’m happy to help people reach out, sit down. Where we start with every business is what we call a business insights report, and it’s a really detailed breakdown of the business and to put it into perspective, this is exactly the same as a pest and building report when you buy a house, right? If I’m gonna go and buy your business tomorrow, I’m gonna wanna know a whole stack of things about it. I’m gonna do some due diligence. I’m gonna check things. I’m gonna look at your financial performance. I’m gonna look at your marketing, I’m gonna look at your people. I’m gonna look at all your documentation. This is the same sort of thing in a bit of detail to sort of really understand what you actually got today. What’s it worth? If I sold it today, would it be worth nothing or a million bucks or 10 million bucks? And why? Why is it worth a million dollars, not two? What could I do, in other words, to change it from a $1 million asset to a $2 million asset? Because that’s really where I need to focus. Then I can come up with a bit of an implementation plan that says step by step, go through and do these things over the next five years, and you’ll go from 1 million to 2 million. Yeah, or from 2 million to five or whatever the number might be.

Andy
Yeah, that’s right. I think you, you know, you’re exactly right. It just starts with a plan. It starts with working with people that have been there and done that as well, right? And us tradies, you don’t know what you don’t know, and if you don’t go out there and actively search for it, then you can’t get better at it.

Ange
Absolutely.

Andy
So if we’ve got listeners out there and they’re like, okay, I really wanna increase the value of my business, you know, you talk about needing to reduce the risks in your business. Can you explain a bit more about how that’s done?

Craig
Yeah, there’s probably two key parts to think about there with the trade business, there’s, there’s certainly the risk side of income and I, you know, we’ve spoken about the contract with the airport or you know, there’s lots of tradies out there that have got contracts with real estate. You mentioned real estate agents, property managers before, a great source of, you know, recurring revenue. And that’s a critical word, you know, if I’m gonna buy two businesses that actually both turn over exactly a million dollars. But one has to constantly market social media ads. You know, all the letterbox drops, whatever you have to do to get new clients to turn over a million dollars. And the other one has an ongoing recurring contract with Sydney Airport or with the local real estate to do all the trade repairs. They’re two very different businesses, and the reason they’re different is because the risk around the income is different. There’s far less risk if the real estate agent rings you every second day and says, can you go to five Smith Street and fix the dunny? Or Can you go to five Smith Street, the roof’s leaking, or whatever it might be. That’s a different business model to having to go out and find new clients and pay money for social media and ads and printing and letter box drops and all that sort of stuff. So the first part of the risk is on the revenue side. What can you do to lock in those kinds of ongoing engagements?

Andy
Yeah, because it’s interesting because you know, there’s two ways of looking at that. You get this contract and, and say it’s a two year contract, five year. I know he’s had it for 20 years, and as long as that continues, it’s worth a lot of money, but, If you lose that contract, the business, if it’s 80% of the business, the business is gone. So with having these contracts, you know, when you don’t have it anymore, it’s gone. Where if you are working, say with just residential Mr. And Mrs. Jones customers, and you’ve got a really good database. You’re exactly right. You’ve gotta spend a hell of a lot of marketing money. But if you lose someone, you’re losing one customer. You’re not losing, like a big chunk of your business. So there’s, there’s pros and cons on both, isn’t there? Trying to work out what’s the best way and their best value.

Craig
And that’s the other side of risk. I mean, you’ve just described it really well. There’s always risk, right? You can’t get out, there’s no business on earth, it’s got no risk attached to it.

Andy
Exactly.

Craig
It doesn’t matter what it is. The key thing is to think about all the risks that are in your business. Now, we just talked about income risk, and you’re right. If your whole business is built around one contract and you lose it, you’ve suddenly got a big problem. Cause you’ve got no revenue. You build around a whole stack of residential customers, you know, mom and dad, that, that, that call you in, then that’s a different kind of risk. How do you manage that? How do you keep the marketing going, keep that happening? The other side though is there’s a whole stack of operational risk. So we’ve got people, we’ve got vehicles on the road, we’re attending people’s properties, we’re climbing on ladders. We’re, you know, we’re doing all sorts of things, working with welding equipment, we’re doing all sorts of things that combine all sorts of different risks. So there’s risks with, you know, you’ve seen so many companies this year get caught out with underpayment of wages is a good example of a risk. Right. That’s just a business risk. Now there’s things you can do to minimize that risk. Make sure your accountant checks it out for you and you’re compliant, you’re doing the right thing and you’re, you’re paying people the right amount for overtime and all those sorts of things is a really good example of a fairly simple risk, but it’s fairly easy to fix. Some of the other risks are much more substantial when you look at a business. You know, we talked about revenue and where’s that risk, where’s the revenue come from? But there’s also the operational stuff, you know, the day-to-day stuff, the vehicle’s on the road. The accidents, the safety issues, the, you know, the fact that you do some work for a client and something fails and the whole house floods overnight, or, you know, something happens like that. Those risks are in every business and they’re all different. You know, I don’t have that kind of risk in my business. But I have a different kind of risk. You know, my risk is about the advice I give people or you know, what, what are what I’m telling them. Now, there’s certain things you can do. Insurance, obviously, all that sort of stuff, which is fairly basic and hopefully everyone’s got that in place. But it’s also about identifying those risks in your business and working out. Two things. One, how likely is it to happen? Cause if it’s not very likely, then let’s not waste hours and hours working it out. Two. What’s the impact if it does happen? Yeah, so let’s say one of your vehicles is on the road today and it gets a flat tire, right? It’s probably fairly likely that’s gonna happen at some point. If you’re driving around all day, you’re gonna get a flat tire, right? But the impact is not that bad. It’s not gonna kill you. It’s not gonna cause any major problems. You may well have a half hour delay where you’re late to a job and you’re the customer and say, sorry, mate, I’ve got a flat tire. I’ll be there shortly. It’s not a big deal. But there are other risks. You know, like I talked about, if you do some work and it fails and you flood a house or you, you know, you do something else that’s got a major impact, then that’s where you really need to focus. What, what are the things that are likely to happen? And the ones that are likely to happen, what’s the ones that have got the most impact? And then you can start to work on that and the reason that’s important is risk is the other side of the equation in terms of valuing a business. The more risk, the lower the valuation. So if you can spend some time and effort lowering risk, for example, training your employees, training your employees at anything you like, reduces risk. So that’s a great example of something you can easily do. It’s tangible. You can see it, you can do it. You know, you have a toolbox meeting, you run some training sessions. You do whatever it is you need to do, whether it’s technical around the job that they do, whether it’s safety around driving a vehicle, whether it’s how to deal with clients, whether it’s sales training, all of those things, reduce the risk in your business and therefore increase the valuation.

Andy
That’s it.

Ange
So Craig, definitely with trade, we definitely get faced with a lot of different risks depending on what the industry that we have, especially cuz our guys are out on the road and they’re using their hands. They’ve gotta make decisions all the time, so it’s a really good exercise to encourage your team in a toolbox meeting to actually sit down and go through a lot of the risks that you get faced with your specific trade. That being said, I can imagine there’s another side to this being what value could you actually work on to ensure that the business actually can increase the value? So what examples do you have of perhaps these value drivers and how can a trade business owner improve on them?

Craig
Yeah, there’s a number of things. You’re quite right. There’s two sides to the equation. As we said before, one’s the risks, what drops your valuation or what detracts from your valuation. The other side is what drives it? What pushes your valuation up? And we talked about one example, which is the recurring revenue of having a property manager that constantly gives you work. You don’t have to do the marketing. That’s one really good, simple example. The other one that a lot of people think about at the moment is employees. You know, it’s difficult to get and keep good employees. So that’s a risk, but it’s also a value driver. You know, if you’ve had someone that’s worked with you for five years. They know your business, they know your customers, they know how you work, they know your product. That really is a value driver. And so the business owner needs to think about A) how do I get those people? B) Once I’ve got them, how do I keep them? And C) how do I reward them and incentivize them to make sure that they’re focused on helping me? Grow the value of the business and drive value. So there’s one example. Employees. Yeah. The other stuff is really, you know, what I’m seeing now is, in a lot of these businesses, is the use of technology and apps and systems and so on to simplify things, to make things quicker, easier, more efficient. You know, for one, a good example is how do you get paid more quickly? You know there’s apps now where you can literally do the timesheet on the spot, do the invoice, the materials, bang, there it is. Swipe your card, you’re paid before you even drive out the driveway. If you go back 10 years, that was almost impossible. Just for, for a trade to actually get paid on the job, on the spot, unless someone had cash and just gave it to you. You know, it was bloody hard work cause you probably didn’t have the eftpos terminal, you didn’t have the ability to take payment. You probably had to go away. And then somebody generated an invoice a week later and hopefully the client paid it a week after that, not four weeks. So that’s a good example of things that you can do to drive value. Just start to look at how do I get good people and lock them in? How do I improve my processes? And we talked about training in terms of reducing risk. There’s also training in terms of value drivers, you know, training your people in sales and customer service to increase referrals, to increase new jobs that you get is another good example. And then just looking at what technology or systems or tools or equipment can you use? And again, that’s an investment, but it’s an investment in driving value. So it’s quite an okay investment in terms of return because we know we can do the job faster or get paid faster or whatever it might be.

Andy
Yeah. And I know there’s a lot of people out there and, and that are talking to me at the moment and staff are so hard to get and we know, we talk about the great resignation and people moving around and how hard it is to get tradies. I mean, any staff, but we’re talking tradies today, that’s who we are. Lifestyle Tradie, but trying to get them has just been so challenging that people are actually going, and a few of our members have gone to buy businesses just so they can get the staff so, That’s definitely something that, um, our guys are already starting to do. And, as you said, we talk a lot about sales and upselling and cross-selling and processes, and having the right product in your system, the right technology to make sure, I mean all that stuff definitely helps with that sales process.

Ange
Well, to me, this is completely undermined by, uh, business systems, which is what we educate to ensure that you have value in your business, you must have systems. It’s the only way to help your entire team succeed. And the only way that you can actually not have to repeat something yourself. So you’ve gotta be able to teach your team how to do a task efficiently over and over and over again, and still make profit.

Andy
The challenge I’ve got at the moment, The amount of tradies that ring me and go, Andy, I need systems in my business. And I go, yeah, of course you do. But most businesses are run so poorly, there’s no good building systems around a poorly managed business. So that’s where they come and we, we get the foundations of their business and the structure of their business right. And then all the systems come, and that’s when they start gaining all these hours per week. And life just becomes a lot easier.

Ange
What I love about this is it’s important for every trade business owner to be taught how to get their business model right so that they can actually step away a little bit and actually rely on their team who are actually happy to put their hand up and take more responsibility, as if only the trade business owner was happy to relinquish a little bit of control, right? So they have to learn this skill anyway. If they wanna have a little bit of freedom to be able to even take a couple of weeks or a couple of months holiday.

Andy
But you’re touching on the owner that everything’s going through them, that that’s actually a risk in business, isn’t it?

Ange
It is.

Andy
You know, because it’s the business. Everything’s going through them. So someone goes, okay, we buy the business, but we need you to hang around for the next 2, 3, 5 years because you are the only one that knows anything.

Ange
Correct.

Andy
That’s a real risk and that affects the value of the business. You need a business where the person potentially hasn’t even worked. Doesn’t work in the business anymore or does a very limited role, so that’s another big one as well.

Ange
Well, this goes to your point Craig of, if someone were to sit and analyze their own business and go, oh, one of my biggest risks is the fact that me as a business owner is the bottleneck and everyone has to come to me with all the questions. Well, how do you mitigate that? You develop systems to remove yourself. Short story.

Craig
Correct, absolutely right. It’s hard to do though when it’s your baby as you said before, you know, this is my baby. I wanna be involved, I wanna control it, I wanna manage it. And unfortunately, a lot of us, as business owners, we’re micromanagers.

Andy
Control freak, no doubt about it.

Craig
Yeah, absolutely. And that makes it really hard to do that.

Ange
So in saying that, Craig, if a trade business owner was getting to a point that they were ready to exit in some banner, what would or could a successful exit look like for them?

Craig
The most obvious one is to sell. And to sell here would be one of two key options really to sell to internal people. So that’s probably your key employees, whether there’s two or three of them, or five or 10 of them. That’s one option. The other one is to sell externally, and that’s probably to a competitor or to someone who’s in the suburb up the road from you, or who does similar things to you, to similar clients to you. Then they’re a logical buyer, and again, it’s just about how you prepare for that.

Ange
And what’s even good about that is having that end in mind. So you could almost, well, you can absolutely prepare your business knowing that you’ve earmarked these five competitors as an example. And why would they buy me as a business.

Craig
Correct.

Ange
And therefore prepare for that.

Craig
Exactly right. So if you are selling to the person externally in the next suburb, signing up the real estate agent in your suburb and having them on as an ongoing source of revenue will be highly attractive to that person. So starting to think about what can I do to just make this a little bit more attractive, a little bit more valuable? Um, in terms of those value drivers, we spoke about, to make that a lot easier in terms of getting a successful exit.

Andy
Nah, exactly. Exactly. And I, I’ve heard quite a few business owners, not in the trade arena, but they actually build their business and they actually know that they’re gonna sell their business in say, five years, but they actually understand who the potential buyer is and they build the business on purpose so that they know it’s gonna be very attractive to them. And then there’s a person already about to buy or be willing to buy.

Craig
And that’s quite easy to do as long as, A) you think about preparation and not just, you know, wait and hope and you know, see what happens. B) you spend the time and effort to make that happen. Work, work out what you need to do because, you know, signing up the real estate agent, your local suburb and doing all that stuff, that might take some time. They might already have someone in a contract that’s got 18 months to go. So you can’t start that three weeks before you wanna sell. You wanna start that as early as possible. Start to look at what I need to do? Let’s get a list, let’s get a project plan, as Andy mentioned before, this should be treated like a project, just get a list. What’s the project plan look like? What do I gotta do now? Next month, next year, next quarter, whatever, to make it happen. So that when I’m at that point where I’m ready to go, away we go.

Andy
Yeah, mate. We always like to play a bit of the game here at The Tradie Show, so I’m gonna ask you three questions. You’ve got between 10 and 20 seconds to answer each one. Are you ready to play?

Craig
Sure. Bring it on.

Andy
Okay mate, so number one, what is your favorite book?

Craig
Favorite book is I’ve got a whole stack of academic shit that I read that’s probably, you know, boring.

Ange
Unrelated.

Craig
Yeah, unrelated. So I love reading John Grisham, you know, the lawyer, the firm, that kind of stuff.

Ange
Me too.

Andy
Yeah. Nice.

Ange
He’s good.

Andy
Ange is all over that stuff. Number two, what’s the hardest thing you’ve ever experienced in business?

Craig
Uh, I had a succession plan go horribly wrong when I was quite a young fella, so, you know, literally 30 years old. Quite some time ago now. Uh, but the reason I’m doing what I’m doing now is because that went spectacularly wrong. And I didn’t have the experience, skill, or knowledge that I have now to help sort it out.

Andy
Mate, that is absolutely awesome. And I, and I know it’s weird when something goes horribly wrong that we say it’s awesome and you can see the excitement like it was the best thing you’re pretty much saying that happened to you at that time.

Ange
We have the same story.

Andy
We have the same story. And a lot of trade business owners do the same. Like, if you are going through a heap of crap at the moment and you just wanna crawl up in a ball and give up, sometimes that’s the bit that gives us that mental toughness to push through and be better and gives you a chance to achieve and learn from those mistakes. Like all of us, every business owner, we’ve all made thousands of mistakes, but each time we get better and better as we go.

Ange
No better person to be teaching this stuff now then, is you.

Andy
Yes.

Ange
Having been through it.

Andy
So what’s the one piece of advice that you’d give to trade business owners out there?

Craig
I would say begin with the end in mind and start now. Don’t wait.

Andy
A hundred percent, mate. That is perfect. Buddy, it’s been so great having you on here today, Craig. You are a wealth of knowledge. You’ve obviously worked with us quite a bit at Lifestyle Tradie and our, and our teams and our community, which has been amazing. You’re an absolute legend and thanks so much for giving the time for The Tradie Show today.

Craig
Pleasure guys. Thanks for having me. It’s always good fun.

Ange
Well, we’ve actually had you on stage specifically for our diamond members in the past, and they loved the depth of your knowledge and the generosity that you shared. So thanks so much. And I’m sure our listeners today gained a great deal from this particular episode and are now ready to think about reducing risk and adding value to their business.

Andy
We’ve actually also, um, I noticed to you, Craig, that you’ve actually got an ebook. Is that right?

Craig
Mm. So I’ve written an ebook around the key learnings and the key processes that you need to put in place to get a succession and exit plan strategy right.

Andy
Perfect.

Ange
Excellent.

Craig
If anyone wants a copy of that, we’ll make it available, absolutely.

Ange
Perfect. We’ll make sure we pop that link in the show notes for everyone who wants a copy of that. Thanks again, Craig, I really appreciate you being with us here today.

Craig
Perfect, guys. Thanks for having me.

Ange
That was such a great conversation. No doubt. So eye-opening for all you guys out there.

Andy
Yeah, it was great. Craig’s an absolute superstar and he obviously had plenty of different strategies that you could use in your business if you wanna look at exiting someday.

Ange
Yeah, and you know what? Let’s be real about it. Maybe you don’t wanna sell just yet, but preparing for this will help you lighten the load of you actually not being the bottleneck within your business.

Andy
That’s right. And I’ve had a lot of people say to me, I never wanna sell my business. I’m gonna hand it down to my kids. And that’s okay.

Ange
What happens if they don’t want it?

Andy
Well, that’s another thing. I don’t, I don’t know if my son Isaac wants it. He’s like, I don’t wanna be digging trenches all day. You know? And mate, we use machines these days, you know? But the big thing is not everyone wants to sell their business. Right? You know, a lot of people like it, but I want to keep it forever. And that’s fine. But that’s why at Lifestyle Tradie, our tagline is the freedom to choose. Set your business up. Set the right structures, set the right systems, start to maybe step outta your business a little bit, but it’s always there and it, you could sell it one day because in five years, 10 years, 20 years, things just definitely changed, don’t they?

Ange
It’s a choice. To your point, get your business to a point where you have choice to do what you want.

Andy
But I definitely recommend you’ve gotta get a head start on it right now. You should be making these decisions right now.

Ange
Absolutely. Well, we might leave it at that and catch you for another episode next week.

Andy
Hell yeah. And we’ll chat with you very, very soon.