The Next Step Pete Seligman

G'day, I'm Pete Seligman. There are a growing number of people thinking about buying a business in this region, but it can be hard to see what that actually looks like. So to help bring one part of that process to life, I've teamed up with my mates Jason Andrew and James Frank to throw some businesses on the table and share our raw thoughts on each. This is Eta down under. We hope you enjoy it.

 

In the latest segment of "ETA Down Under," we embark on an exploration of a thriving excavation business, initially captivated by its impressive presentation and robust 10 million dollars in revenue. Specializing in critical water and sewer infrastructure, stormwater solutions, and holding Sydney Water accreditation, the business stands as a preferred partner for top-tier corporations.

As financial considerations unfold, red flags are raised regarding EBITDA usage, specifically in light of a million-dollar fleet of equipment impacting perceived profitability. James Frank introduces the concept of sustainable future earnings, prompting a nuanced discussion on owner involvement, team engagement, and the intricacies of transitioning to a new operator.

Leaders in Civil Excavation

Revenue $10m
EBITDA $2m

Link: https://resolve.com.au/business/transportation-infrastructure/leaders-in-civil-excavation

Located in Sydney, the company is the preferred partner for numerous top-tier corporations, renowned for their expertise in critical water and sewer infrastructure, stormwater solutions, pumping stations, precision bore and inspection pits, and a comprehensive suite of Civil Excavation Services.

With varying levels of interest among us, ranging from cautious optimism to tentative inquiry, the fate of the excavation business hangs in the balance!

 

Thanks for listening. I hope you enjoyed it. If you want to learn more, please hit us up on LinkedIn. You can find all three of our profiles in the show notes below and stay tuned for the next episode.

Follow Pete on YouTube: http://www.youtube.com/@PeteSeligman 

Connect with Pete: https://www.linkedin.com/in/peteseligman/ 

Connect with James: https://www.linkedin.com/in/james-frank-905b2155/ 

Connect with Jason: https://www.linkedin.com/in/jason-andrew/ 

G'day, I'm Pete Seligman. There are a growing number of people thinking about buying a business in this region, but it can be hard to see what that actually looks like. So to help bring one part of that process to life, I've teamed up with my mates Jason Andrew and James Frank to throw some businesses on the table and share our raw thoughts on each. This is Eta down under. We hope you enjoy it.

In the latest "Eta Down Under" segment, we delved into the potential acquisition of a high-end beauty business in Queensland. Despite its 4.2 million dollars in revenue and 900 thousand dollars in earnings, we expressed skepticism about scalability and raised concerns about the discretionary nature of the industry, cyclicality, and potential revenue decline.

We discussed challenges in creative businesses, particularly jewelry, scrutinizing intellectual property protection, scalability, and the potential for navigating larger corporate customers.

Premium candle, body-products, & gifts business 

Brisbane-based
Inhouse manufacturing of biggest selling product, import suite of other products
sells to large network of retails (B2B) and D2C through online channels
EBITDA: $0.9m
Part-time owner, skilled team in place
2,800+ B2B clients including several contracted customers 
Link to enquire: https://resolve.com.au/business/wholesale-trade/highend-home-body-and-gift-business

Manufacturer and wholesaler of high-end homewares, jewellery, and giftware products marketed under company-owned brands, which are positioned at the premium end of the market. The business has a strong network of suppliers for its whole range, including its contract-manufactured jewellery range. Perfect bolt-on acquisition for trade buyers looking to enter or expand in the gift, e-commerce, homewares, or bath & body product sectors.

The verdict on whether we decided to embrace or pass on this intriguing venture? Well, you'll have to tune in to the next episode of "Eta Down Under" to find out!

 

Thanks for listening. I hope you enjoyed it. If you want to learn more, please hit us up on LinkedIn. You can find all three of our profiles in the show notes below and stay tuned. For the next episode.

Follow Pete on YouTube: http://www.youtube.com/@PeteSeligman 

Connect with Pete: https://www.linkedin.com/in/peteseligman/ 

Connect with James: https://www.linkedin.com/in/james-frank-905b2155/ 

Connect with Jason: https://www.linkedin.com/in/jason-andrew/ 

G'day, I'm Pete Seligman. There are a growing number of people thinking about buying a business in this region, but it can be hard to see what that actually looks like. So to help bring one part of that process to life, I've teamed up with my mates Jason Andrew and James Frank to throw some businesses on the table and share our raw thoughts on each. This is 'Eta Down Under'. We hope you enjoy it!

 

In our inaugural episode, Jason introduces a diverse range of businesses, from a vertically integrated pallets venture to a high-end home and gift business. We delve into opportunities, exploring a 4-million-dollar rental solutions business and a 7-million-dollar engineering gem in southeast Queensland.

The spotlight turns to the pallets business, dissecting its manufacturing dynamics, selling strategies, and the challenges of the rental model. Jason's insights spark a spirited conversation on potential innovations, regional significance, pricing strategies, and operational intricacies.

Pallet Manufacturer


Regional NSW (within 2 hrs of Sydney):
Pallet Manufacturer
EBITDA: $1.7-1.9m
Under Mgt
Link to enquire: https://resolve.com.au/business/manufacturing/vertically-integrated-pallet-business

Pallet manufacturing business with "mill on wheels" and commercial agreement for wood supply. Competitively advantaged with supply of wood (very valuable after bushfires has restricted competitors ability to supply their clients). The owner has invested heavily and this business is growing on the back of blue chip clients, both of which are growing.  A trailer-mill allows the business to cut wood to size, reducing offcuts and stock wastage. Production/General manager runs the daily operations with non-exec owner living interstate. 

This episode lays the foundation for an exciting season, promising deeper insights into the world of business acquisitions down under.

 

Thanks for listening. I hope you enjoyed it. If you want to learn more, please hit us up on LinkedIn. You can find all three of our profiles below and stay tuned. For the next episode.

Subscribe to Pete's YouTube Channel: http://www.youtube.com/@PeteSeligman

Connect with Pete: https://www.linkedin.com/in/peteseligman/

Connect with James: https://www.linkedin.com/in/james-frank-905b2155/

Connect with Jason: https://www.linkedin.com/in/jason-andrew/

 

This episode of The Next Step – the final episode for the season – is a short bookend to wrap up the series, and we’ve included it in the interest of completeness. These are closing remarks after a wonderful and insightful EtA Forum. 

As I mentioned, for the first effort at something of this scale for the EtA community, the turnout was truly incredible. Many more people came than was expected, and consequently, thanks to that support, not only was the atmosphere at the event as dynamic as it was, but the event was able to donate profits to several charities across Sydney.

The success of the event means that it will be back this year, so be sure to attend if you can! As you’ll hear here, not only is it an excellent event for sharing information, but you’ll enjoy plenty of networking opportunities at an after-party that will go late into the night. 

It is our great privilege to be part of the local search community in Australia, and help connect and inform what will be a major path to entrepreneurship in the years ahead. Thanks for listening to this season of the podcast, and we look forward to being back with Season 5 soon.

 

Register for the 2023 EtA Forum: https://www.peteseligman.com.au/etaforum

 

Connect with Pete: https://www.linkedin.com/in/peteseligman/



What we discussed:

1:20 Pete begins his concluding remarks from the EtA Forum 2022.

2:04 Thanks to the sponsors and partners of the event.

3:58 Thanks to the support of the forum we were able to donate to several local charities.

The final session of the inaugural EtA Forum was a hugely entertaining and insightful story about the searcher’s journey. Richard Hernan decided, at the age of 40, that it was “now or never” to follow his dream to become an entrepreneur and business owner. At the time he had 12 months’ worth of financial reserves, which he assumed would be ample to find and acquire a business. 

Three years later he found himself in Centrelink for benefits, and still trying to finalise a deal. It was at that critical moment that it came together for him and the search was finally successful. 

This is a story of discipline, confidence and belief, and really highlights the kind of resolve and determination that searchers sometimes need. The payoff, of course, is well worth it, as they can then follow through with their entrepreneurial ambitions. However, it is a process that requires a particular profile of a person to see it through to success. 

Richard also shares his thoughts on the “four seasons” philosophy towards search, one that I love myself. It starts in Spring, when the entire process is exciting and the search is underway. Then it moves to Summer, when the acquisition is hot and the business growth and opportunity is dynamic. Then comes Autumn, which is the time for the searcher to start to ease back on their role within the business, before finishing with the exit in Winter. This “four seasons” approach is an excellent way to look at the journey of a searcher, and Richard’s own story is the perfect example of it. 

For anyone looking to get into search, this is a must-listen presentation because it will help you to prepare for your own journey.

 

Connect with Richard Hernan - https://www.linkedin.com/in/richard-hernan-a655267b/?originalSubdomain=au

 

What we discussed:

2:26 Richard starts his presentation and introduces the “four seasons of search” concept.

5:25 Richard shares his backstory: how he got involved in Search and why he took that path.

10:52 The importance of self-awareness when starting the search journey.

12:37 Getting the search started – where searchers can start learning what they need to know.

17:07 The psychology of search – what can searchers do to help keep themselves grounded and positive?

20:27 Richard shares a story about the challenges he had getting a deal finalised even after it had been accepted by all parties.

22:40 Going from solo search to partner search, and the difference that made to the search effort.

23:50 Richard shares the story of when his financial reserves had just about run dry and he needed to seek assistance from Centrelink.

28:22 Having now acquired the company, what should your first priorities be?

29:20 The good and the bad – Richard highlights some of the most memorable experiences on both extremes from his search journey.

32:34 Richard shares an update on where Broadleaf stands now and its ongoing growth.

35:37 Richard finishes with closing thoughts – “was it worth it?”

 

Key quotes:


“I had a moment where I was sitting across the table having lunch with the CEO of the world's biggest or second biggest mining company. And I found myself thinking “I don't want to be you.” But then, when I reached out to entrepreneurs I realised that that's who I want to be – an entrepreneur who's in control of what they do.”
“At the start, in the Spring, what you want to do is leave your eyes open and your ears open, and really try and learn as much as you possibly can.”
“To quote Otto von Bismarck, “any fool can learn from experience, but the trick is to learn from other people's experience.” So what I tried to do, even before I jumped out of the corporate world, and then certainly after I jumped out of that was to say, “who's done this before? I'm not trying to do anything that hasn't been done before.” So I went and met with the three or four people in Perth, who had previously acquired a handful of businesses.

 

In this session of the inaugural EtA Forum, people from all ends of the search spectrum came together to discuss a vital, if sometimes prickly topic: how to structure the perfect deal, especially when the seller isn’t as experienced.

Often in search, the business owner is not an experienced business seller, and this can have implications in many ways. For example, they might be unaware of the critical information that the searcher will want to see in a due diligence process. Or, they may have unknowingly surrounded themselves with poor-quality advice, which can end up undermining the entire deal.

A searcher’s first job, after identifying a business that they like the look of, is trying to encourage the seller to have the best quality support and advice around them as possible. From there it will become more straightforward to negotiate and gain access to the information that they need to come to a conclusion.

 Another major point that was brought up by the panel was the need to be flexible. Through any due diligence process, there is going to be information that comes to light that is unexpected. The experienced searcher, however, approaches this with the mindset that these are hurdles, not roadblocks. There is a solution in the deal and negotiation which means that neither party needs to walk away when the unexpected is found during due diligence.

For an awesome insight into the psychology of searchers and their relationship with sellers, this panel is a must-listen!

 

Connect with:

Michael Chew – Flywheel Effect https://www.linkedin.com/in/michael-chew-3028b61 

Brent Goldman – Nexia Australia https://www.linkedin.com/in/brentgoldmanadviser/ 

Nima Sedaghat – HWL Ebsworth https://www.linkedin.com/in/nimasedaghat

Pete Seligman - https://www.linkedin.com/in/peteseligman/

 

What We Discussed:

2:44 What’s driving the headline information as a deal is being structured?

4:42 Why it is important that the vendor is getting good advice for a deal.

6:35 What are the challenges that come from unsophisticated sellers, and how do you manage those deals?

9:01 What’s the mindset of the inexperienced seller? Are they just looking for a cash price, or how else might they approach a deal?

12:33 Why it’s valuable to communicate how the deal will practically work for a seller, and building education into the process.

14:29 Why being flexible during the due diligence process is so critical.

16:34 For buyers, how does the due diligence process influence the structure of a deal?

20:40 Q & A with the audience.

26:31 Pete provides a summary and analysis of the panel’s key findings.

 

Quotes:

 Michael Chew: “Something that I think is common with a lot of the deals of the size that that we have is that there are relationships and other things held in with the person how you mitigate that risk.

Pete Seligman: “You've got to know how the vendor on the other side of the deal is being advised and how capable the advice is. The better the advice that the vendor is being given, the better the process is going to be. You might go in there thinking “oh, they've got crap advice, and this is going to make it really easy for me to walk all over them.” But actually, it just makes it really, really hard to structure a deal.”

Brent Goldman: “A business that doesn’t have the right financial information doesn't actually mean that it’s badly run – it may well be making money and surviving comfortably. So I would see that as an opportunity to put in some processes and systems and really drive growth.”

Nima Sedaghat: (10:59): “As a buyer, it's a worthwhile exercise to ask your advisors “what does this deal structure that we're proposing look like for the seller?” If they're expecting just to take all the cash off the table, from day one, it's important to be able to articulate why that works for them, whether that’s because they’re managing the tax timing, or if it's likely that they