The Construction Business Blueprint #006 - Build to Sell with Connor McAuley

In this episode of The Construction Business Blueprint Breakfast, Marc sits down withConnor McAuley, founder of Kaizen Print and now Move at Pace, to unpack what it really takes to build, scale, and sell a business

From starting in a bedroom to exiting for seven figures and retiring at 40.

If you’ve ever said “my business is my pension,” this conversation will change how you think.

 Connor reveals the exact mindset, structure, and systems that make a company attractive to investors,  and why most founders unknowingly build a business that can’t run without them.

In this video, you’ll learn:
💡 How to make your business ready for sale (and why it’s the same as building a great business)
💡 What investors really check: finances, operations, risk, and replaceability
💡 The power of systems, CRMs, and processes that run without you
💡 How to mature your business from “scrappy startup” to scalable company
💡 The role of branding, positioning, and recurring revenue in raising your valuation
💡 The truth about multiples, EBITA, and how your business gets valued
💡 How to exit and still love business after the sale

 Subscribe for more on construction business systems, estimating, cash flow, and leadership.

COMMENT below: your biggest takeaways and what you want me to create next! 

Chapters

• 0:00 Meet Connor And The Goal Of Exit
• 2:30 Building For Sale Versus Building To Operate
• 6:30 Crisis, Transparency, And The COVID Pivot
• 12:00 Positioning, Pricing Power, And Better Clients
• 18:30 Systems, CRM, And Follow‑Up That Converts
• 25:00 Maturing The Business And Management Layers
• 31:00 Boundaries, Delegation, And Owner Dependence Risk
• 37:00 Revenue Concentration And De‑Risking For Buyers

Transcript

SPEAKER_01: 0:00

Okay, lads, we'll get stuck in. So this morning we're joined by Connor McCulloughby. Connor, welcome to the construction business Blueprint Breakfast. Connor Move at Peace is the latest company, and Connor me and Connor meant I don't even know how we actually came across Path name, but a good chat there recently, had a coffee. So Connor's background is he had a successful exit. I know I sort of shared it into the into the group with everybody. Started off a business just well in nine years from you yourself in the bedroom, the 40 plus staff and a successful exit. So we're just going to have a quick brief talk through some of the clients in the room have had an opportunity or have been approached about acquisitions, about people buying the companies and things like that. So touch base with Connor and had a conversation just around we are sort of our values sort of aligned in terms of what is it what makes a business attractive to external investment or acquisition and it's everything that we're doing inside the program here. And it's something that I feel like always, obviously, I'm always extremely biased and focused on just construction. Um so it's important, like obviously, I feel that there's certain conversations that don't happen in this industry enough. And when these opportunities come, we're like a dear rabbit and headlights or whatever you want to call it, and we're caught off guard. So that's why it's important to have have these conversations already. So when this when this comes, it's something you can work towards, it's an option. Again, it's not just you know day-to-day, week-to-week, there's there's much more um that could potentially be on our on the horizon for anybody in this room. So we're just gonna quickly go through Connor's story. Connor, just want to introduce yourself to everybody in the room.

SPEAKER_00: 1:30

And yeah. So my name's Connor. Um, I started a business in 2009 called Kaisen. Some of you won't know that company, and I appreciate that. Um, it was a print company, a design agency, and a branding studio, and a web development company. So we'll talk about branding and all the rest as part of this if you want later on, because I know there's a couple people talked about that. But I started in the back bedroom, like, and I'm fucking nobody. Really, I'm just a normal fella who thought had an idea in, put a bit of work in, put a lot of work in, built the business up, and in 2020, somebody else stuck their hand up and says, We're interested in buying you. And the company, we always build our company for sale because building a really good business and building one that's ready for sale are just exactly the same journey. So they are. And if you can lift your business up and say, We're profitable, we've got clean books, we've got all our processes in place, somebody will just lift that off you and go, right, we're gonna pay you the price that you want. And that was the story. Um, so 16th of March uh 2020, I'm sitting in the solicitors ready to sign. Nobody turned up on the other side of the table. The world went into lockdown that exact day, and uh, my business was going through the floor. Uh, all my staff are asking me all the questions. Well, what's gonna happen? I opened the books and said, Here's what we have in our bank account: 300 grand. That money will be run done before you guys are out of the job. And that's we we spoke to them, had a good conversation, and we came out of COVID far better as a business because of that. We pivoted and did all the social distancing materials. Our studio was flying because sport was the last thing to the finish and the first thing to start back up. And in November, then the company came to us and says, We're ready to go again. Same price, same deal. We've been looking at your books the whole way through, and you saw we had a good business. Deal went through on the 30th of November 2020, and I exited in 2022 there, the same time 2022. Then I retired at the age of 40 and four months. Um, and then two yeah, about two months after that, somebody put their hand up and says, Connor, come have a chat. I was sitting, I don't know if you remember last or two winters ago, that it was pissing down from September to March every single day. It pissed down, and I thought retirement was going to be class that you get to go play golf every day and you'd be chilling out. I got bored. And you know, if you're all entrepreneurs in this room, which you are, you know, you think like an entrepreneur, you're always on, you're always thinking, there's always opportunity. Your problem is stopping yourself from the opportunity. And I was sitting in the house over that winter going, there's more to this, there has to be more to this. Like, because my daughter's in school, so you can't go do all your traveling that you expected to do. You still do a lot of it, but you can't go away in the in the term time. And so a couple of clients or competitors reached out to me and says, Connor, would you come and have a chat? And I started then this little agency called Move a Peace. And I spoke to Mark about this a couple of weeks ago. We we think like business exactly the same. He focuses on construction, I focus on creative agencies, and that's my market because that's what I know. What there's commonality in business, you're a service business. You 99% of your job is providing a service. Yes, there's a an output at the end of that. The same with us. It was design, it was websites, and so while every business is different, there will be commonality and the challenges you have. Hands up if you've got staffing issues, hands up if you've got capacity issues, right? Fuck's sake, I had 40 staff with 25% of them off sick at one time, right? We were in this period of growth where we were just going like that there, and we had all the issues that you have mental health, sickness, um, divorces, uh other stuff going on. The full the fool works of crap in our business, and sure that falls on your shoulders. So it does. And we had to figure the way out of that, as will you, and it's good that you have Mark and I, you know, conversations that you have with people around this table because they're all experiencing the exact same problems, just at different stages of business. Um, and the same with us, we had the same problems that you have. Now, I was laughing the other day because I don't know that a hammer from a nail or and I can't plug us or wear a plug, I don't know your industry, but I know the problems you're facing in your industry, and I know what a good exit looks like, and it's exactly the same. And today the conversation for me is about telling you the opportunity. Actually, I'm not so I told you that I retired. Um, I was able to retire before selling my business, and that's something that a lot of people don't think about. You know, if you think about spending money and your lifestyle and what that costs, I'm sure a lot of you will find, like I do, that it's easier to earn more money than to reduce your spending because you've got families, you've got lives, you've got all everything, you've got built-in costs to your life. But over the 10 years before I exited, I was like, nah, I want to retire some point. And I spent all that time educating myself, saving money, and investing that money, which is why I talk about pensions and all the rest. I'm not a financial advisor, but that's me. I enjoy that. Yeah, and so the the sale, the exit of my business was my cherry on top. That was uh, you know, and I know a lot of you will be going, oh, my business is my pension, because I hear that from people every single day. The reality is that an exit is such a small percentage, and a successful exit is an even smaller percentage of proper exits in business. Most businesses just go out, go out of business, and that's something you have to be so mindful of because you know you're working with Mark, and the whole focus of this is to build a business, not for you guys to be to build a team of freelancers or a team of contractors that are working for you, it's to build a business that can fund your lifestyle, that can create financial freedom for yourselves, and that can run without you. Because if I asked you around the room now, I can guarantee you there's maybe one or two of you can go away on holiday without picking up the phone for two weeks. No? Yeah, yeah. And that that's a that's a problem. That is a problem, but the fact that we're chatting about that, that can be overcome. And in 2015 was the pivot point in our business. But we we had a really good business from 2009 to 2015. We just went like that. And from 2015, it just went like that. Um, because we focused on maturing the business, and that's a big thing that I would talk about. It's like, okay, hard work got you to this point, that's not going to get you to the next phase. Um, you need to put the systems in, the processes in, you need to have a plan, which so that's when we're talking about working on the business rather than in the business.

SPEAKER_01: 7:27

So being busy rather than you know, and you're planning for what you're doing. So, yeah. So talk, yeah, just about that. So talk about setting up. You said about setting up for scale and systems and processes. So, what does the business, what does that business look like setting up the scale? Like, what does that involve? What is what is what is within that business?

SPEAKER_00: 7:42

So all the shit that you deal with every single day, right? You know the problems in your business straight away. Everyone in here is smart, everyone in here is a grafter, everyone else will put in the work, but at some point the work will only get you to here, and you need to have the team around you that will deliver the work when you're not there. The team around you, I like here. I'm respectful, the staff are your team, but in reality, they're leverage. The only job that they fulfill in your business is to make you more money, and that's the truth. However, you know, if you step back and go, well, we have to bring them along in our journey, we have to keep them, you have to dangle the carrot and keep them on the pipe for as long as you can to make sure you get as much value out of them. But by the same respect, you want somebody to work with you for the long time and see the benefit of working with you. Um, but if as from an entrepreneur's perspective, they're there to make me money, and you know, so what do you have to do? You have to put processes in place. You know, somebody was saying there, it's not it's not hard to get business, it's not, but what do you do with that? Leave when it comes in. Well, does it go into your CRM or does it just go into your WhatsApp? Does it go into your invoice or your coting system? Does that job get or that process get followed up properly? And do you follow up in six months' time when they said no it's not right now, not for me right now? No, because you're too busy. But as Mark says, and I I say the same thing, you're leaving money behind because six months from now you've forgotten about that because a hundred other things have come into your head. But if you had a proper system, a proper processor, well then you could follow up on that and you can add more value to it. And I know I heard somebody saying about brand and website earlier on, they need to get their website updated. You know, all I look at this is we we focused on being, sorry, when we started, we were a print company, people didn't know us for branding. We had a really good studio, and in 2015 we changed and we matured our business, we positioned ourselves as the branding agency. We focused on becoming the best, the most well known, getting the right type of projects. And I can I tell this a lot, but my first logo sold for 150 quid. And when I sold the business, we were selling 20 grand brands, 20 grand websites every single week. So that was the difference. Now, obviously, they weren't the same project. Uh we elevated our position in the marketplace. We showed our working out, we did our case studies, we did our it wasn't videos back then, but it was animations, and we were then positioned that every time somebody came to us, well, we just put the price up. Like that was a fucking secret in our whole process. We showed our working out, price is this. Showed our working out, price was this. Until such time that somebody said, Nope, can't do that, nope, can't do that, too dear for us. And then you you have the choice then to bring that price down. And so you're working smarter for your money, you're not working as hard for your money, and you're getting the right type of customer, which is, you know, who I can guarantee you now that you've all got that customer who goes, Ah, I didn't want to pay that. Will you do it for X? Or will you take the price down? Or how can we cut the costs? But if you had customers coming to you with the right budget, with the right spec, and not dealing, all you have to do was do the work and not deal with the shit around it, you'd be very, very happy.

SPEAKER_01: 10:35

Yeah, so that's exactly what we obviously we touched on in say the programme about the couple of things you touched on there. So positioning yourself and showing how you're different than your competitors. So what makes you stand out, what makes you better than others, what makes you, you know, you that KPI, like Dan touched on. People are he's known in the industry now for being a certain thing. So it's positioning yourself that way and then you're marketing, focusing on not just joinery and this thing, it's being bespoke at this. What are you specialists in, what makes you different and better from other people? And then what we what we said there about the prices, that's where you're talking about like the high value client versus the low-value client. And that's what we we obviously talk about in here. Not every client's a good client, not every job's a good job, and it's about like that the right clients will pay the right money that exists and obviously, Dan, you know that well too.

SPEAKER_00: 11:17

Like, so I'm a greedy fucker, being completely honest. I want all the business, and I would took on all the business, even the bad clients, even the ones that you'd risk on, and you de-risk them as much as possible. You take the money up front, you tell them the process, they're still fucking trans circumvented all the time. But if you want that business, you can still take it. But does an opportunity cost, does it take you away from the higher value clients? Yes. If you don't have the systems, it takes you further away, and you have to put those processes in place. And back in 2015, that's what we did. We went, okay, it can't, we were running about our office with these yellow sheets, yellow pieces of paper with all our job dockets on it. And we were running about a thousand projects a month at that time. And literally, they were going up three floors. We we bought a building on the Lisbon Road, um, and literally we're going up three floors, down three floors of these sheets. We're getting lost, they were getting missed. Everything you can imagine, right? It literally just was this. We were a print company and they were just fucking everywhere. And you know, you're running around on a Friday afternoon scrambling, they put this pile of sheets together so you can invoice them. You can imagine that. And then what we did is we put systems in place. We put in a CRM, we put in a project management system.

SPEAKER_01: 12:19

So, what is a CRM for anybody who doesn't know what a CRM is?

SPEAKER_00: 12:21

So it's a customer relationship management tool. It's uh you can have it on an app. So the big ones are HubSpot, but they're very, very intricate. Um, there's one called AtHe, which is like a just a really basic um CRM. And what you need to do in that is you need to record your any lead that comes in, customer details, company details, and the deal. What does that look like? And if you only do those things after this chat, you're miles ahead of your competition. Because all you're doing is taking that out of your head, putting it into a system, that becomes your second brain, and all you have to do is dip into that. You know, your non-negotiable time is 30 minutes in the morning, dip into your CRM and go, who do you need to follow up with?

SPEAKER_01: 12:56

Because there's a good point there that a lot of people fall down on. We talk about social media and likes and clicks and whatever else. Like that's all well and good. But what of those likes and clicks and follows and shares are actually uh you know, turning into seals? So that's where the CRM and things that got tracking though. So anybody who's doing your social media, anybody who's doing your marketing, should be tracking that for you. Not just not just video and you and whatever else. That it's about how you're converting those, those, that that traffic. That's what's fatal there.

SPEAKER_00: 13:23

You have to turn the unknown into known and social media, the algorithm could change in the morning, you get no views, you get no inquiries. Now, I know some of you, I I see all the guys in the trades that are doing it in TikTok, and I see their numbers, and I'm going, fuck, that's mad, but they're getting such virality of their content. I don't get that. Like my content is boring as fuck. But the people who come through and go, okay, uh, I like what you said, it resonated with me, I need your help. Yeah, and that's what you want, you know, and you'll get that en masse if you do it right. Um, but then what I do is I bring that into my CRM because you have to turn those people from just people on the internet into potential leads, and then you have to follow up in those leads and you have to have a process for following up those leads. Like our business, um, and I know these numbers are going to sound small in comparison to some of the numbers that you guys deal with, but our business, every single first of every month, we started at zero. We were doing 220k a month, every single month from zero every month. So our sales process was nailed. Now we were selling time primarily, so that was an hourly rate. And today I would do retainer business, and I know that doesn't work in your game, but you have to figure out your sales process and how that works for you so that you can maximize the return on your time. Because no point just doing all this and just sitting steady, like we all want more money, and this is how you make more money, it's being better at your sales, being better at your customer service. Like one thing that we did, which changed our business entirely, was we set times and timelines for the amount of time that it would take for a response. So, how many guys in here like get a message and go, fuck, I'll deal with that later? Don't answer it, or you forget about it because a hundred hour things have come your direction. It's normal, like I get that. But when you whenever you've set a process, okay, whenever somebody calls in, they get a response within an hour. I know you're going, nah, it's too well. All you have to do is ring them, go, I got your response, or I got your email, and I'm gonna reply to you in 24 hours. That's all you have to say. You've bought yourself time, you might need to go inspect the job, you might need to get prices and all the rest. You've given yourself enough time to do that, and it could be 48 hours, but as long as that customer knows and has that expectation, then they're just like, okay, well, they they've said what they're gonna do, they've done what they're gonna, they've done that on the other side. I trust when I see that quote that that's gonna be right then, or you have more chance of being trusted. Um and all you want to do is be more trusted than the person beside you, and at the right price, and be the right person at the right price at the right time. And I guarantee you, like in every trade that we work with, and every trade that I see is most people don't even do that. It's a just follow-up when they're ready. Um, but again, we're we want more money, we want more business, we want the right business. How do you get it? You do your process.

SPEAKER_01: 15:55

So talk about talk about then leading through the business. So obviously, you said you started you started the scale, so did you always know what you needed to do like from the beginning that in in the back room in your house to get to the exit? Was that you said that was always the plan?

SPEAKER_00: 16:07

It was always a plan. The business was set up for sale.

SPEAKER_01: 16:09

Like what lessons did you or what things or challenges did you have throughout that process that got you to that in achievement in nine years?

SPEAKER_00: 16:16

The business was set up for sale. So I always knew that I wanted to exit the business. And even if you look at my clients, they're all like, oh, I didn't think you'd sell. I thought you'd pass that down during the through the generations. We we were just working our trip off, and I actually posted about this the other day. Um, it was about 2014, and I was fucking busted. I'd gone, you know, when you've got the one of those days, somebody said it, I had one of those days, I was like, fuck this, and you want to rip the roof off. Clients were being dicks, staff were being dicked, you know, is everything just at the one time, and it got on top of you because when you you have to deal with yourself, and I was like, nah, this is done, and this is done. And I was chatting to my brother, so my brother became into the business about six months after I started, um, and he's still there today after exit. Um, but what happened was I said to him, I need to figure this out. We need we need to figure this out, and I was strategy, he was more sales, we're we're both aligned in our journey, um, but we're very different in terms of our skill set. And I then took a month out of the business to go and travel. I went to Malaga for the month, and I spent that entire month working full time, like completely full-time working from Malaga working on the business. We set our processes, we set our plans at a fucking it was a two-pager docket like, or it wasn't it was nothing really, and everything else went like this here on the plan, but the plan was always there, and it was a five-year plan, five years for exit. And if you look back at it today, and I don't have a copy of it because you haven't everything over on exit, but I know exactly what it said. And from here to here was pretty much dead on. But as I said, the journey just went like that the whole way around because you know all that shit that went on in business, you teams, you false start when you hire two people and you think they're gonna be brilliant and they just flatline your business, they work against you rather than for you. Um, so the then, whenever we got to 2020 and we had our management in place, we put three managers in, we put a general manager in place. Our business was running itself to the point where yes, they were wheeling me out for the big pitches. You know, I was there to support them, but I was really, really um particular with my time. Yes, everybody comes back. It's uh, you know, that mummy daddy conversation, they don't like what answer you give, so they'll go to the other person. Well, that happened with RGM, and it just even though they were coming to me and I knew the answer, you have to be so strict and go speak to speak to them. It's their problem, it's their they have to deal with this. And then they were sending you a message going, What do you say? But that's fine because they have to learn to do that and have to stand and run two feet for it. But when you do that, you're you have a business, you have something that somebody will pick up and be able to buy. Because the biggest risk that you have as owner operators is that they won't buy you, they're not buying you, and the minute you come out of the business, there's no business.

SPEAKER_01: 18:46

So that that's that's something very important. So there's two things there you mentioned, and one of them is what I always say to the guys here is boundaries. So having boundaries in place, like whenever someone you're putting that hierarchy in place and a manager in place, and then somebody below them is trying to go through, it's like you know, it's it's diverting them back to where they're supposed to be going. And again, it's but obviously communication is a big part of that, so they need to be that needs to be communicated to the team who what the hierarchy is, who's in place, why they're there, and what their rules and responsibilities are. So that was the the boundary side of things. Um, and the last point you touched on there, um just remind me what it was again. The last one's when anyway, the boundaries in place, and you touched on something else. Can't remember what it was.

SPEAKER_00: 19:23

Go back to the boundaries, yeah. Um, whenever you have those people in place, you're gonna have resistance, right? So anything that you have in your business now and you make change, they all just go just like fuck, I don't like this, I'm away, right? It's you've you've seen it yourself, like, and you will lose good people because of it. Because the people again, it's the same thing, the people who got you to here, you're a startup, you're scrappy, your mates, you're having pints in the office, you're doing things you shouldn't be doing, because it's just scrappy business, it's just getting to that point. But then when you become a proper business, which we had to mature, it's like all the things that got you here, all the people that got you here, don't necessarily want the change and don't see the reason why you're changing. And so when you bring in that new hierarchy and that new team, things will, you know, it's a period of plateau for a little bit. Exactly. Oh, here we and we had all the problems, you know. We had staff, I don't like her now, or Conor, I still want to speak to you. And yes, you still will speak to me. I'm always in the business, but by some respect, this person has a role to give me more time to do the things that I need to do. And I know there was somebody saying about having a non-negotiable time, that's 30 minutes or an hour in the morning to do the tasks. Like, how many of you guys get to do that every single day or once a week? Very few. And I can tell you that I used to get up at three in the morning. Now it wasn't because it was healthy or anything like that, it was fucking stress of getting the projects out the door, and that was every single morning. I was up before three o'clock every morning, completely stressed out of my head out of my head, um, getting the work done, getting to the gym by six to try and de-stress a wee bit and into the office for seven. And that was just to keep the wheels turning. And the people who come in after that didn't see all the work that you've had to do to get the business to this new level. And even today, our business, or it's not my business anymore, but the business that I owned is doing just as good as I did without me being there. But it's because of all the processes, exactly. Um, and obviously there's new management in there, and there's a new leader and the new owner, so they're pushing it on, and I'm delighted to see that because that's always what you want.

SPEAKER_01: 21:16

Um so that that was the point you touched on then. It was it was because sometimes the guys would say, you know, in construction, especially that them as the business owner, that's that's who the client wants. The client wants me on the site, the client wants me, and I've looked, I've been dragged into that several times myself, but it's like having that boundary in place as well. But the difference between what you think your client wants and what your client actually wants is two different things. So the client wants a result, and then the same as the investor wants the business, they don't want the business owner because obviously in this there's some sort of deal or whatever else, but like you said, there would your would that business would Kaisen Print has been as attractive if you were still the main cog on the wheel?

SPEAKER_00: 21:53

Nope, no, you'd and you'd got a fraction of the price, yeah, because they would have seen that. Um, and obviously, yes, there's always relationships, you've got those historic clients, 2017, and they stopped giving a mobile out to clients because there was a company there that deal with it, like there was nothing, and even when you're handing over clients, it was always like, right, this is Glenda, and Glenda's gonna look after your account. But if there's any problems, you ring me. There was never any problems because Glenda was great. Glenda's the manager in there now, and she is running the show and from a sales perspective, and she's brilliant. And it just yes, you'll you're gonna kiss a load of frogs on your journey to find the right people in your team. Um, but you will find them and they will put those processes in place. But yes, like on the other side, the the value then of the business is determined by the business being able to function without you primarily, a big part of that, because like even if you think about the the clients that you have today that only want to deal with you, what percentage of the revenue do they bring in? If it's significant, you know, that's a problem. You have to de-risk your business, and you should be de-risking your business anyway, like in our business. And I know it's again slightly different industries, but same principle, same principle. We had five percent maximum revenue any one client would have contributed to our business, and that was safe. Like that's like that's a gold medal position. But I work with clients today where some of their businesses that they work with are contributing 50% of their revenue, but they're at real risk, and so the first thing that I'm doing is looking down, going, right, let's spread those wings out, let's devalue that client. Yes, there's still gonna be an anchor tenant to the business, but they don't have to be the anchor tenant. Um, and it's to look at all those things. So, you know, if you do fuck all else after this, is go back and take a get a coffee and have a glass of wine or a beer of the night and go, what would a buyer say to me? What are the problems they're gonna spot in my business? And that's your first action points, right? Is it is it me? Is it my skill set? Who do I have to put in place to replace me? What is it gonna cost? And I know we're gonna talk about the cost and the value of your business and the EBITDA figure and stuff like that. Does every does anybody know what EBIT is? Neither do I, but it's worth it. It's it's how they measure the value of your business. And basically, it's the profit after taxes, and then they take your salary out, and then they add the salary in to replace you. And that's the that's a real basic version of it. But if you think about that, you know, how much is it going to cost to replace you? Millions. Oh, yeah, exactly. Like how many jobs do you do in your business? You do accounts primarily, you do sales, you're on the tools. You know, if you think about trying to replace you in your business today, there's maybe three or four jobs, maybe more. And if you were to put a figure on each of those rules that you would have to replace, and you look at the profit after that, fuck.

SPEAKER_01: 24:30

Talk about then so just the the the quickly, the not quickly, but go the process. Obviously, it was a long process of when you were first approached. Did you go out seeking? Did somebody come to you? Like how how did you get into that position that somebody decided to put their hand up and want to buy your business?

SPEAKER_00: 24:43

Great question. So we in 2015 we went around all the MA firms and built our websites. So all the mergers and acquisition firms we went around, and we were in this circle. So they are the investors. They're the people who either the investors go to or that they're investing in businesses as well. So we were like, okay, if we want to be in the circle of influence of people who are buying and selling businesses, we need to go and be in that circle. So we went and we built websites for uh the company that actually ended up brokering the deal, um, their financial team, and another two or three other massive money men in Belfast or money agencies, let's say, in Belfast. So we got this name in that circle pretty quickly, so that whenever the company eventually came and said, We're looking to buy a digital agency, we were the only ones that they knew. We were the first people that they approached, and we were approached a year before by another company, again, through that same that same broker, let's say, um, and that didn't go anywhere really. Again, it was a good idea, a good opportunity, good learning for us, didn't go anywhere, and you will find that as well. You're gonna see all of these opportunities come your way when you're positioned like that, but some of them are not right for you, some of them will just get to the very the goal line. Like, as I told you, we were sitting in the the solicitors on the 16th of March and nobody turned up, and that's heartbreaking. Like you're you're ready there, you've all already the money spent. Um, and literally well, not no, not quite, not quite. Um, but you in your head, it's ah there's a Ferrari. Um, but you don't you have to wait till the money sales out of sale until the money's in the bank. Yeah, um don't care what you haven't got in your hand, yep. Exactly. Um, but then what happened was when we were approached, you go through this, it's like a beauty parade. So it is where the the curtail wee bit and they tell you all the big fingers and all the rest, and then they do the sums out, and then you have a wee bit of an arm wrestle, and then they go open the books and literally it's just show your knickers and everything. Um there's not a thing in your business that they will not look at because they have to. Like, even you know, we we dealt with printing ink and they wanted to see the far safety um considerations for each of the inks that we held in stock. They wanted to know every piece of stock that we held, they wanted to know the salaries of every one of our team. They looked at our zero accounts almost daily, I felt like, because they wanted to know the health of our business. And again, it would they look at everything, but why would they not? Because they want to know that your business is secure. You will be interviewed by their accountant, you will be interviewed by them because they want to know your true expectations of this, they want to know why you were up for sale in the first place. Um, but in our business, actually, when we were just to give others out of this, when we were working with other brands, they were positioning themselves for sale and they set up their brand in the colours of the companies that they wanted to buy them. They were almost earmarking themselves to the companies, and it's always good to know who might buy you and to know be on their radar and have conversations. You know, you're not up for sale. If anybody asks you if you're up for sale, no, but we'll have a conversation. So you don't ever want to seem that you're too keen ever because then, and you always want to sell from a position of strength. So we were so fortunate. Um, like we did really well. We were one of those success stories in COVID because we worked, like I remember setting my pallet of wine um in the house. It was fucking funny. That's not even a lie. My dad works at a drink company, so it came on a pallet. But my carryout, um, I sent my bottle of wine one night, and uh going, what do you do? You know, we all sat in March of 2020, going, What is next? And uh we decided that night that we were gonna do COVID distance, social distancing materials, and our business changed literally overnight into this powerhouse over. I think we all wanted to do yellow at the time. Yeah, we won the education, education authority contracts, the hospital contracts, trans line contracts. We won all because we were first the market. We like literally a bottle of wine, have to it was a dear bottle of wine, but it paid for itself over and over. And because of that, our business was so secure. Um, and we did very well because of it.

SPEAKER_01: 28:27

But yeah, and what what what was able so another wee point there is like I know we're labor on the same point, but if your business wasn't in that position, so that didn't happen by luck by chance, you were strategic in that when when COVID came and those things happened. That that's important. Obviously, you had to have the headspace, be in that position to be able to work on the business and think strategically. Yeah, but if you were still in that early days involved in the wage, would you be able to think that way and have that headspace? Do you think?

SPEAKER_00: 28:50

I don't know. I don't think so. Yeah, I don't think so. I don't think I'd have been mentally the right person for that because we would have just been scrapping for whatever came through the door.

SPEAKER_01: 28:57

Yeah. So just just go through the process of like how long, so how long did it take from from being approached by the investor? Was it plain sailing? Like, you know, what what sort of what was the stages? How did that? I know you talked about going through the accounts, but what was this how long was the process?

SPEAKER_00: 29:11

So August 2019 through to November 2020.

SPEAKER_01: 29:15

Okay.

SPEAKER_00: 29:16

So about a year. But I've heard of deals going through in weeks. Really? So I have. Um, and I think you know, we it should have been about six months, but COVID's running for good measure.

SPEAKER_01: 29:24

And was it the first stop was it like the first investor that came that the bought in the end, or how many?

SPEAKER_00: 29:28

It was yeah, so the person who met us originally was the MD of the company. Okay. Um and he had the authority to approach us and he had the board's backing to approach us. Um, but then what you do is you meet the board and you go through and you have conversations with them as well. It really depends on who's going to buy you, you know, and who you think's gonna buy your business. Um, you know, if some of you have ideas of like a multi billion pound company buying you, or a multi million pound, or that there's a merger or acquisition, it could be very informal. And what I would say is that you know, the devil is in the detail with all of this. If it's not crystal clear to you what you're going to get, what your expectations are and what their expectations are, then there's it's it's not for you.

SPEAKER_01: 30:10

So how do how do you know then? How do you know what your business is worth? How would anybody here know or figure that out?

SPEAKER_00: 30:16

So the term is EBITDA. That's the the figure that you have to figure out. And that really is the profit of your business after the the take your salary out and to put the salary in to replace you. And that'll give you a figure, right? And for some people that'll look low because you know you're going to have to replace yourself and that's why you have to build a business around you to make that number more attractive you to make it more profitable. And then what they do is they'll give you a multiple and the multiple of that number is your final figure primarily. So that final figure, you know some agencies and sorry some some businesses will get a a one for one multiple so the profit's what they get and others will get 10 or 12 as a multiple and that goes oh it's squeaky bum time you're like oh that sounds good. And everything that Mark will tell you and everything that I tell my clients is you have to build the value in your business to increase that multiple. So in our business I can't tell you the multiple that we got but it wasn't either side of that let's say um what we got was because we had intellectual property we had our own CRM built for ourselves we had recurring clients that we had multi-year contracts and tenders in our business or we had our team who were able to run the business without us and everything like if you have a you know a half million point um IBITA and it's a multiple of two, you're going to get a million quid. If you have a multiple of five it's two and a half million. So that multiple while it could only be a quarter of a percent difference is very important and everything you need to do from you know the moment you decide that you're going to build the business is focus on that multiple and focus on that value.

SPEAKER_01: 31:43

Is there an industry standard for any specific industry what that EBIT multiple would be like for construction would it be three to five or is it is it completely variant or maybe you don't maybe not sure I don't know what it is in construction but I know like in tech firms it can be eight to twelve you know because they have SaaS they've recurring business and all the rest.

SPEAKER_00: 32:00

So um I would imagine that it would be on the lower scale for construction unless you have tendered work or if you have recurring business. And your job is to figure that out.

SPEAKER_01: 32:09

Yep. Yep.

SPEAKER_00: 32:10

I I know um if you're if you have your accountants they will be more tuned to what the multiples will be in your industry. And I know that our accountant was very you know very forthcoming with that information and saying that it was a good multiple or it was a bad multiple or what we should be asking for from their experience.

unknown: 32:26

Yeah.

SPEAKER_00: 32:27

Actually the best thing you can do in all of this is get a good accountant because they're the ones that are going to be fighting your corner from a finance perspective. Yeah. And they're the ones that are going to be looking at your books. And I don't know if you do management accounts at this stage of your businesses but when you get to a certain level when you're planning for exit you'll want to do management accounts just so that your books are completely clear across the board. And it's not that I not that I mean clear that anybody can lift them up and go, here's the health of your business here's the forecast for the next six months here's what that's going to mean from terms of recruitment retention and profitability and your own cash flow because if they can see growth and an opportunity for growth and if they can see stability in your business that's what they want. They have to be sure like if you imagine somebody's going to pay you many many many pounds they want to know that that money's going to come back to them at some point and we have to be so mindful of that and you have to be respectful like sure you did the team yourself.

SPEAKER_01: 33:18

That's what they're buying yeah so so the finances was that was their first protocol for what they looked at in the business and then operations came second and so they obviously look at the figure look at the look at the finances and then they dig deep into the operations of how it all works. So it's fair to say that if the finances were in place but the operations weren't there would be no deal.

SPEAKER_00: 33:35

Oh 100% like it's all one and the same for them like they look at your tenders they look at your contracts they look at absolutely every piece of paperwork in your business to understand where the risk is and the only thing that their side's looking at their solicitor and their accountant are looking at the risk. They are the entrepreneurs on the other side are looking at the opportunity. So they're there going yeah to fucking do it do it do it and then it's the solicitor going no let's look at this and that's again exactly the same you do it yourself. You have to be so respectful of that and we were and it was always a good conversation you know we all sat around the table at the very start and said look if this doesn't work out meet you and all the rest um but we're going to try and make it work and it was the same for them too and ultimately it worked for all of us.

SPEAKER_01: 34:13

Yeah. In terms of um the money side of things so the aspect of you know having your saying having your account and all right obviously a a challenge and most people in construction as well I find is that you know the finances and the tax side of things it's always you know the accountants always like trying to you know trying to pay as little as possible etc etc with taxes and things like that but in order to make your business look attractive do you have to have a different approach then?

SPEAKER_00: 34:38

Yes and that's a great point. So the if you're they're only looking at your figures and if you've reduced your profit like they will account for pensions by the way so pensions and all the rest that's all just assumed as normal but if you've you know spent money to spend money say for money spending sake um you've less profit you're gonna have a less profit on the books and if you do that for a couple of years so yes you have to repair your accounts for this process as well and be a bit more lean on the spending for a bit if that's what it takes but again you can't reduce the quality of your service you know and that's be mindful of that as well. Yeah yes preparation in your accounts is is key as well.

SPEAKER_01: 35:15

So it's important then obviously when you're having that approach to have the the sort of vision the North Star in place of the reason why we're doing this is because of this and it'll pay off later down the line.

SPEAKER_00: 35:23

100% there's no cash jobs in those years. You know those are the things um in particular that especially in in many trades not you you know I'm not saying anybody does that but you know in many trades that would be a consideration that you know everything goes through the books in those years to show true profitability.

SPEAKER_01: 35:40

Okay and if you were if you were to do it all again given like the whole nine year stint would you would you do it again? 100% work harder.

SPEAKER_00: 35:47

Yeah yeah 100% like I I I say that to everybody is like I did work my tripe off for many years and yes I had all the problems that everybody has with working with a team and and building a business over many years. Do it again in heartbreak. So as I said like I'm on the other side of this now and I only work with the people that I want to work with and I only do the bits and pieces that I want to do I travel a ton and do the things and it is worth it. Like I I live a very quiet life but it's a life that I want to live so it is and that's you know people the biggest problem that I will tell you is on the other side of it is you have to retire to something you have to move on to something and I find that I'm really good at making money and really good at business and I like that still so I do that enjoy it.

SPEAKER_01: 36:28

Yeah okay and what was what would you say the biggest through the whole thing what was would if you could pick one lesson that's a big overarching question was a long time the biggest lesson or the biggest thing you took away from that whole process what do you think it would be just the end on that yeah hard work.

SPEAKER_00: 36:44

No you guys all see this yourselves um like the generation coming behind us the people coming behind us don't have the same work ethic and that's that's the truth and like I think that's fucking great because it puts us in a better position. There's a slight sense of entitlement and that's not to devalue I respect the fact that they want work life balance but work-life balance for me comes after you've achieved what you want to achieve and do what you want to do um and I I'm very respectful of that doesn't work for other people but that works for me.

SPEAKER_01: 37:14

Excellent anybody got any questions for Connor? Anything else you want to add for this morning no no um no I'm I'm gonna