Thomas Green here with Ethical Marketing Service. On the podcast today, we have Phil Fraser. Phil, welcome.
All right, good afternoon Tom. How are you doing?
Marvellous. Would you like to take a moment and tell the audience a little bit about yourself and what you do?
Okay, so there’s two parts to who I am, really. I spent 18 years growing a business from kitchen table, start up all the way through to a PLC sale went through in 2018. I’m now working as a business coach, I call myself a business sounding board, working with SMEs to help them grow their businesses. So passing on the experience that I learned over those 18 years and hopefully helping other businesses to try to be as successful as we were.
Thank you for the introduction. It’s a nice segue into my first question, which is you position yourself as a sounding board for those that don’t know what is a sounding board, a business sounding board.
Okay, so there’s a couple of ways of looking at it in terms of, okay, what do I do? I answer that whole policy thing of it’s lonely at the top. Now, when you’re running your own business, there are certain aspects of the business that you just can’t discuss with other people, you know, you can’t, you can’t talk to your sales manager and say, look, hang on, we’re a bit in the shit here, what should we do next? And as a business owner, you’re the one the team come to for the answers and, and sometimes, and many business owners will know this. And I had a, when I was running my businesses, I don’t know I’m making this up as I go along and actually, you know, to have somebody, you can sit with them without any prejudice, without any bias, without any politics and completely openly say Phil I’ve got this issue, I don’t know what the answer is or I’m thinking of doing this, does it sound stupid or I’ve got four ideas. I’m not sure which one’s the best one. Can you just listen to me or even working as a somebody to really be responsible for?
So if I sat down with somebody say, well two weeks ago you said you were going to do this, have you done it? You know, one of the beauties of running your own business is you can do whatever you want, you’re not responsible to somebody and that’s good because you can take your business whichever way you want. The bad side of it is you’ve got nobody saying, well, did you do that? So the sounding board is sort of part mentor, part business coach. but very much, yeah, I’ve been a business owner, I’m just slightly further down the same track that you’re on, how can I help you something that you mentioned, which I’ve found is totally applicable to me, which is having someone to talk to about maybe things that you’re Not 100% sure on just having that conversation can sometimes give you the ideas. So if it’s all in your head, then that’s kind of where it stays and maybe you don’t make much progress in the way that you would do. And if, unless you spoke to someone and when you speak to someone, maybe that’s not even them that gives you the answer is yourself.
Have you ever found that to be the case? Absolutely. That is 100%. The thing. I will often have people who come to me and say, will you just listen? And all I do is prod and poke. You said that what’s the benefit of that? And you know, after an hour they say Phillip’s absolutely fantastic, thanks and I’m going to do it. And I think, well, I actually didn’t actually say anything and I sometimes compare it to in Harry Potter, but it’s been a while, so Dumbledore has a pensive if you remember where it takes the sort of pulls memories out of people’s minds in effect and that’s what I’m doing is the answer is in people’s heads. I’m just prodding and poking the corners where they find the answers themselves, which they either knew or they ignored or they hadn’t thought of or were there and they didn’t think that would be the answer to the problem. So a lot of the time, it’s just, and it’s that concept of verbalising something solidifies it.
So if you, like you said, you’ve got an idea in your head, you start rolling around. If you actually say to somebody as you’re saying it, it solidifies and really get to the end of the sentence and think, no, that’s bullets, isn’t it? Well, you get the end of the sentence and think, yeah, yeah, that does, that does stack up. Yeah, it’s a good idea. And I have not done anything. I’ve just sat and listened. So that’s where the sounding board thing comes in. Although a bit of it is also imposter syndrome in me, not wanting to put my head above the parapet go, yeah, I’m a fantastic coach, I’ll make your business 10 times better. Well, as I mentioned before, we started recording and what’s your story, which I will put in the show notes for other people to watch because I think you were super prepared and you went through it with, you know, your screenshots and stuff. And I think that’s probably the best video regarding your story that, you know, we I don’t think I would be able to get better than that than what you did there. But what I did have is a bunch of questions that perhaps might be valuable to the audience, which I think are going to be applicable.
And one of the things which I think you emphasised a fair amount in, in the story was when you hired someone who challenged you. So um, I mean the way I put it is like a leader, someone is going to lead your team but also challenges you as the business owner. Would you for people that perhaps haven’t considered or done that themselves, would you like to elaborate on why that was beneficial for you? Okay, so there’s a sort of precursor to that before we finally sold the business we had put the business up on the market for various reasons we didn’t sell but we always had a plan B which was to bring somebody in to run the business while I took a step back and that’s where bringing in a number two came in. I’ve actually written a whole blog about it. So if you go to, we’ll talk about my website later. But if you go to my website is the whole story about how, how to recruit the number two. But one of the things he said to me in the initial interview was are you really ready to let go?
Which was a really pertinent question because if you know when, when you be running your own business, you’ve been the boss, you make the decisions, you make the calls, you decide what goes on when you bring in at number two or a CEO or a second in command, whatever you want to call them, you have to give them the rains to be able to make those decisions now. Yeah, there is something inherent I think in all business owners that they want to be the general, they want to be in charge. So actually you have to be self-aware to be able to go look, this guy is going to make some key decisions. I’ve actually got to let him make them whether I think they’re right or wrong. because that also then sends a message to the team as well. So the first time one of your team comes into your office and says Phil can we discuss this? You have to say no go and speak to the number two. But what he does do is it challenges your thinking because there’s a business owner you’re going to, you know, we’ve done it this way. We’ve always done it that way. And this is the, this is the road map. When somebody comes in and goes, well actually that roadmaps either wrong or what I can improve it or we can get from A to B.
But we don’t go this way we go that way, you have to allow them to do that. And a lot of that trust is built obviously by experience, but a lot of it is built inherently when as you do the recruitment process because you’ve got to get the right person on board. It’s a learning process because you have to learn, you have to relearn what your role is because your role becomes limited because some of the stuff you were doing as the boss, you give somebody else. Some of the key things I found was that actually I recreated my reason for being the business. Whereas he took some of that stuff away the day to day, the management staff for sales strategy. My role was developing him and looking at the bigger strategy, but also being the bit that the proper grown up business owner whose role is actually to put the tools in place to allow number two to make the decisions he does. So if he says we need another web developer, we need of the salesperson, you as a business owner, right?
Yeah. The funds are there to do that. So it’s a fascinating process because it challenges lots of different things, but some big step change. It’s quite interesting that he perhaps had the foresight right at the beginning to say, are you sure you’re gonna let me make some decisions here? The thing which comes up for me is because I can imagine, I’m sure there are hundreds or thousands of scenarios where people have hired someone to run a business and they have and haven’t done weather there. Have you got any thoughts about that particular? I was one of the things we did, I can’t remember where I picked this up, but one of the key things I thought was obviously the guy’s gonna be able to do the job. You’ve got the skills and all that sort of thing. But I thought one of the key things I have to get on with this person on a personal level and what I did was we went through also recruit consultant but what I did was the centre of circumstances. I want to go and have coffee with all the applicants before we do an interview.
But no TVs, no meeting room with coffee and a chat just to get a feel for connecting with the person and that was fascinating on a number of levels. But one of the key levels was people drop their guard. You know when you go to an interview, you’re on your own interview mode and you know, you got all your questions ready and all that where you see yourself in five years, all that sort of stuff that we get told we’re supposed to do, just go, right, go have a coffee pre you know pre interview and it takes lots of people and put crosses in that. So I think a lot of the planning is important but that as the business owner, I think the key is you have to be ready to let go and I think that’s difficult for an entrepreneur because that’s not the way we built, we are entrepreneurs, we are business owners because we want to do it our way we can do it better than somebody else did. We’ve got that burning passion and then to say, okay, you do it, yeah, it’s a tough one. But again, there’s lots of preparation is gonna be replaced.
So things, you know, we had a b hang on the wall, big hairy, audacious goal, which obviously you heard from Jim Collins good to great. So as long as you’re heading in the right direction, it’s a question of just how you get there and if he, you know, if your number to decide you want to go this route or you have been one of the things he particularly did with over probably every year process, got rid of two or three members of staff and brought in two or three new ones now, is that pointing the finger at me saying, I’ve recruited shit staff, you know, it may be, obviously may not be, but you know, as a business owner, you gotta hold your hands on the go again, if you want to do that, knock yourself out sort of thing, there’s a big trust element in it, which is why I think that the coffee worked really, really well. You just, the key thing is you’ve got to have clear parameters and be willing to let go. I think they’re the they’re the important things and an emphasis on the, when you’re hiring do as much of due diligence as you possibly can because you did, was it three interviews?
Yes. So we did with everyone, we did a coffee, we then did this sort of formal CV took me three good career, that sort of thing. And then the third one we did. So the second one was like Can you do the job? 3rd interview was okay. If you got if you got the position, how would you do the job? So we actually gave him a scenario that they had to do a presentation for. And actually we went through this process first time around and we got to the end goal. We have 11 lady who was who was up for it and we just didn’t think he was right in the third interview, we went all the way back to start and started again. And so the process is important, interesting. One of the things which you said was beneficial was the weekly 1-1 staff meetings. But what I didn’t yet from that was, what was it? What was the change? So the before and after in terms of why that was beneficial. That came from a podcast I’ve picked up on holiday called manager tools, I think they’d be the website’s manager hyphen tools dot com.
And it’s been going for years and years and years, but these three basics to their management training, one is one of ones when his delegation one is feedback and the one on ones were something that’s key to them, which is the business owner or the team manager has a half an hour meeting, that is fixed in the diary every week with every person. And it’s the person who you’re meeting with. They set the agenda and it’s not a work in progress meeting. It’s not it’s not even an appraisal, it’s just okay if we were doing time, okay, what we’re gonna talk about this week and it might be something at home that’s pissing you off. It might be something that work that’s pissed you off. It might be you just want to talk about your career, your training, It will be all sorts of stuff. And what there’s obviously a lot of psychology underneath it. I think it says to a lot of people, yeah, they care about me, they care about my opinion.
They care about where I’m coming from. They care about the issues are, but I think from a business point of view, the more you understand your team and your team members, the more you can mould and manage them to do what they’re there to do. So in our one on ones had some staff who would just keep it focused on work in progress. They just didn’t want anything else to happen. Other team members I heard about grandparents and dead cats and boyfriends and all that sort of stuff. But if, you know, and you show you care what’s going on, your team’s mind. So I think That really, really helps. And also, if, you know, if your company does say six monthly appraisals, which I think are terrible. Um, yeah, it’s going well five months ago, I had this issue absolutely pointless discussing it five months later. You know, if it’s I’ve got probably debut sits next to me, he’s got BO something really minor or, you know, I’ve forgotten a boyfriend and I’m moving out, all these sorts of things.
I think it’s at the personal level. Like I said, some people didn’t like them, some people wanted them, but you have to say write these and manager tools is brilliant. I would strongly recommend anybody who’s wants to develop themselves as a manager, brilliant, very American, but great stuff. Yeah, it makes me think of a conversation I had around, I was trying to get better at rewarding staff members. Um, and someone introduced me to the concept of intrinsic versus extrinsic motivations, I think was the term used, and extrinsic would be like pay bonuses, that sort of thing, intrinsic would be about what’s important to them. And I can see how you might be able to know them better in the way that you highlighted would be easier to um, make those distinctions, what do they care about and how can you facilitate that, essentially?
Absolutely, absolutely. And, you know, the bigger your team gets, the more varied the type of person you have a, you know, inevitably you will have that and it’s, you know, part of it is just about caring about your team. Part of it is motivational. partly I think particularly I think particularly junior staff, just like the fact that, You know, we think our team the biggest, we got to about 13 junior staff thinking about the boss is interested in me enough to give me half an hour every single week. Whereas the more senior people think I’ve got, I’ve got hot line into the boss, I’ll give them my idea as to what’s going wrong with this business and how it should run, which we, you know, which we also have. Yeah, I’ve also done had a lot of conversations around servant leadership and the theme there is to talk with your staff, be seen, be approachable. So there’s a lot of, there’s a lot going on there with those weekly 1-1 staff meeting.
It is, it is, and you know, I’m sure people are listening to this going, hang on, I’ve got a team of six and that’s half an hour each and then there’s the preparation before an appropriate, that’s four or 5 hours a week, I can’t afford that. We’ll tell you what it’s worth it and as your team grows and you know, it then feed it down to reports. So you have, Let’s say you’ve got 10 or six you would do. Yeah, you do the one on ones for the three heads of department and the heads of department would do the one on ones with what the Americans call their reports, people reports to them. but it’s fascinating stuff. And one of the things that’s great manager tools was all about feedback. They got brilliant feedback model, which I tried a few times word for word for the way they did it. And it was just like magic. It was it was just to explain it was I went to the exact word because I can’t remember it. But it was basically it was it was one minute feedback was tom can I give you some feedback? And like immediately, you go shut up in trouble.
But actually what you’re doing is giving positive feedback tom when you when you did that, that was really good carry on doing it. And that’s it. And you go to hell and it’s all about it’s about actions rather than, you know, and it’s just it’s really, really clever, really clever stuff. Yeah. You mentioned your national tv advertising in your story. Yeah. As you know, I’m interested in that topic. So I mean in terms of process of how you went about it and then results and tracking the results, can you tell me a bit about that?
Yes. So we no, just to give you just to give you list as an idea of what we would do well under web cycle, which bingo which was basically the Trip Advisor for online bingo review site. And we were very clean to be Number one but very much the go to place to go. And obviously you can, you’ve got all my business, the big thing is CEO and traffic and PPC and all that sort of stuff. We want to go level both that. So we thought okay how do you do that? The best way to do is T. V. Which again was quite a big scary thing because we’re only a website, that sort of thing. Fortunately my background was advertising. I worked in that agency for six years before we set the business up. So I sort of had a feel for it. But we used a local agency who I knew we gave him a really tight brief We gave them a budget and they did the media buying for us and the beauty about tv media buying very like people see me you’re buying if you set yourself a really tight target you can get really talk to results on pretty low trafficked Tv channels the sort of, yeah the sites you get to at the end of the day when you’re really bored and you can’t think of something to watch who watches this stuff. You know those sort of channels. So the aim of the campaign was partly branding and partly traffic. The thing with because we were an affiliate.
So although our site as a destination site, we make money in essence from people then going to two brands are advertising on our website. So we reckon we broke even on a financial point of view within three months. But the big upside was the fact that we were on tv because that position does in the market as this isn’t just a WordPress hobby site out of his bedroom. This is a proper big player. And it was part of a bigger campaign to really position as a major player in the industry. We also produced an annual industry report. We also ended up doing industry awards as well. So it is part of the big picture. Um, and I think still, even nowadays you say somebody else, you know, our company, we advertise on tv. That’s cute. Yeah, people give you kudos for doing that. So it was part of a bigger picture rather than just, you know, we spent x we get way back. Is there any chance that you think that it helps you with the sale of the business at all?
Yes, probably because it was part of that positioning of the decision. I mean, uh, I say we were an affiliate website and yeah, it’s very easy to knock up an affiliate website on it in any sector. So it’s a very low barrier to entry. So we had to really, we had to be the titans in our sector. And it was part of that. And obviously from a, from an acquirer looking into the sector Gurak Who’s The Number 1? Who’s The Number 2? Yeah, It’s them, they have their own awards there on TV. They run an industry report. Yeah. And that’s before they even look at the numbers and the traffic and the revenue and all that sort of stuff. So yes, I think you probably did as well. Well, it’s pretty good investment then I suppose, especially if it ended up being free for you. I think you mentioned the awards ceremony. I think it’s really cool that you, because essentially it’s a decision. Right. I’m, we’re going to just, um, make our own awards ceremony. Can you tell me a little bit about the process that you decided to do that, how it went? And then you also mentioned some celebrity PR which I think again, he’s going to be of value. I’d love to know a bit more about that.
So very early on the website launched initially in 2000. So we were there. So right from the start and very early on in our journey. We, we created an awards site of the year in new site of the year, which in essence we’re player voted. So it was a traffic driver come to the site to make the vote, um, a bit of PR on the back of it and we email the winner and go, hey, you want outside of the year award and they got a little graphic and hopefully they link back to us. So we get some link, we get some link juice as well. So it’s really, really basic, really basic traffic and SEO stuff. Um, and over the years, that sort of group and a couple of members of my team said we should do this proper awards. Um, and our industry had a couple of broad based, we would obviously part of the online gaming sector says online casinos, online sports betting, online poker and online bingo was part of that.
There were a number of industry wide awards, which was sort of big dinner jacket, dues, spend a fortune on that sort of thing, which fortunately we won quite a few of as well. So I was my mindset, nobody’s going to come to our award. We’re just, you know, we’re just a website and eventually I gave in and the main protagonist, I said, right, okay, you can project manager. So we went through the whole process of, okay, we need to, so we found like an events agency up in, we’re in Leeds, you sort this out of venue in London. And then we promoted it to all our clients and said, look, you know, we’re doing this awards ceremony and you’ve got to, you’ve got to promote these awards because you want to win what you want to win one of these awards. And you’ve got to promote into your players because they’ve got to come to the website, um, to vote. So it was it was it was sort of part PR part branding, part traffic, party CEO, all sort of rolled in together. And we took the decision quite early on, particularly the first couple of years was this was a marketing expenditure.
So it’s going to cost, you know, I think somewhere between 15 and 20 grand or something quite hefty, but it’s worth it because again, it’s part of the whole positioning thing. And so we all took a trip down to London and we put this event on and it went amazingly well, so we did it, we started doing it every year. And the second, it was the second or third year, we did it in Madame Tussauds. So we were going to do it at London Zoo and for whatever reason they couldn’t host. And they said, well, you know, we’re part of the same group as Madame Tussauds. You wanna do it there instead, we will do it the same cost. Yeah, of course we will. So we did that amount of disorder. And it was sensational went absolutely brilliant. But one of the fantastic things that happened was, and one of things in online bingo sector was very easy to, to produce a new bingo site, it was just a re skin. And one of our clients have done a deal with Kerry Katona who is great for PR called bingo with Kerry, which is great because obviously it’s hard to write at her audience.
And it was the year that she launched. So she was part of the new site of the year and she won. So we got loads of photos with Kerry Katona holding one of our awards in front of our we created a we got some sponsors, but we’ve created a board like you get when it manages talking at football, you know, all the brands and she promoted it and it got promoted all over the place. It’s absolutely fantastic. But again from a visit from a branding and positioning point of view, it was fantastic because the whole industry wanted to be there. Everybody wanted to win the world we should do afterwards. We turn up at people’s offices and, you know, they had him in reception behind the receptionist and all that. It’s just fantastic. And they all took pictures and selfies and they promoted them around and they said, hey, we want to, which being awarded and it just worked fantastically Well, I think we broke even on it one year, I think with a sponsor, but it was worth, you got any thoughts on, because I can see it being highly beneficial, but in terms of how someone might do that when they’re in an industry.
So they’re not like because you can promote other people and it’s not a problem for you, right? You’re in an industry, have you got any thoughts on that? I think you have to have, it’s a little bit chicken and egg. I think you have to have the kudos to be able to do it. So you can sort of start up a business six years ago, right? We’re gonna be, we’re gonna do the industry awards. Who are you? It’s gotta be legitimate. So all of us was clean and above board. It wasn’t paid for none of that sort of nonsense that people do with industry awards. And I think there has to be some value on it. you know, if you said with all due respect, hey, you’ve won the Thomas Green award this month and they go, why, what is it, you know, it’s got to be, it’s got to have some cute offset. So it’s a bit chicken and egg. You have to, as a, as a part of that industry, you have to have some kudos for it to have some value because then potential winners will value it and then they will market it. And yeah, so it goes around in circles. It’s a bit, yeah, I use Trip Advisor is the example if you go to a restaurant now and it’s got Trip Advisor sticker on the window and you know, we’re a five star Trip Advisor restaurant.
It has some kudos if it’s the John Brown restaurants of the month award, John Brown, you know, but it, but as a, as a branding and positioning, I think an awards ceremony is fantastic. Well, John Brown’s got some code Ocean Al though, because you just mentioned, everybody’s gonna want to John Brown restaurant the world now, like. Exactly. Well, yeah, I get the idea is kind of like a snowball effect. Right? So you have some authority build up over time and then you might be worth something, But just the idea that it was just an or an idea in someone’s mind and then it came this big thing is just, it’s just one of those cool things that no story to listen to. There are lots of ideas. There were lots of ideas we had that didn’t get off the ground as well. I would discuss those. Well, I mean, that’s really intriguing during the conversation, isn’t it? But um, that the important thing, I think you mentioned someone in your story, I think it’s like a linked in profile that you, that you highlighted and I think that person advised that you started recording regularly your stats.
So stuff that maybe people should be doing, that they aren’t doing and correct me if I’m wrong, you started getting more disciplined with that and it hasn’t had an impact on your business. Do you mind sharing that? Yeah, sure. Yeah. So we had, I mentioned getting at my It was his job title was commercial director. My number two. and we were a couple of years in, we were discussing strategy, in which way to go and all that sort of thing. And we had like, three or four ideas. So we actually, what we did was we said, we’ll get a consultant and see what he thinks. And he did a number of really brilliant things. One of which, which is dead simple and I’ve done it with a couple of clients already was he did a 360. So he interviewed every member of staff, you know, what’s good about the business was part about the business, where do you think this opportunity is all that sort of and fed that back. But what he also did, he came from a manufacturing background.
So he was very numbers and widgets and pounds shillings and pence and the whole sort of thing, which we weren’t because the business was owned by myself and my wife, there were no shareholders, there’s nobody report to it was we kept an eye on the important stuff, but not some of these secondary sort of KPs. And what he said, he sat down with us and said, okay, this is this is your financial goal. We had the number we were aiming at, he said, okay, what are the, what the key parameters that, that will make you make that happen. And, you know, she thinks our sales and stuff like that, but it was things like traffic and various, we ended up with seven or 8 different parameters. And he used a system which was, um, he called it a weekly drumbeat meeting and it was a stand up meeting once a week. And so what we’ve done is we determine what these parameters were and we determined what the target was for those parameters.
And then each week we put them, we do a five-minute drumbeat meeting when people reported what those numbers were and they were the red or green. So yes, we’ve hit it or no, we haven’t and then it was a tubercular, if we haven’t hit it, hit it, what we’re gonna do to hit you next week. And that made us a lot more formal in terms of what we were trying to do rather than the way the business did run previously, which was sort of just roll with it and we’re doing okay. So yeah, we’ll carry on doing it. It was a lot more what I call grown up business, whereas before we sort of, however, it happened, we were doing quite well and numbers were rolling in. So yeah, we’re currently, well, this was, he’d come from a big thing from, from appeal. See, I think previously, um, so he gave us some proper grown up parameters and what that did, that contributed to when we finally sold probably 23 years later, we were in much better financial health than we had been because we were looking at numbers, we were looking at the right numbers rather than just some of the numbers we wanted to look at. I can imagine the spreadsheet being highly beneficial as well.
So if you’ve got a load of red on there, something’s very wrong. And if you got a local, you know, you’re going in the right direction. Right? Absolutely. And one of the things that was, that was what you did was, I think if I remember right, there was an annual figure in a sort of a monthly figure, so we knew which direction we’re going in. So a lot of time, obviously the annual stuff was red because obviously it was annual. You know, you’re not gonna hit it towards the end, but a weekly or monthly stuff, we’re agreeing to week one for sale. If you had a figure for sales, One might be red, week two, might be read three, might be green because we’ve hit this month’s target are fantastic. You know, the weak force, even greener, if you, if you can have it even greener. But yeah, it may just focus on because we’ve done this whole process. It made us realise what the key parameters were, that were, that were key indicators as to we were doing the right stuff. So it wasn’t just, Yeah, we’ve sold 50 grand’s worth of stuff this month. Fantastic. It’s actually, we’ve sold 50 grand’s worth of stuff because this parameter, that parameter in this parameter, we’re going in the right direction, Whereas previously I think we just went over 50 grand this this month.
Well done. Yeah, there’s some sounds like there’s some 8020 in there as well, focusing on all the right stuff, yep. Absolutely, really interesting. So it brings me to kind of, my last category point, which I think is probably, it’s going to be a big, big part of it, and that is the selling of the business. You’ve got a successful exit. But my guess is that there’s a whole big story about that process and I mean, I got from the story video that someone outbid the original buyer, but you know, I’d love to know about the process, how it went. Pretty much lead up right up until the funds go in your bank account. Yeah. So yeah, we could have, we got another half an hour, we can give you the whole thing. So, after I mentioned, we were in the online gaming sector, in the, in the sector, there were four or five big uh, acquisition companies who were just buying up smaller businesses.
So it’s quite an active m and a market and a lot of that was public. So we knew who was buying what and particularly interestingly how much they were broadly, how much do we pay? And over the years as we’ve grown, we’ve had quite a lot of people who come to us and said, are you willing to sell? And I’d always said the same thing, which was, you know, if you put enough money on the table, you can have the kings, you know, very simple. We’re not for sale. But um, and for whatever reason I’ve gotta draw full of India. Yes and no, no deal happened anyway. So we were approached by one of these quiz eaters who said, right, we’re interested in buying you and gave us an indication of the number, uh, they’re willing to pay. Now, that number was big enough for us to go. This is quite interesting. So we went down to London met them. What transpired was the number that they said or alluded to was lots of caveats and lots of yes, well and all that sort of thing. So I thought not right for us, but what I did because it’s quite small industry.
I basically spoke to the other acquisition companies and said, look, we’re off sale, but if you’re interested, you might want to talk to us now because you were talking to somebody else. And one of those countries came forward and said, we’re interested, got quite a long way down the line with them. And what happened was one of the other companies who previously said, we’re not interested actually came out and said, well actually we are now, I’m very much a man of my word and I don’t like going back on deals with people. And we were actually just about to sign an N. D. A. With the second company and I said to the other guy said, look, if you’re gonna do it, you’ve got to, you know, you’ve got to move the dial a lot further so maybe change horses. And they came back a week later said right here is a number which was not only, here’s a number of it, but a very a more improved structure from the financing point of view. So I had to go back to this.
These are the guys, there’s a lot of really, really sorry that, you know, this isn’t a negotiation thing. We’ve been approached by somebody else. We’re going to go with them while they were pissed off. I didn’t like doing that. But these things happen. And actually, what transpired was we, I did the deal over the phone that females with the CEO quite quickly because he was somebody I knew before. But then we had 4.5 to 5 months of legals, partly because they were, although they’re A PLC, their non UK. They had American trained lawyers, we had all the English lawyers and American law and English law is like speaking two different languages. That complicated things because they were a PLC, the sales director wanted his temp anything the deal, the Finance director, he did something in a deal. The CEO wanted something strategic. So we had lots and lots of backwards and forwards. Just, it was annoying. It was like changing like two sentences and we go around in circles and they changed that third sentence to change.
So it took about 4.5 to 5 months from agreeing the deal to signing the deal. We had a three month handover. I was asked very early on in the, in the, in the process, do you want to stay on? I said no, just give me the money. I’ll walk away with a three month handover. The payments were structured throughout that three months. And Well two of the hardest things I ever had to do were the day I to walk into my team a team meeting and say, hey guys, we’ve sold the business and they don’t want you, they didn’t want any of our staff, which was just horrible thing to do. And we really, really horrible. It took me three goes to get out of my chair and to get to the door to open the door to go to the meeting room. It was just really, really difficult. So that was, that was really difficult. And then the final day that we actually work for three months later was we’d handed everything over.
And yeah, over a three month period we’ve almost got to a point where my team was saying look for what to do, just hang around and whatever. And then the last day it was a Friday closed up, the office went for lunch then or went to the pub and one x 1 people were going, that’s right, okay bye. Not like see you Monday, it was like okay bye. Which was just heart-breaking. It really, really was kind of weird. It was just really, really, really weird. And yeah, the good thing, the good thing out of it from the team’s point of view is over that three months. I said two more. Look gets another job, you can go to many interviews is you want as much time off as you want. Plus they also got a loyalty bonus for staying for the three months. So a lot of them sort of left on the Friday, got new job on Monday, I’ll give you a better money. And they were all fine during that three month period a lot and said to me, you know, I’m really sad about this because I really want to stay working here.
You know, you’ve done the right, you know, and they all said you’ve done the right thing, not really like working here, which is a real, you know, it was nice and what’s really nice is I’ve kept in touch with at least six or seven of our in touch with almost will kill monthly basis. And One of one of the team I’m still playing five a side with. So that’s really, really nice that they, you know, they do keep in touch and a couple of them have come to me for advice, which is great. You know, we must have done something right somewhere along the line. Is there any possibility that when you go back to the original buyer um, that you then lose both your buyers if the deal doesn’t go through? you could do, you could do, you know, until, until with any deal, until you sign a piece of paper actually it’s not even until you find the newspaper until the money lands in the bank, you know, there’s always going to be issues. and this was one of the beauties of the deal we did. It was, it was quite clear on the cash, it wasn’t, there wasn’t an earn out, the work wasn’t subject to figures, It was, you know, that’s the money, that’s how it’s going to be sliced.
That’s the dates it will land a couple of them one caveat it on stuff we had to hand over, which is fair enough. Yeah, on any deal. And you know, I I’ve got a very good friend who is a business broker or works in corporate finance, that sort of stuff. And he said to me, he advised me a lot during it just as a whole hand holding sort of going back to sounding board thing, we started right at the start, you know, just yeah, one of the things that people always say in the business owners don’t tell anybody, don’t tell any of the team and carry on doing business as if it’s not going to happen, which is why when the day I walked in and said right, we sold the business, everyone’s like what? You know, there was nothing, there was no sniff of anything. But that that whole everything has to carry on. You’ve got to assume that the deal isn’t going to happen until the first the first pound piece of the bank. And you said it took four or five months, is there anything that you would have done differently to ensure that didn’t happen? Let’s say the next time around. I mean our lawyers were saying quite early on you have to get them to get some English lawyers on this.
That was the first thing I think, and I don’t know why it was we spent a lot of time heads of terms rather than on the on the SPA. But I suppose if you do on the heads of terms, you don’t do on the SPA. I think they were the only the only things really you know, we were say we’re doesn’t strong business there a PLC. It’s quite hard to, so stamp you four, particularly when you particularly, and when this sort of parents signs right in front of, and that’s the danger. And that’s always the danger. I think with anybody who’s thinking of selling their businesses, they start spending them psychologically start spending the money and they take their life the business because there’s so many things that could go wrong that you’ve got to assume it’s not going to happen until it happens. Because if it had, if, you know, the day before we signed, if they said, you know what, we’re not going to do it, my team and my business just has to carry on the same numbers.
Plus also, you know, if it’s taken four or five months and you take your eye off the ball and your numbers are starting to drop, they’re going to come back to and say, well actually, you know, before you were doing x, you’re now doing why we’re going to chip the price. So it’s in your, in your benefit to work even harder. Is there, what are you doing on the day that the money landed? And what was that like that process? What was it doing? I think I was in the office, but the, it was, it was like the first trench landed in, in uh, my wife and I actually was in the business account and, and it was quite big and I just I just looked at him. Hell it took it took a script, sorry, excuse the language, took a screenshot of the bank of your online and just sensitive wife and it was just like we didn’t have very professional, very business-like, but when it does happen like that you just go what?
That’s ridiculous. So yeah that was that was That was that was that was fun one because again it because it was. It got it got slightly complicated and because they’re a PLC various people have to sign different bits of paper so it’s like oh it’s going to land at 10 o’clock in the morning so No 12, I’m refreshing the phone and it’s not there and pressing They’re five on my computer. So I called him at lunchtime, you know the F. D. Hasn’t. Isn’t in this morning, oh all he’s gotta do is sign this bit of paper to make this money go across. So those sort of things pretty more stressful, you know because they’re, you know they’re appeal says, you know, he’s probably in a pile of five or six different bits of paper has got to sign and mind just one of them and I’m thinking so and the bloody bit of paper to make the payment go I was going to say we’re hitting the refresh. Oh absolutely. My five just has an f on it. Yeah. Anything to know on the you know for others about the concept of selling a business.
I think one of the one of the key things we learned was there’s two or three things and I think one of them let’s get your CEO so you’re getting at CE0. Or a second in command in place is important because you as the business owner have to make yourself redundant to sell the business. You know if you take a very simple example if you’re a plumber and you’re a one man band you can’t sell the business because you are the business. You extrapolate that out. You need to get to a point where you are yes your important business but you’re not important the data running of the business. So the first thing is you have to get yourself out of the business, makes that redundant. And the best way to do that is to do it is to do something somebody told me was called a two week holiday tests. If you go on holiday for two weeks what happens the business does it carry on and runs fine or you sat by the pool on your phone every day because if you are you haven’t got sellable business that’s the first thing I think the second thing is to understand the market prices.
So if somebody comes to you and says I’ll give you a million pounds for your business you might go hey, that’s fantastic. But actually, if you don’t know what your industry multiples are, you don’t know whether that’s a good price or a bad price. Did you do any evaluation for your business? Yes. So we, what happened was, as I said earlier, we are sector was quite public in multiples that were going on. So we knew what a good offer was, what bad offer was. So we had an idea of, so we looked at it as multiple. So I think the industry multiples were something like 5-5. And I think we got, we got more than that. So you have to understand what you’re in and also on what your industry values on. So is it on profit, is it on average annual repeat revenue? Is it on turnover? Is it on staff basis on customer numbers? You have to understand your industries metrics and what those multiples are to then go, there’s actually two things you can do number one is, you can then say, well if somebody offers us this is a good price.
But price to do it the other way around because Somebody again said to me the first price that everybody wants their business is a number of shareholders times £1 million pounds because psychologically every wants to walk with a million pounds. So if you know what the multiples are, you can say, okay, well if we all want to walk away for a million pounds, we have to get to this figure because that’s what the industry is buying at and we can work out. But you can’t say I want a million pounds of my business if the industry multiple is three and you’re making 100 grand a year. So you’ve got to understand that the first thing is makes that redundant. Same thing is understand the market. The third thing I think and we failed at this was because we were privately owned. As I said, it was just myself and my wife, we didn’t track data, the way the industry track data. So the way, so when a buyer came to us and said, you know what this figure, what’s that figure, what’s that rate, what’s that turn or whatever it might be. We weren’t keeping that data because we weren’t using, it wasn’t useful for what we what we did.
We had the data, we weren’t analysing the way the industry buyers were doing it. So the thing to do then is to ensure you are collecting and recording data the way buyers want it. So if they want, if your industry is very focused on monthly churn rates, you should keep a track of your monthly churn rates whether you use that data or not just so you’ve got it because what we had to do, I had to do because nobody else was knew about it. I had to go backwards recreate all these for this analysis from the data we had but in the format they wanted it. So that’s it, that’s important as well. Sounds like a fun job now. One of one of the one of the worst things and anybody who’s got a tech company or anything through the website will appreciate this because it was obviously a website for whatever reason they’re techies wanted to see our code now, you know as the CEO of the owner of the business item, I don’t have any passwords, I don’t know how to log into the back end and stuff like that.
So they said we want to see the code and we see your raw code as well. I haven’t got a password. So I had to create a scenario within the team that we needed to rehash our security and put all our passwords in a file so I could access it and I knew where it was and all that sort of thing. So I sort of lost this request for the back end passwords in the whole company things that I could then share with somebody. So again and again that that was an interesting one because a lot of techies will comment code. So this line of code does this this line of code does that that sort of thing. So somebody else looking at it understands what it is when you’re a small business and you only got a small, webbed f tape? They’ll just code and often not commented. So I had these tech, we have to log in, you know, on Sunday morning. It’s ridiculous with the log in on Sunday morning. So they could see the code and I could watch it over. And what does this line do? I don’t know. It’s not commented. I have no idea. I’m very basic. Html And that’s it. Um, so again, and that leads onto probably the other thing that’s important is contracts because when you buy a business as a buyer, you want it to be as uh, as safe and as solid as you can.
So you want to see your client contracts, supply contract, staff contracts, that sort of thing. If you’ve got a business where Dave Down the road has worked with you for 10 years and you know, there’s nothing in writing that’s inherently of no value to a potential buyer because Dave might just going, oh, I’m off now. You as the seller. You got, well, you know, Dave spends underground with us a year. Where’s the contract? So those sort of things as say, client contracts, supply contracts, um, finance on assets, that type of thing. Staff contracts, all those, that sort of dull paperwork. That again is probably in most businesses somewhere but isn’t in a file that potential buyers can go show me all your, all your client contracts. It’s um, reminds me of what you said a moment ago. Did you call it? Adult business. Adult businesses, proper, proper, proper grown up business growing up. Yeah. Well, is there anything that when you went through your story on that video that you wish you had a bad added at the time?
It’s a very good question. Anything I did. I mean that was, I think the video you’re referring to I think I took 30 minutes or 40 minutes to do. Yeah, it took 18 years from start up to sale. You know, there’s tons of stuff. There’s lots of blind alleys. We went down lots of ideas, um, that didn’t work. Various ideas that did work. I mean, one of one of the things, I don’t if I referred to it and the video or not. One of the things we did, uh, was we borrowed ideas from Best practice from everywhere. So we use, so we had a directory section of the site and, and we said, okay, who’s got the best directory in on the internet? And I think one of our guys with a keen film funding, rotten tomatoes, rotten tomatoes, the film review basis. You get green tomatoes and red tomatoes. So we basically took their idea. We ended up with green thumbs up, red thumbs down and we tweaked in that sort of thing for our new sections. He said, okay, where’s best practice of news?
The BBC news websites. Okay, what does that look like? We built it around that. And so I think, you know, you can take best practice from all over the place. We borrowed an idea from uh, I think it’s amazon who do you know other people like this product? So we on ours was like, you know, other people who looked at this bingo site liked these two or three bingo sites and it just adds traffic and lots of things. We tested lots of stuff and some of it worked and didn’t work. Um, and we were refining all the time, but I think that that’s probably key one is actually to take best practice from all over the place. So um, a business principle that I think has been used a story I think of it is um, it was, I’m not sure which way around it was, but it was, I think it’s like the fast food drive thru was inspired by the bank tellers and cashiers because it was taken from one industry and applied to another or something like that. Yeah, yeah. And the motor, the Motorola flip was taken from star trek.
I didn’t know that one. That’s true parents. Cool. What are your goals, Phil?
My goals as a sounding board. While I’m looking to do is take on, I’ve only been doing sounding board business coaching for about a year. My target is to get 10 clients, which doesn’t sound a lot. But I want to be able to give those clients the best of me and, and the best value. So 10 clients by the end of the year would be great. Very specific. Well, you know, if I get, yeah, The entrepreneur and we’ll go, right, you’ve got 10, well, is it more kind of like a lifestyle business for you? That’s, that’s, that’s the other thing. It is last time I really love talking to people about their businesses. You know, you sit on a train or you buy pool or you’re on your aircraft with somebody, you’re going, what gave you in? And I go, you know, we make, we make pens and most people go to hell, let’s talk about something else you make, depends.
How does that work? How did you get to that market? What’s, you know, what’s the profit margins like? So I love talking to me about their businesses. So it’s an enjoyable thing. And 10 gives me lifestyle enough to not be running around like a had this chicken and I do some voluntary mentoring as well, so that fits in as well. So yeah, it’s a lifestyle business, but I enjoy it and hopefully I can pass some the value of what I’ve learned on my business journey to other people because what you tend to find is most people have similar problems. I think the peer group guy you interviewed a few weeks ago was saying, you know, most people have got a terrorist member of staff. We had one of those you know, they want to increase sales, they don’t have to increase their profit. They’ve hit a wall. Yeah. A lot of people have similar, similar business issues that they need to discuss irrelevant of sector. Well, if there’s anything like this conversation, I’m sure your coaching is highly valuable. Can you tell people where the best place to find you is?
The best place to find me is on LinkedIn most days. So it’s just Phil Fraser. My website is www.philfraser.co.uk. Don’t go to philfraser.com because that’s a medieval re-enactment costume company. So if you see lots of pieces of Robin Hood, that’s not me, you’re in the wrong place. And all my contact details are on the website. If anybody just wants to chat, very happy just have a chat with anybody and if it leads to working together, that’d be fantastic if it’s just a chat. Absolutely fine diplomat.
All right, well, I really appreciate the value today. I’ve found it really interesting. So I’m sure other people will as well.
Thank you, Thomas. Thank you for having me on.