Sam Penny (00:02)
Welcome to the built to sell built to buy podcast, the show that unpacks what it really takes to build a business that thrives, whether you're looking to sell, buy, or simply step back. I'm Sam Penny. And today we're digging into one of the most powerful shifts an owner can make. Becoming redundant in your own business so it can run without you.
My guest today is Nigel Hall. He's a serial entrepreneur. He's an investor, director at Bonza Business and Franchise Sales. And he's helped countless business owners step back, boost their business value and achieve successful exits. If you want to know how to build a business that doesn't depend on you, you're about to get the blueprint. Nigel Hall, welcome.
Nigel Hall (00:43)
Yes, I'm great to be here today and I look forward to discussing this topic with you.
Sam Penny (00:48)
Yes. Well, look, we've known each other for about 15 years, I'd say back when you were the entrepreneur in residence at the Innovation Centre at our local university, University of the Sunshine Coast. And your entrepreneurial journey went back way before then. Tell us, how did you get started as an entrepreneur?
Nigel Hall (01:06)
I guess it's always been something I've done just naturally. think I started my first business which was actually selling part worn car tires when I was 15 Because I've got three months study leave or two months study leave from school and I didn't really want to study So I thought I can make some money and my dad was a tire dealer and he had loads of secondhand tires around and I started really back then and Built that business up and eventually became my dad's whole business and then
Obviously after university, and I studied business because of that, I became an auditor, became an accountant, and one of my clients was a software startup out of the States, and they said, do you want to come and help us set up in Europe? And I did. And taken a path from there. So I'm not sure it was a conscious decision. It was just something that was natural, and I just got pulled along into.
Sam Penny (01:50)
do you feel that entrepreneurship is something that is through nature nurture? Is it something that you learn? What is it?
Nigel Hall (01:58)
think you've got to have the drive to do it yourself. You've also got to be a risk manager. A lot of people think entrepreneurship is about taking risks, which it is, but it's not about taking risks that you can't manage, deciding what risk you can manage, how you can manage it better than other people. And then using that as a find a way where you can create a market because you're prepared to manage risks that other people aren't prepared to take.
and deliver something to your clients by doing that that other people can't deliver.
Sam Penny (02:24)
Now, Nigel, you've had such a successful career as an entrepreneur. And today we're talking about making yourself redundant. Was there a moment in your entrepreneurial past where you realized that at that particular point in time, you were too essential in that business and the business totally revolved around you. And then you made that mindset shift of, need to remove myself from the day to day.
Nigel Hall (02:49)
I think I've always been able to remove myself relatively early. I mean, one thing I know is, if you're the smartest person in the room, you're probably still in the toilet. you need to surround yourself with smart people. And if you do that from day one, I think you get a better outcome. And by surrounding yourself with smart people, the business instantly becomes less dependent on you. To do that, you force yourself into a position where you're
generating enough revenue or enough cash flow so you can afford to employ those people. So initially while you're still small, that can be difficult, but that can also be solved by taking on partners on board. And I've quite often started a business along with a business partner because I don't want it to be just dependent on me or they didn't want to be dependent on them. Between two people or three, you've always got a bit more resilience. And I think that's one of the key things.
Sam Penny (03:37)
Yeah, so Nigel, how many businesses have you built and which one really stands out in terms of true owner independency?
Nigel Hall (03:48)
that's such a difficult one. mean, had...
Yeah, I'd say looking 94 started one called expedite and we grew that from being two people to being about 70 people in three and a half years. And we sold it at that point. And when we sold it, we stuck around for a year, but then we both left and the business continued running. In fact, two months after I'd sold it, I actually went and ran a business in a different country for that company that purchased us.
So that was already at the position where there was management structures in place where you could leave it. The next business was similar. sold that and then I left after nine months and the business continued. that was even faster growth right there. After two years, we'd gone from nothing to 120 people. But I'd put a team of people around me from as early as I could, professionals in their space. So basically as a manager, I believe, or a business owner, what you're there for.
is not to run the business, it's to make sure the people you put in positions have got the time and the resources to be able to do the job they need to do. And that's your job. Your job isn't to make every decision, it's to enable everybody else to be in a position to make decisions.
Sam Penny (04:54)
So to make yourself truly redundant as an owner doesn't necessarily mean removing yourself from the complete picture and going on a never ending holiday. You're still in there involved in the strategic movement of the organization. And I guess thinking about the smarts of what drives the business. So in your words,
What does it actually mean to make yourself redundant as an owner?
Nigel Hall (05:20)
I think the key thing is that you've got no day-to-day operational function that must be performed so that the business can perform. think taking yourself out to that day-to-day routine means that you're one removed from the day-to-day and that gives you the time to look at the strategy. It gives you time to implement new systems, new ideas, and to drive innovation with the business, which is equally important, but the business itself will run without you.
Will all the innovation, will all the advancement, new technology get implemented if you're not there? Probably not. So you've still got a role to play, it's just not an operational role.
Sam Penny (05:56)
So why do you think so many business owners resist it or even fear it?
Nigel Hall (06:01)
I think the big fear business owners have is letting go and trusting other people to do what they do. And I think that's partly sometimes because they don't have enough trust in their people. They haven't recruited people of an eye enough skill. And quite often people recruit other people who they feel confident in managing, who they feel aren't going to challenge them on any point. Whereas what you need as a business owner is to be challenged.
You need people to challenge your thoughts. You need them to put their own ideas out there. So you have got diversity because at the end of the day, none of us know everything and we all have to take input from everybody.
Sam Penny (06:37)
Yep, definitely. What's the very first thing that you always do in your approach to making yourself redundant from that day to day?
Nigel Hall (06:43)
As I said, the first thing I always try and do is when I start a business, start it with somebody else as a partner, because that just gives you that resilience. It gives you the ability to go on vacation. I like to go on vacation, spend some time doing other things. And I'd say after that, the next step is always to find somebody else who can look after the finances. Because if you can get someone who controls the finance of a company, they can generally
keep a good eye on what's going on in the whole company. If you've got a trusted finance person in your team, then you're very lucky because they can control everything that's going on in the business through the finance.
Sam Penny (07:17)
Yeah, I want to talk about the systems people and then letting go. You spoken a lot about people, so how do you find and keep keep people but also how can you genuinely trust them to run things without you?
Nigel Hall (07:32)
Well, I think that's the same answer to two questions. One is you've got to put them in a position where they've got the same motivations of you. And that's about remuneration. And how do you keep people? You pay them well and you give them incentive to stay and you give them the career opportunity. So one the things I always look at is that whoever we've got on board, we always try and map out for them where they could possibly go with the business. It doesn't mean they're always going to get there. They've got to perform to get there.
But if you give people something to strive for and pay them according to what they're returning for you and pay them probably a little bit more than market rates, maybe a lot more than market rate if they're delivering that for you. And my golden rule on that is, when you look at someone, they've got to deliver you three times what you pay them. And on the other hand, if someone's making you a million dollars a year, be prepared to pay them $300,000 a year. And then you'll get the best people and you'll retain them.
Sam Penny (08:22)
Yeah, 100%. Have you got any stories of success or failure in relation to delegating tasks?
Nigel Hall (08:29)
I'm just trying to think of one. Yeah, absolutely. mean, look at my current business. We appointed a GM who initially came on and took over and became the head broker and then he became the GM. And in the last year, he's grown the business by 30%. That's fantastic. And we've delegated, we've got out his way and he's grown the business 30 % this year. And I'm pretty sure he'll grow it again 30 % next year. And I can do that while I'm...
Sam Penny (08:43)
Wow.
Nigel Hall (08:53)
working three days a week and coming up with new innovation to help make the business easier to run.
Sam Penny (08:58)
It's absolutely fantastic. So let's talk about systems then. What are the role of systems, SOPs, all those kinds of things in allowing you to work three days a week?
Nigel Hall (09:07)
Well, I think the first thing is policies and procedures documenting everything you do and making everything you do into a process makes things much, much easier to duplicate. And it makes it much easier to be able to scale a business if you've got that. Key to scaling is always having a procedure that can be done by multiple people or different people. And then taking all the tasks in the business and breaking them down into parts where you can build different departments to do those tasks.
because that also enables you to be able to scale and gain efficiencies because if you've got one person trying to do everything, you've got a jack of all trades who's not a specialist. If you've got people who are specialists in four or five different departments and you've got the best people doing everything and that's when you start getting efficiencies and those efficiencies lead to you've been able to systemize and that in the end lead you to be able to work three days a week because everything's systemized and put somebody in place who's going to run that system for you.
Sam Penny (10:01)
So if we look at Bonza of business and franchise sales, you manage a huge amount of data. You've got a lot of businesses that are coming to you to be sold, a lot of buyers really interested in investing in businesses. How do you manage so much data? How much is tech driven? How much is run by just plain, simple checklists and SOPs?
Nigel Hall (10:24)
So in the interim, systems have come on that far that you can take what used to be checklists and SOPs and put them into platforms where workflows run themselves. So for example, with our system, we get a thousand buyers, 1,200 buyers every week. Most business brokers input that data manually into their system. There's not many business brokers get as many leads as Bonza
I doubt there's one that gets that many, but even if you're inputting 200 leads a week, that's 200 points of value you've got there. We've built a platform where our 1200 leads a week go into our system electronically and the piece of software just extracts the right information, puts it into the right place, and then automatically sends that person an email. It means we've eliminated all of that work from somebody re-inputting 1200 pieces of data a month.
which means there's not 1200 potential mistakes a month. And then the follow up to that is automated through workflows, which means everything gets done on time. And once those tasks are done, then if there's any manual tasks that need to be done, there's a task set within the system so that whoever's task it is gets a notification and we can track whether those tasks are being done on time or not to maintain our service level that we promise ourselves internally and to our clients that we'll get back to them in a timely manner.
Sam Penny (11:44)
so I think for a lot of the business owners out there who are listening to this, from what I'm hearing, the first step is, I guess, identify the task, understand all the steps that are involved in that, and then being able to delegate that to a person. But then also seeing if technology can take some of those steps or even all of those steps and automate. And if you can...
automate, like you said, you remove a lot of the human error from it. But also to automate so many steps these days with technology and the tools that are coming through is becoming so much easier for a business owner to implement.
Nigel Hall (12:19)
Absolutely. And I think the beauty of automation is it doesn't mean you can, you want to get rid of staff or you're going to move, reduce the number of stuff. What it means is you can focus your staff on things that are more important to the business. So rather than a business broker sitting there, re-inputting data, they can actually be having conversations with buyers and sellers. And as a result, they become more productive and they end up selling more businesses. So the end of
this automation for us internally, which increases our productivity, actually improves the result for our customers, which is what you have to think about as a business all the time. How can I best serve my customers? Because they're the ones who keep us in business.
Sam Penny (12:58)
Now, making yourself redundant from a business isn't all about working three days a week or going on extended holidays. There is quite a result to making yourself independent from the business. And that's how it relates to the valuation. Now, your unique position of being an entrepreneur, but also with Bonza business and franchise sales, how does that owner independent
business valuation compare to one that is owner dependent. Let's just say they're both doing half a million dollars a year. One's owner independent, one's owner dependent.
Nigel Hall (13:32)
What it does is it broadens your buy-a-pull. So if you're looking for an owner-operator, you're looking for someone who is skilled in that area, who understands the business, and who wants to work 40 or 50 or 60 hours a week to run that business. If you make it owner-independent, all of a sudden you can take people who haven't got that background, who may have a full-time job elsewhere, who want a business where they can give input maybe on a daily basis with phone calls or a weekly basis.
So you broaden it to investors as well. And that, because there's then more people looking at a business, it increases competition. And because it's under management, that broader buyer pool also generally people, because they've got a second income and they're looking to add, can afford to pay a higher multiple for business. So the effect is, of having it under management, is you can actually achieve a higher multiple.
Sam Penny (14:17)
kind of makes a lot of sense then investing in making yourself redundant. And also as the business owner, as the entrepreneur, it certainly does free you up to drive the business further and to enjoy the business a lot more as well. Now, tell me, you work three days a week, how did your life change when each single time with all the businesses that you run,
when you step out of the weeds, how does your life change?
Nigel Hall (14:43)
Five days a week or can actually turn into seven days a week because you don't stop thinking about it. And I think another big effect of having somebody else managing the business for you is that when you go home at five o'clock or take the weekend, long weekend off, that you really haven't got to be concerned about what's going on in the business so you can completely switch off. I think that leads to being more relaxed. It leads to being
more able to be in the moment all the time, rather than focusing purely on just what's happening with the business and being concerned. So takes a lot of stress from you and less stress leads to a better life.
Sam Penny (15:19)
Yeah, most certainly. Now I want to talk about some of the common pitfalls and lessons for owners from your experience. Where do you reckon most owners stuff this up trying to make themselves redundant?
Nigel Hall (15:29)
First of all, they don't even think about the step. I think that they're just too scared to let go. Then when they do want to take that step, they tend to look at promoting somebody internally who may have no management background or no management training. You really need someone who has gained that experience in top corporation or in a good company that does good training previously. So they do have those management skills that so that they do.
know the difference between a balance sheet and the profit and loss. They do have an understanding generally of what sales involves. So you do need someone who's got a good background in business, probably has got a good educational background. So my GM here, for example, he was with Flight Center before and ran a team of 50 people. So he's far better at managing people than I've ever been. And get people who are better at what you're not good at.
you'll get the results for it. think quite often people choose people who are too similar to themselves to run the business because they think that's what it needs. What you really need is someone who is better than you at the things you're not good at because you can help them fill the other gaps and they can fill your gaps for you.
Sam Penny (16:30)
Yep, exactly. Now, if someone's listening and they're stuck in the daily grind, where do reckon they should start?
Nigel Hall (16:36)
First of all, set yourself a goal that's realistic and maybe say, okay, in two years time, three years time, four years time, I want to have this business under management and then work backwards from there. So what does that actually mean? That will mean systems and procedures, documenting your workflows, putting systems in place, then recruiting someone, put them in into a position where they can start learning more and more of the business with a view that they are going to be.
your successor. So an actual succession plan is to fix those timelines and in those timelines then set interim goals using your smart goals so that they are set in a way that you can measure them. They're achievable, they're realistic and they're timely.
Sam Penny (17:17)
Now, obviously, getting the right people into the right roles is such a big thing. And I've worked with many business owners who have gone out employed people and after six months, they've gotten rid of those people. through the conversation, they raise a comment, they just weren't right in the role.
And I said, well, when did you first realize that? about two weeks in. Now as a business owner, Nigel and an entrepreneur, when you've got that gut feel about someone in that role, what's your approach?
Nigel Hall (17:52)
make a decision quickly. So if you know someone's not right after two weeks, get rid of them. However, what I would say is because it's the owner or the entrepreneur who's trying to move aside, that can be very difficult. And quite often people recruit people who are very good at a high corporate level, but they're not very good at getting stuff done. And I think you've got to really recruit for the role that it is.
not for the role you'd like it to be. Because if you recruit somebody from Telstra who's been running a team of 100 people, they probably know how to run people, but they don't know how to run a business. So you've got to be very cautious and you've got to bring them on at a position where they're probably not going to step straight into that role of your role, but step into a role where they can work to you, learn the mechanics of the business so that they can take over in 12 to 24 months time.
It's difficult to replace an entrepreneur, but you've got to have the trust in them and that trust is going to be built over time. And recruiting the right person from day one, you go trust and I can give them my business after two weeks is extremely difficult or even after six months. You know, I like to see somebody perform on a consistent basis in part of the business. Know that they've got that ability and then promote.
Sam Penny (19:00)
Yep. Now, Nigel, I always like to finish these chats with a bit of a quick fire Q and a four questions. Very broad. What's the biggest business myth you want to bust?
Nigel Hall (19:11)
I think many business owners look at their business and it may be one that's under management. It's generally people who run in their own business and they go, this isn't saleable. And we have these conversations on a day to day basis. What we find is if the business is set up right, if the owner is open to discussion, is a friendly person and they're doing something that's
needed by the community, means they're generating revenue, there's buyers out there for their business. What stops most businesses selling is that they don't actually go to market. So they decide not to sell their business because they're afraid of failing. And you've just got to take that step. And once you start playing the game, you've got a chance of success. But if you never play the game, you're never going to win the game. And I think the biggest myth is many businesses aren't saleable. Most businesses are priced right.
positioned right in the market and given it enough time to sell. don't all sell in four weeks, eight weeks, 12 weeks. Sometimes it takes a year, sometimes it takes a year and a half. Sometimes it takes three months, but give it a chance and you may have a pleasant surprise and more money to retire on.
Sam Penny (20:12)
Yep, fantastic. Now, what's one system every business needs?
Nigel Hall (20:16)
think everybody should have a CRM system these days so that they can effectively manage their customer communication and optimize that for follow-ups on sales, et cetera, et cetera. Yeah, your customer's key to your business. Keep your customer happy and your business will be happy.
Sam Penny (20:31)
Yeah. Now, is there one book that changed the way you think about business?
Nigel Hall (20:35)
Probably an economics book a long time ago. The one the one theory was opportunity cost and I work a lot with opportunity costs. So I can't remember which book it was in it might have been Milton Friedman or something like that. But opportunity cost is there's always a cost of doing something and not doing something. The biggest cost is always attached to not doing something. So always have a go always don't put things off. Don't wait to things are perfect.
Have a go, do what you think is right and it doesn't matter if it's right or not. As long as you've done something, you're going to move forward. Sometimes you have to make mistakes to find out and don't be scared of making mistakes.
Sam Penny (21:12)
Now, last question. What's your definition of success now?
Nigel Hall (21:15)
Definition of success, very much linked to enjoyment. Success is creating a working environment where people like to come to work and where your customers like to interact with the business. I think that's success for me.
Sam Penny (21:27)
Yeah, brilliant. Now, Nigel, where can people follow your work, connect with you? Where should they go?
Nigel Hall (21:34)
Yeah, well, I'm on LinkedIn. I post or two a week. I think that's about it really for social media. I've sort of abandoned everything else. Otherwise, through Bonza, you can get in touch. We've got a team here who will help every business owner look at what their saleability is and help them find a price at no charge. We quite often have conversations with people who say, look, I've got no intention to sell my business, but...
I'm going through a divorce, I just need a bit of indication what I can sell for we'll do that free of charge because we know at the end of the day, the more people you speak to, the more people you do good things for, that comes back as karma.
Sam Penny (22:06)
There always seems to be not just a focus on building the business, building the profit, the systems, those kinds of things. But I've heard through this a lot of doing good. Now, that's obviously part of one of your personal core values of doing good and providing more for the community, for people.
Do you drive your business on core values?
Nigel Hall (22:31)
Yes we do, So honesty, integrity, but also I think on a more basic level being friendly and being empathetic with people. Some people when they're selling a business are in a great position, some people are in terrible position and just understanding and listening to the people at that time is really key and I think that's one of our core values is just being empathetic to people.
Sam Penny (22:50)
Well, Nigel, thank you very much for coming on Built to Sell, Built to Buy today.
Nigel Hall (22:54)
Thank you, Sam. I enjoyed the chance to have a discussion with you.
Sam Penny (22:57)
Thanks for listening to Built to Sell, Built to Buy podcast. If today's episode sparks some ideas or you're serious about making your business more valuable, don't leave it to chance. You can book a free 30 minute strategy call with me at sampenny.com forward slash strategy. We'll dig into your specific situation, map out your next moves and make sure you're all set up for success. Whether you're looking to exit, buy or simply create more freedom in your business.
If you found this valuable, don't forget to subscribe and share the show. I'm Sam Penny. See you next time.