Episode Transcript
[00:00:08] Speaker A: Hey, everyone. Welcome back to another episode of the Lifestyle accountant show. I'm joined by producer Eleanor. Welcome, Elle.
[00:00:15] Speaker B: Hey, Meryl.
[00:00:16] Speaker A: What's happening in your life this week? Well, I'm actually talking to you from my new office. Oh, really?
[00:00:23] Speaker B: How was the move?
[00:00:25] Speaker C: Move?
[00:00:26] Speaker A: It's great. I had previously been in an office for about five years in Burley, and I was pretty happy there, but they needed the space back. I was subleasing, and the last three months I've been trying to find somewhere. I was in a temporary space, not really settled. I was in an industrial estate.
Nothing, nowhere to eat at lunchtime, nowhere nice to walk.
Just really not ideal. I felt like it was a lifestyle downgrade, actually. Just moved to tweed heads is actually right near the Kulangata border. So lots of cafes, restaurants, a great surf break just five minutes away, a beautiful boat harbor where you can go and eat lunch. And already I'm bumping into people that I know. I went to a gym class last night and ran into an accountant that I've known for years.
Got a lunch meeting set up next week with some friends. And when I was in the industrial estate, I was really kind of missing that. I felt quite isolated.
[00:01:28] Speaker B: Yeah, it's a different vibe, isn't it, when you're sort of in the. Because you're in more of the city center now, I guess, where there's like actual, real, live humans that live. There are real live humans in industrial estates as well, obviously. But, yeah, it's a very different feeling, isn't it? So you were on a lifestyle downgrade. Do you feel like now you have truly upgraded?
[00:01:49] Speaker A: Well, potentially an upgrade. I was pretty happy with where I was previously, but there's definitely more happening around here. So there's more restaurants, more cafes. There's a beautiful yoga studio a couple of doors down. There's a few gyms nearby.
[00:02:03] Speaker B: I don't know if you're going to get any work done, actually. Maybe it's too nice.
[00:02:11] Speaker C: Well, that's good.
[00:02:12] Speaker A: And I've got a friend in the same office space and we're trying to convince someone else to move in as well, so. Yeah, all in all, I think it's great. But you're right. Potentially less work getting done.
[00:02:22] Speaker B: Well, we'll come back, we'll do a little recap on that. Maybe six months down the track and we can track your inputs and outputs and see what's happened.
[00:02:31] Speaker A: It's funny, with the original temporary space, I never properly moved in. So you can see behind me, I've got my bookshelf set up. Got the podcast gear all set up. I've put some effort in to make it nice, whereas I think I always felt like the other space maybe was temporary. I never really set it up. You visited me there. I had stuff in boxes. I never really fully committed.
[00:02:57] Speaker B: Yeah, I know what you mean. Actually not a true place. And not that I'm massively into feng shui, but at your previous office, your door was right behind you, which I think really actually does kind of affect your energy a little bit. So I notice you now have no door behind you, which is quite nice.
[00:03:11] Speaker A: Yes. And a nice outlook into an atrium area.
[00:03:16] Speaker B: Well, I'm very pleased for you. That's very good. I have to have to come down and visit you in your new office soon.
And unbelievably, we've gotten to the last episode of this season.
[00:03:26] Speaker A: Yes, the last episode of season three. And we strategically publish this podcast in seasons so that it's possible to have a break.
The weekly publishing cadence can be tricky when there's other things going on, and the podcast is an important part of what I work on, but it's not the only thing I have going on. So hitting. I have a lot of respect for those that publish 52 episodes a year, publish every week. I'm actually looking forward to a little break of the publishing schedule. I still will be interviewing guests, but we're going to take a pause for a couple of months with publishing, and we'll be back again soon because, yeah, it really is.
[00:04:11] Speaker B: I think the word treadmill is the perfect thing because once you're on it, you are just up and racing, and it's very hard. For a little while now, we've been really trying to get a bit ahead and bank some episodes, but I guess with the podcast, there are so many moving parts as well that it can just be hard. You've got to have every single one of your ducks in a row, and if one of the ducks falls out of line for whatever reason.
So, yeah, we're still working on lots and lots of exciting stuff in the background, interviewing people, and we're also looking for some more guests, aren't we?
[00:04:44] Speaker A: We are. And so some of the popular episodes have been around mergers and acquisition. So I'm still interested in stories from any accountant who's been on either the buy or the sell side and is willing to share the details. You don't have to share every metric, but to walk through the story and what went well and what didn't and anything that's practical and applicable to other bookkeepers and accountants. But it doesn't have to be mergers and acquisitions. It's basically any story. So any challenge that you've faced in your business, whether it was with a sales process and you redefined it, moved to new software, improved it, or whether it was onboarding, or you added a new product, or you tried a different digital marketing strategy, or you moved into a niche, basically anything where you made a change. And I want to hear about that transition and get into the nitty gritty of what worked and what didn't. Because I think it's those kind of stories, those practical stories that are relevant and that can help other firm owners.
[00:05:42] Speaker C: Yeah.
[00:05:42] Speaker B: So if that's you. So look, don't be shy. Feel free to nominate yourself, but also feel free to nominate somebody else if you think that they'd be a really good guest. And the best way to get in touch with us is send an email through to show at Lifestyleaccountant Co. And we will go through those and start working on or continuing the interviews that we're already doing in the background.
[00:06:06] Speaker A: The podcast will definitely be back by the 1 July, which is the first day of the financial year in Australia. Maybe not so relevant a date for our US listeners. So we'll definitely be back by then. Make sure that you subscribe or follow the podcast in your podcast app so that you can see when the next show is released. And also follow the lifestyle accountant show on LinkedIn, which is lifestyle accountant so that you can get notified when the new episode drops. I'm aiming for before the 1 July, but it will definitely be back before then.
[00:06:39] Speaker B: You say you much prefer to.
[00:06:44] Speaker C: Get.
[00:06:44] Speaker B: It the wrong way around. Over promise and under deliver, that's the wrong way around.
Now I can't get it right.
You all know what I mean.
[00:06:54] Speaker A: Under promise, over deliver. I never want to set a date that I'm not going to hit, so that should be well in advance.
[00:07:03] Speaker B: And so who is our lucky last guest of season three?
[00:07:08] Speaker A: This latest episode, we have a lovely lady called Lee Cummings on the show, and she's sharing her story about selling her bookkeeping firm. She had been running it for almost 20 years, described it as her baby, almost building it, growing it, nurturing, caring about it. And so it can be an emotional journey for people selling their business when they put so much time and energy into it, and they have long term relationships with their client and their team. So it's interesting hearing Lee's perspective about getting in the right headspace to sell. And that took her some time to go from thinking that it might be a nice idea to sell, which she actually had thought of or thought about for a number of years, to being willing to or get close to signing a contract.
And I thought it was quite insightful, Lee talking about she didn't know whether she had a business that was worthy of sale. And so getting that validation from a broker who said, yes, this business is valuable. There will be buyers interested in this. That was something that was unexpected, but a confidence boost as part of that process. So Lee walks us through her sales process from that initial idea of, okay, maybe it's time to sell. Working with a broker, looking at offers from some different acquirers, working through the deal process, and then also the transition and some challenges, as well as some wins with that process.
[00:08:44] Speaker C: Fantastic.
[00:08:45] Speaker B: Here's that conversation with you and Lee now.
[00:08:52] Speaker D: And now a word from our sponsors. This podcast is brought to you by team up, helping you to recruit top Filipino accountants without the ongoing monthly fees. They can source accountants with experience working at US or australian firms who are familiar with tools like Xero, QBO and Dext. They can also recruit specialist roles like bookkeeping team leaders who have leadership experience.
[00:09:16] Speaker A: And australian tax specialists.
[00:09:18] Speaker D: I recently came on board as an.
[00:09:20] Speaker A: Investor and advisor to Teamup and I.
[00:09:22] Speaker D: Love their ethical approach to the offshoring industry where they look after both the accounting firm and the Filipino accountants. Make sure to check out the team up newsletter for more content on building top tier accounting teams in the Philippines. That's at hireteamup.com. Hireteamup.com.
[00:09:45] Speaker A: It's been a while. I think it's been quite a few years since I've seen you.
[00:09:50] Speaker C: The last time was on the dance floor at Zerocon, so that was exciting. That was such a great time.
[00:09:57] Speaker A: I love mean, I did go to Quickbooks Connect. I felt like a bit of a trader going to Quickbooks connect. But Zerocon, it's still got a place in my heart. Still my favorite.
[00:10:07] Speaker C: Yeah. I haven't gone to any of the other softwares because I do feel like I'm being a trader, but you see so many of the old staff moving on to the other software, so it's like, well, if they do, shouldn't feel so bad.
[00:10:20] Speaker A: Yeah, exactly. So you've got a really interesting story around selling your firm a couple of years ago, but we actually have a bit of history. We were in a mastermind group together many years ago and so I've seen your evolution of building this business and now I'm super curious about hearing that transition and sale journey.
Why don't we start with a little bit of background?
Where was the business at and when you started thinking about selling? So a little bit about what were the services, what did the team look like? And then what was that moment where you thought, I might be curious about.
[00:11:01] Speaker C: Exploring selling well, being in a mastermind and places that help you grow your business, you start talking about different goals and things like that. I'm not a very big picture visionary person. For myself, I like doing that with my clients. But for myself I normally speak more in the moment or working out the next twelve months kind of things in goals. But one time I actually sat down and done like a five year plan and I put down there that my goal was going to be to have a sellable business in five years time. So my daughter was young in primary school then and that way it would be as she was hitting high school, but it always kind of did just feel like a dream and not necessarily a goal to reach.
So that five year part did change. The five year goal lengthened and went further than what I wanted, as always happens. Yeah, but it always stuck in the back of my mind. So it was always something that I was working on. So it was probably a long time ago that I actually had the thought about selling and whether it was something that could be sold.
[00:12:12] Speaker A: And so what changed? Or what was the moment when you thought, I'm going to do something about this? And went from goal to action in terms of maybe reaching out to some potential buyers or a broker or something like that?
[00:12:28] Speaker C: I started seeing some risks in my business. I didn't necessarily want to be the one doing all the work. I had an employee that was my main person doing lots of the work. But each time I tried to bring on new staff, there was always challenges and stuff involved. So I felt that if I continued on that path and something happened and someone left, I'd be back down doing the work again. And that sort of scared me.
I started putting processes and stuff in place for different jobs and so that other people can do the work so that I was setting it up for the next stage. It wasn't until I sat down with another professional colleague that I know and started talking about what I want from in the future. And that's when that goal sort of came up again. And she's like, why don't you just sit down and have a conversation with the broker and see what they have to say?
Yeah, you're right. Okay, I'll commit to you that I will do that. And organize that meeting, and that's what I did.
[00:13:29] Speaker A: Amazing. And so what was the business like at this point?
I know you come from a bookkeeping background, but I think you call it something different to bookkeeping. So what kind of services were you offering? What kind of clients were you working with?
[00:13:45] Speaker C: Yeah, no, it was definitely a traditional bookkeeping business, but it was traditional in regards to that. Doing the books was important, but I always wanted to change and evolve the business, and that's where the mastermind and stuff that you and I were in, it's always about evolving and changing evolution of your business, so it's never standing still. So bringing in software and technical tools, automation, those kind of things to make it more of a modern firm. And then when I was speaking to my clients, we started talking about different solutions or what problems they had in their business. So I would actually speak to them about solutions and then go off and research and find solutions and look at implementing some of that sort of stuff in it. I found that that was something that I really enjoyed.
[00:14:37] Speaker A: So you had one key team member at this time that you were reaching out to the broker?
[00:14:44] Speaker C: We were actually a team of four, but with a main full time bookkeeper, a part timer, myself, and sort of a reception data entry type of person as well. So we're a team of four? Yeah.
[00:15:00] Speaker A: All right. And how did that first conversation with the broker go?
[00:15:05] Speaker C: Basically, I sat down and sort of said what I've just told you and letting know my background of what I was looking at. And I had my zero file there open, and we went through the figures and he came up and gave me a valuation. And that valuation was far more than what I ever expected because I always downplayed the value of my business. I always thought there was a value in the business because I started it from day one, from scratch, from home in my bedroom while the kids were little. I was working part time, and then I grew it into something. I had an office, I had staff, I had procedures, I had marketing material. So I'm like, there has to be something here. It has to be an asset. But I just needed someone to talk to to be able to give me that validation, I suppose. So sitting in that meeting and them looking at my fears and giving me evaluation, I'm like, yeah, right, cool. He also gave me that acknowledgment that, yes, it was a sellable asset. Yes, this is something. And I've got people on my books looking for something like this. So it gave me that reassurance as well.
[00:16:16] Speaker A: And so I know this is a couple of years ago now, but you don't have to say what your valuation was, but how was the broker explaining it? Was it a multiple of revenue? Was it something different?
[00:16:29] Speaker C: There was two different ways to do it.
There was a revenue multiplier and another way.
Both ways, he calculated it came up around about the same figure, and then it decided to go just under that valuation slightly. So it was in a range.
[00:16:50] Speaker A: Because I think typically in the bookkeeping and accounting industry, we think of a one times annual revenue, as a rule of thumb, multiple. And then sometimes it can be a little bit lower than that, especially if it's on the bookkeeping more than the tax side. Sometimes it can be a little bit higher if it's a firm that's in an industry niche or there's something special or different about it.
[00:17:13] Speaker C: It was one thing that I really didn't question. He gave me the figure and I just accepted it. I didn't even go, no, I want more than that, or, oh, I didn't think so. That's too much. He just gave me the figure and I just accepted it, and we just went with it.
[00:17:30] Speaker A: And I like your point that it gives validation, because I think many as business owners, many of us data ourselves, and so having that validation from someone, a third party outside looking in, saying, hey, we think this business has value and that people will be interested in buying it, I think that is a useful exercise that many business owners might not appreciate when they're in the weeds in the day to day.
[00:17:57] Speaker C: Yeah, for sure.
[00:17:59] Speaker A: So you had that initial chat with the broker, and then did it take you long to decide to move forward and go, yes, I want to actually put this out to market? Or did that take some reflection? Were there any challenges in moving from an initial inquiry to, all right, let's do this.
[00:18:18] Speaker C: There's a lot of tools now where you can list your business online and go from there. But for me, if I didn't have a broker, I wouldn't have done it. I needed that validation. I needed that support along the way.
Again, I needed that validation to understand that there was a value in this business. So having the broker and telling me that I pretty much signed up straight away, it was scary. Totally scary, because it was always a goal, more a dream, really. Didn't think it was really a reality, but I did pretty much sign up on the spot.
And then once we got the marketing done, which did actually take a little bit of time, once it went up and was listed, the inquiries started flowing on in.
[00:19:07] Speaker A: And so what's the marketing piece? What does that look like when you're selling a business or preparing a business for sale?
[00:19:13] Speaker C: It was a big questionnaire basically on understanding what your business is, what it looks like, how many staff and things you've got, what type of clients and stuff you have, those types of information that a buyer would want to see is what the information that they needed so that they could put it up as a listing. That's all I had involvement in. The rest of it was all done by the broker and that's why I really enjoyed going through a broker, because it was all done in the background and I didn't really have to do anything about it. Yeah.
[00:19:48] Speaker A: And so when was the next phase they got involved? I imagine so the broker has gone up to you, filled out that questionnaire, it's been listed, then acquirers are starting to sniff around and get interested. And so did the broker vet some of them or how many acquirers or offers did he put in front of you or he or she? Was that the next step? They took care of a lot in the background.
[00:20:14] Speaker C: Yeah. But I had to click a button so that they could send out the private information to the buyer, like the confidentiality agreement. So they were coming in fairly thick and fast into my email inbox and I was actually quite surprised at how many I'm clicking this button for. So I do believe that there was quite a lot of inquiries, whether they went much further. I'm not sure whether what conversations and stuff that the broker had with them, that's the part I left up to them. But it was like, it was a freak out moment, actually. It went listed just before Christmas and I was in Port Macquarie with my friend over Christmas break when the first one came in. And I'm like, holy moly, this is actually real. What's going on? I can't believe this is actually happening. And I got about three or four in that between Christmas and new year break. I couldn't believe it.
[00:21:10] Speaker A: Yeah, that's awesome. So roughly how many of those initial inquiries or I suppose they're not really expressions of interest, they're requests for information. Would you?
[00:21:21] Speaker C: Yeah, that's right. Yeah. So the actual first one that I hit the button for and sent the thing was, was the actual buyer that bought it.
At the end of the day, I had two offers on the table, two actual quality buyers that were vetted and ready to buy.
And then I had to basically work out which offer I wanted to take and the price was the same from both but the offers were really different.
[00:21:53] Speaker A: Oh, that sounds interesting. Can you compare and contrast them? What were the main differences?
[00:21:58] Speaker C: Yeah, well, the first part is when I was going through the process, it was kind of trying to think about what type of buyer I wanted. What did I want for my baby? Like, this was a business that I'd grown for 19 years. Did I want this business to be absorbed into an accounting firm or another bookkeeping business and be gone forever? Or did I want it to be like my baby that I've grown up and let out into the world to carry on as the same name going forward? So I thought I really needed to have an understanding of what I wanted in that and then decide from there. So I did kind of want it to continue on, was where I sort of wanted to go. And the people who ended up buying it was a husband and wife team from Sydney who wanted to move to Newcastle and grow the business and keep the business going. So that was one of the offers. The other offer was an accounting firm in Sydney who wanted to absorb the book to grow their accounting firm. And they were also thinking that they may keep my bookkeeping business as the name that it was and keep that as a subsidiary arm.
Now, the complicated part about their offer, even though they were more experienced and had stuff going on, they wanted me still involved in it. They wanted me to stay around for two years to be involved in the business. Understanding what the involvement was was a bit difficult, but I really didn't want to be tied to it for two years, especially when I was ready, I wanted to go out.
So they were the offers kind of went to the broker and there was lots of arguments backwards and forwards, me and the broker, lots of conversations and he's going toing and froing of the offers, asking if there's any more. And he's like, or what more about that offer. Anyway, in the end I did end up taking the husband and wife offer because that way I wasn't tied to the business and staying around. And it did mean that my baby was able to continue on.
[00:24:10] Speaker A: That's really interesting.
I think that's something for both other potential sellers to think about. Well, a lot of the parts of the deal are negotiable, so which bits are really important to you and which bits are you okay to compromise on? And it sounded like not having to continue on working for a couple of years was really important and also wanting to see that business that you'd built continue on. I've got a couple of extra questions about the offers that they put in. So it sounds like it was a similar price. Was it similar in terms of how were they both planning to do the timing of cash?
Was it 100% cash up front? Was it spread out over installments?
Was it similar from both of them?
[00:24:56] Speaker C: Well, the interesting thing with the one that I didn't take was that there was potential for me to earn more money with me staying into the business and it was whether I should be continuing that. So they were exactly the same upfront offer, same, but then it was the complexities and stuff around the offer, so about staying in and they were going to give me more commission and things over those two year time.
So is it more about the money or is it getting out early?
The offer that I took was going to have a twelve month retention period in there and that's how it was negotiated at the time. We got the lawyers involved. My lawyer wrote the contract and put it out to them, but they didn't like that.
They didn't like some of the things that clauses and stuff that we wrote in the contract to protect me, because having a retention clause is really difficult. Like, once you're gone, you've got no control over who stays, how they run the business, how they complete things, whether they're meeting deadlines and things like that. That's always really a scary part. And it's also very hard to grow your team sometimes because that's always responsible on you. A lot of times being the bass agent, you're the one ticking the final box. So it's really hard to have a retention clause in there and knowing what's going on. So they read it, they didn't like it, they wanted to change it. They ended up reducing the retention period down to two months. And after two months, if they hit the income target that I was getting per month, then they would pay me the final amount.
[00:26:43] Speaker A: Well, that sounds like that reduces some of the complexity about arguing, well, whose fault is it if the client leaves? Is it you as the original owner, not doing a transition properly, or is it the new owners that haven't looked after the client? So that sounds like a positive thing to reduce the time period. I mean, that's a pretty quick handover period. I've got limited experience with this, but that sounds quite fast. So were you happy with that result, with the redrafting of the retention clause?
[00:27:13] Speaker C: There was a lot of backwards and forwards in communication and it really didn't go very smoothly. Everything we kind of put forward they rebutted and things like that. So at the end of the day, when they came back to the two months, it was like, yes, then I'm out, I'm done, I'm gone.
It's less risk on me for them having to get the income targets that are needed because I was pretty confident that they could easily get those income targets in those months and then I'd be gone. The other part of it is that I was to stay in the business for two days a week for those two months.
And that's definitely something you should think about because that was actually a really difficult time to play in that. So I got the majority of the money and then two months of retention by staying two days a week.
[00:28:08] Speaker A: Why was that a difficult time, the two days a week, that transition period?
[00:28:13] Speaker C: So in the beginning it was okay because I was going through showing them bits and pieces and stuff on the different clients and showing them the owner that took over still had a full time job elsewhere. And she also had a small book of her own clients as well. So she was very tied up into her other parts of her life, of how she was getting income in dedicated. So she wasn't really dedicating too much to my clients. And I was like, what's going on? This has to be done. Have you done that? They're like, well, you need to give us this client. And so there was a lot of backwards and forwards there. It was a husband and wife team that would sit and kind of whisper and know what's going on and leave me out of a lot of the communication. So a lot of times it was very awkward turning up for the day and trying to be in an environment where they really didn't want me there and I didn't want to be there.
[00:29:08] Speaker A: It does sound a bit od if you say they didn't want you there, but that's a prime time when they could be learning about all of these clients and all of that knowledge that you've built up. So that sounds a little surprising that they weren't taking advantage of that. But I can imagine if you're all sitting in the one office together, that would have been awkward and not very motivating having to turn up in those circumstances.
[00:29:32] Speaker C: Yeah, a lot of times they didn't give me anything to do as well. So I'm not going to work on the client's work because it wasn't what I was there for, it was just helping the transition. But the period was for too long. You can get over, especially if you've already done the work in getting procedures and documentation and stuff in place. You can do that in basically two weeks and sit down and go through things, or you can have a support thing where they can call you at any time afterwards if they need to know more about that customer.
Yeah. So the way it was, sort of sat down with me coming two days a week and having to be there all day when they gave me nothing to do, when they were already focused on other things, it was a really difficult time.
[00:30:17] Speaker A: That's an interesting point, that if everything's well organized and procedures are already documented, then you don't need as long a handover period.
Did your staff go to the new firm as well, or were you having to train their new team members?
[00:30:33] Speaker C: No, they wanted my staff and the staff to go with them. Yes.
[00:30:39] Speaker A: And how did you broach that conversation with your team? At what point did you tell them so?
[00:30:45] Speaker C: I did have a very good relationship with that main employee, the full time person. She'd been with me, I think it was eight years. So we were more friends, like, very close friends. So when I first listed the business, I didn't tell her, but it was very early in the process that I did. I probably told her even before I got any offers.
She was a potential buyer as well. So by telling her, then she had options to have a look into it and see if she wanted to buy it.
But she didn't want to start up her own business, and she was happy to carry on and wasn't ready to go anywhere else, so she stayed. One of the other teams was actually her daughter, so she stayed as well. So, yeah, it wasn't a big transition for the staff.
It's definitely something to think about.
But at the end of the day, when I only had the two months, it really wasn't my problem. As long as I got them over the line, and then it's up to the way they treat the staff.
[00:31:50] Speaker A: That's an interesting point, that your existing staff might be buyers, and so if you don't involve them until late in the process, once a deal is already signed, then you haven't given them that opportunity. But I've also heard stories. If you tell key staff too early, then sometimes it can ruin a deal. And there's an episode with an interview with Brandon Poe, who's a broker who tells a story about that. So I think it probably is different for each firm and the relationships that you have. But I do like that idea of thinking about, well, is there anyone internal that could be an option to buy? And there may or may not be.
[00:32:28] Speaker C: Yeah, I really do think it is a case by case basis based on relationships they've got by reading people and seeing what they're like, what their ambitions are going forward and, yeah, conversation to have or not have.
[00:32:42] Speaker A: And did you have a colleague or a friend that you were able to talk about these offers with as you were trying to, I imagine, particularly trying to decide between those two offers, how were you navigating that? Was it with the broker that you were having those main conversations or how we. Or were we writing it down? Pros and cons, like, how are we actually thinking it through and figuring that out?
[00:33:07] Speaker C: Yeah, a lot of conversations with the broker backwards and forwards on those. But also, as I said, my main employee was like a best friend to me at that time. So I actually did speak to her around the offers and that, that I had, she helped me through that, but I was also sitting down with my family and just speaking about it out loud.
Once you sort of start talking about the details, you're like, oh, that didn't quite fit right.
Speaking at the dinner table with the family, it's like, do you really want to be around there for two years? And it's like, no, I don't. So it's just like speaking about the deal and what you're comfortable about speaking to about the closest people around you and you're the one that's got to make a decision about it, what's right for you. No one else can make that decision. And that's one of the real bad things that I had my business for so long and having a key person so close to me, I relinquished a lot of the decisions that I would make. I would always ask them, the staff, about the decisions and most of the time went on their way rather than my way. So something I really needed to stand on my own 2ft and do that. And now in my new business where it is just me working, I've been forced to come back to make those decision making. So it's been really good for me. Yeah.
[00:34:32] Speaker A: And I have some questions about your new business in a moment. I've got a couple more wrap up questions on the deal process. So you worked with a broker and then you also mentioned a lawyer. I'd be interested in any lessons you had from working with the broker, with the lawyer. And if there were any other consultants involved in the process as well.
[00:34:55] Speaker C: There was no other consultants. It was just the broker and the lawyer and the lawyer that I chose. I caught up with her with coffee meetings, through networking events before. So I really didn't know her work.
When I spoke to her about it, she was more than happy to take on the case, although she was extremely busy at the time. So getting the contracts and stuff from her took a little bit of time.
And the fee structure ended up being an hourly rate, which, if you can, I'd try and get a fixed price contract because the cost blew out. And it's not necessarily the lawyer's fault. It was the communication from the party that purchased the business. There was a lot of communication breakdown. They wanted stuff from me that they used my emails basically to get the information from and locked me out of my emails. I would send emails to them. They had stopped communicating with me. So the only option I had was to communicate through the lawyer to their lawyers, which obviously increased the cost.
So, yeah, that was a very difficult time. So it is always good to have those professionals on your side.
And as I said, she wrote the contract to protect me. And especially with that retention clause, we wanted reports and bits and pieces to see how they're going so that I could protect my money. So it's really important to get that contract written in your benefit, protect your.
[00:36:30] Speaker A: Assets before we move into what it's like for you. Post sale, are there any other lessons that you think would be relevant for bookkeepers or accountants from your sales process?
[00:36:45] Speaker C: Just get your house in order, start putting processes and things in place.
Be ready to change and evolve. Don't just write those and chuck them in the bottom of the drawer and leave them forever. Get in. Work out what is important to you, what your values are, what your mission is, what you're striving for, so that there is a real clear indication of what your vision is, of what you're needing to do. So if anyone is interested in continuing on, they can resonate with what you're saying and go, yeah, that's me, I want to continue that. That's where I want to take it. You've got a really great business model. I want to be a part of that. If it works out that someone wants to absorb it, then that's up to them because they've got their own agenda.
But you've done your work to get it in the best possible position you can for it to be carried on or continue being a great asset for somebody new.
[00:37:50] Speaker A: All right, well, let's move into our post sale phase. So you did the two months and then what happened? But then what did you do?
[00:37:59] Speaker C: It was so hard after being a business owner for 19 years, to be stripped back to just Lee Cummings. I've always had a business Persona as such a business name. So to be stripped of that was extremely difficult.
I didn't know what I wanted to do next. I know that I didn't want to necessarily jump into a job tomorrow or a new business tomorrow, but at the same time, it was so confronting, not being somebody else. So I really started thinking about what I really liked doing, because I needed to know what I wanted to do next. I didn't want to retire. I didn't want to be sitting at home being a housewife or going and just leisurely doing nothing. I need to be productive and helping people. So I really like working with small businesses, all different types of businesses, but I like businesses who have been going for, say, three to five years, who have got their feet wet and understand that business is highs and lows and what you've got to do. But they're at that stage where they need to go, that next step. They need some help getting that foundation groundwork in or to scale up and go to that next stage. So I realized that I wanted to continue that type of work.
I'm a big advocate of Xero and their ecosystem and the software systems and things that you can put in your business to make it run more efficiently, to increase your productivity there, your profits and your business just works a lot better. So I've taken that and I started up mint Dynamics, which is to help people get back to their roots, their foundations, work out what they're interested in, what their values and their mission and things are, and help them on that path to actually set that up.
And then the other real part of it is keeping people accountable for their numbers, setting up budgets and stuff like that. But then implementing that software for a smoother business, because you can do more with less staff, which is always hard to get as well. So, yeah, it's going well.
[00:40:16] Speaker A: I've got a couple of follow up questions. The first is, did you take any time off? I know that you wanted to get out and be productive. Was there a little gap there to go and relax?
[00:40:26] Speaker C: Yes. So the business name started straight away, and it was in 2021, so it was COVID times.
I didn't have to change my business structure at all, so I was able to qualify for some of the government money, and we're working from home. So it was little bits and little bits. I was helping another accountant out with some of the work that he was overwhelmed with some of the JobKeeper staff. So I just dabbled a little bit and just kind of went from there, I set up my website, started working out more about what I am, what my foundations are, and where I'm going. If I'm speaking it or telling people about it, I need to walk the walk. So it was about setting those kind of things up.
I wanted to kind of have the twelve months as an easy time, earning some money, doing a little bit of work, but just real easy.
[00:41:27] Speaker A: Yeah, I can relate a bit to the identity piece. So in the end of 2021, I stepped out as CEO of being injured and took a sabbatical to try and figure out what's next for me. I had health issues, unfortunately, so I didn't really get to have the full sabbatical. But I found it really uncomfortable. Of who am I now? I'm not the CEO anymore. I'm still the founder, but I started the business, but who am I? So I really can relate to that. And I think that's a challenge that is unexpected and would hit many people who have invested years in building a business. And then it's gone to have something else there, whether it's family or hobies, but having something else to put that energy into.
[00:42:10] Speaker C: Yeah, because everyone around you has got their own things to do too. They're all going to work or school or doing their hobies and things. It's like at the end of the day, everyone. So I'll see you later. And then you just turn your. Oh, what do I got to do? So, yeah, I wanted to get into something, but another thing on selling the business that I had before is that I found that I had no more career progression. The business was working well in what it was, but it wasn't now in a way, that I wanted to work. So it was always put to me as well as, why don't you add the things into that business so that you can continue on what you're doing and you don't have to start again. But there was always gray lines, and I would always talk to people about what they should be doing, but it wasn't a service necessarily, and it was hard to kind of introduce them when I had fixed price packaging. So I'm like, that was a baby that I started and going, and it's going, well, let's move that on. Then. I've got no ties and I can work out the way I want to work next time.
As I said, there was no career progression, whereas now I'm still in a business and still helping people, but I'm doing it a different way. So it's more exciting for me now.
[00:43:31] Speaker A: And was there anything in terms of negotiating the contract? Sometimes there can be non competes and restrictions on what you can and can't do post sale. So was that something that you considered in the drafting process? And then are there certain things you can't do in this business or was it just for a certain period of time?
[00:43:51] Speaker C: Yeah, it was a two year clause and 50 K's, I think, which these days 50 K's doesn't matter because we can work anywhere.
But it was on, I think it just had the wordings in as bookkeeping services.
So broadly, what does that mean? Like, skilled in so many different ways. So what does that actually mean? But I had no interest in doing that type of work. Again, didn't want to do that, so I wasn't worried. I'm like, you can put in however many years you want, I don't mind because I do not want to do it. But I found they were a bit threatened by and that's why the communication and stuff broke down a little bit. They think they didn't want me, any part of the business at all, into helping because they were threatened in some way. So yeah, there was a two year clause and it actually was a turning point in my current business. When that two years was up, it was strange. It was like a weight had been lifted and my income and the clients and that were coming to me actually really started ramping once that two years was up.
[00:45:07] Speaker A: And I think I saw on your website, it's more project based work now than the recurring fixed fee bookkeeping. So how are you finding the different business model?
[00:45:18] Speaker C: Well, I do like working on project basis now. The only thing is I'm not the best on sales and bringing in new leads. So it's something that I am working on because working this way, you've got to constantly bring in the new leads and helping new clients. But it was also one of the reasons of selling the old business.
Even though I owned the business and didn't do the crux of the stuff, I still wanted to turn up at 08:00 every day at the office because I was setting example of what I expected from my staff. I still had the deadlines. If my staff didn't meet those deadlines, that's on me. So I still had all that there and I had to step in when I needed to. There's payroll. There was a couple of things that I needed to do. So each week the payroll and stuff had to be done. The deadlines were there. So to get away for a holiday was always like oh, no. Logistics and trying to do it. This needs to be better. I need to be able to have a holiday. My family's having a holiday, so why can't I and go away and leave the computer behind? So I really did want the new business not to be ongoing in deadlines and really responsible of having to get stuff done. And that's why I like working on the project ways. It keeps me really interested too. Each time a new project comes in, it's like a new puppy. It's like getting, yes, I really want to fix this for you. And then you get it done and they see the results and they have that really good look on their face. You've seen the change in the business.
Some of them I can continue supporting and some of them are like, yeah, no, I just wanted you to do that. I'm all good now. I'll go off and do my own thing and come up back to you later. So there's no pressure on having to finish things. There is, because obviously they need to be done. But in ATO, deadlines and things and when people need to be paid, that pressure is kind of relieved. Yeah. Amazing.
[00:47:17] Speaker A: Well, Lee, I could see your face lining up when you were talking about the projects and solving those challenges and helping clients. So it looks like you've found a really good path for yourself post sale, which I'm really happy for you with that.
[00:47:32] Speaker C: Thank you.
[00:47:33] Speaker A: Well, thank you so much for coming on the podcast. It's been great hearing that journey and also being involved in part of it in the early days. So did you have any final comments that you wanted to add about bookkeeping or selling a business? And then if you could also share where the listeners can find you online if they wanted to get in touch or follow along with what you're doing.
[00:48:00] Speaker C: I suppose if you're looking or thinking about doing it, and it's something that you've started from scratch from your home computer or something, just know that it is something that you've built. You put hard work and effort into that.
It is sellable. So if you're looking at doing it and it is a goal, stick to it. Go for it, go after it. It's scary. It can be scary, but there is awesome life on the other side.
If you're feeling overwhelmed with what you've got at the moment and it's not what you're wanting to do, then go after what you want to do.
It's all you can do, really.
And I've got a sense of self back by as I said I relinquished and let other people make decisions for me. I don't like making decisions. I am a leader, but I just let that go because I want to please other people. So I've had to go back to stepping up and making decisions, and it's been really good for myself. So I really like that. I'm now working for great clients in the scale up sort of stage, looking at project management, tile of businesses who are really dedicated to growing their business, real entrepreneurial mindset. So that's really exciting.
Where you can find me? Well, I have a website called Mint Dynamics. I'm on LinkedIn.
I think there's a business page there, too. And my personal profile, I'm on Instagram and Facebook, and it's all under mint Dynamics. So if you look for that or my name, Lee Cummings, then you'll be able to find me amazing.
[00:49:47] Speaker A: We'll link all of that up in the show notes. Thanks again, Lee.
[00:49:50] Speaker C: Thanks, Meryl.
[00:49:55] Speaker A: There was a great conversation with Lee and really interesting hearing about her experience selling her bookkeeping firm. One of the questions I like to ask people who are selling is, at what point do you let your team members know? And she had an interesting perspective where her team members, and particularly one key team member, was a close friend or had become a close friend over the years. And so she confided in her early in the process, but it also gave her the opportunity to buy or express interest in buying if she was interested. It turned out that she wasn't. But I thought that was an important point, that if you've got team members, key team members, they may actually be interested in an acquisition, and it's worth mentioning that to them before you go down the sales path. But there's also risks of that. And if listeners have checked out the episode with Brandon Poe, who is a broker, then he shared a disaster story around letting Tim embers know too early. So I think it's a bit of a someone who tried to blow it.
[00:51:02] Speaker B: All up when they found out, right?
[00:51:04] Speaker A: Yes.
[00:51:05] Speaker C: Oh, man.
[00:51:06] Speaker B: And this is why we have this podcast, to tell these incredible stories, because there's just so many different ways it can go, aren't there?
[00:51:13] Speaker A: There are, and I think each situation is unique, but the more different stories that you've heard, then when you eventually get into that situation, you can draw from those experiences to try and figure out, well, what's the right thing to do in this situation. So it was awesome having Lee come on and share her story. And it was also interesting hearing about what she's working on now and she started a new business.
[00:51:37] Speaker C: Yeah.
[00:51:37] Speaker B: Fantastic. And I think since our last episode we've had some more reviews come in.
Do you want to read out the latest one?
[00:51:47] Speaker A: Yeah. So this one is from Morgie kG. Thank you for leaving a review and they say I really enjoy the lifestyle accountant podcast. Meryl is a great host and seems to always attract fabulous guests. Working as an accountant, now a firm owner, I find the information to be so insightful for each stage of my journey. I look forward to every new episode. It is a must listen for all accountants, bookkeepers and business owners. Thank you, Morghi for leaving that review.
[00:52:17] Speaker C: Fantastic.
[00:52:18] Speaker B: And if you'd like to leave us a review, it really does mean so much and helps us reach more people. Go to ratethispodcast.com lifestyleaccounted.
[00:52:28] Speaker A: I normally at this point say see you next week, but we're having a pause so I will just say see you again in the future, everyone.
[00:52:35] Speaker C: See you.
See you soon.
Yes, we will.
[00:52:39] Speaker B: We'll see you soon.
