Craig: All right, good morning, everyone. Hi, welcome to the Smart Arts. It's our monthly one-hour business roundtable. I'm Craig Edwards from Beam Automation, and I'm joined from Dan Sheehan from The Desk, who's also the co-host of the Smart Arts. Today we've got a sharp group of experienced business operators in the room, and we're here for a relaxed, no-fluff conversation. The idea is simple. We bring smart people together to share ideas, practical insights, wins, challenges. and real lessons we've learned, including the expensive ones. No sales pitches just honest business chat about systems, marketing, admin, operations, and we're gonna bring up some theme topics we're gonna talk about today. We'll kick off with some introductions around the room and we'll dive in today's topic for the main discussion. At the end, everyone will share their smart arts tips of the month. So grab a coffee, get comfortable, and let's get into it. So I'll go around the room with... Charles Zerafa ⁓ introduce yourself.

Charles: Hi, thanks for the invite here. I really appreciate it. Yeah, so I'm from Integrity Finance. We're commercial finance brokers and run a debt advisory company. We don't only specialise in securing the finance, but also helping bigger companies achieve their goals, whether it's buying companies, buying big assets, and improving their P &Ls and balance sheets. So it's a true advisory service, as well as securing finance.

Craig: Fantastic. And Robert, introduce yourself.

Robert: Hi, good morning. Thanks for inviting me. ⁓ Robert Sayeg from Go Viable. I'm an R &D advisory. ⁓ So my specialty, if you want, is building products for market leadership. As I like to say, learn from experience, get it right the first time. So it's about getting those three layers of strategy, planning, implementation right to nail your product. And a nutshell.

Craig: Fantastic. And Daniel Calagheri, please introduce yourself.

Daniel: Good morning, thanks for the invite. My name is Daniel Caligari from Expert Business and I work with business owners to understand what the business is actually worth and more importantly how to increase the value before exit. ⁓ And then what we do is actually help them transact the business all the way through to settlement. So we turn that potential into something tangible, which is money in the bank.

Craig: Yeah, Dan Sheehan would you like to introduce yourself?

Dan S: I love to. Thanks, Craig Guys, welcome. Dan's my name. Great to be here talking with some really great people about fundamentals, multi-level insights into the good, the bad, the ugly of running a business. I work in tech and data architecture trying to make bad data into good data. And it's really always very, very interesting to see the nuanced expertise of all the different elements within a business. And it's so exciting to learn something new every day. And the subtle brilliance is really what I like uncovering. So it's going to be an exciting series. Craig, I'm looking forward to it.

Craig: Yeah, absolutely. All right. So we're going to kick things off. What we're going to do, what we tend to do with the smart arts is share a whole heap of range of topics that are all the nuanced things that happen inside and outside and around running a business. I'm just going to share my screen and I'll also ⁓ for the listeners at home. We've got 18 topics here, so we're going to talk We've got some options to talk about sales and selling, marketing and branding, innovation, tech and gadgets, business and structure, leadership and management, operations and productivity, finance, strategy and direction, people and culture, legal, production and logistics, administration, R &D, mergers and acquisitions, time-saving and management. future proofing and freedom. mean, there's a lot there, but as we all know, there's a lot to running a business and there's many hats we've all got to run. So I'll leave it to the group. If you've got a particular preference on what you'd like to talk about, ⁓ please put it in the chat or verbally speak it. ⁓ Give us a couple of minutes and we'll lock a topic down. What's everyone's thoughts?

Charles: I personally think business, given the guests here, business and strategy, the strategy one would be a good one because we both are involved in it from a different angle.

Craig: I see construction. mean sorry. Business & Structure you ⁓ Strategy side, yeah. ⁓ your strategy direction we've got on there on the ⁓ Is that okay? Everyone comfortable with that or any other ideas?

Charles: I know the strategy.

Robert: Yeah, I love that.

Dan S: Yeah, that's a great topic. Kick off.

Craig: Okay all right strategy and direction it is. ⁓ I suppose from my sort of insights is we do a lot in this sort of space but more on I suppose the marketing and sales side and I'm not here to go into you know selling what we do but looking at from a marketing standpoint is that's always the first point of call of any mark any good marketing a lot of bad marketing is done with more which is throw stuff to the wind and hopefully it catches. But I'm keen to learn more about strategy and direction, I suppose, Charles and Dan Calagheri, in your sort of space in terms of, I suppose, the finance side, the M &A sort of side and how you apply strategy and direction in your instance.

Daniel: So you want to go first Charles?

Charles: I'll leave it to you my friend.

Daniel: Okay, so yeah, look, strategy and direction, it's no different than any other function in the business. Like with marketing, you've got to have a strategy and then you've got to go and execute that strategy. It's no different when you're looking at an exit. So the more time you've got to execute it, the better. So the more runway you have before exit. So what you can do is it's great to have a strategy in place. And then you go about fixing the things that you need to fix to make your business more saleable or more acquirable. And then you look at even with the strategy about who the target audience or market is or who that buyer would be, whether that be another trade buyer. So you would obviously set the campaign up to suit a trade buyer, which would be consistent outreach as opposed to just putting an open campaign and just having, say your mum and dad type of investors ⁓ inquiring about the business. But also you can target certain areas that would, in your industries that you would, that the business would land well with. So then you can structure your campaign to fit that strategy. The other thing as well is that the exit strategy is a little bit more complex. It's how long do you wanna stay with the business, if at all, but also, how do you see yourself after the acquisitions occurred? ⁓ Do you wanna just have a clean exit ⁓ and it's a walk-in walk-out type of arrangement? Well, that has to be approached in a little bit of a different way where the business can be handed over on a walk-in walk-out basis. So you'd need to go and make sure that the system's highly processed, ⁓ the business runs without the owner, and then you'd have to look at ⁓ that it may not be there from day one. It needs to take a little bit of work to uncouple the, untangle the owner from all of the operations of the business. So that can take some time. So you need to have a strategy to be able to employ. So that could be quite involved. It could be, for example, the business doesn't have a marketing function and it relies on a lot of word of mouth referrals. So then you have to build out the marketing function in the business. the financial function, could be that, and ⁓ probably speak to this as well, more depth, where the business doesn't really have ⁓ integrity in the financials. Okay, so you'll need to have to go and prepare that and bring on an advisor or go out and speak to your accountant ⁓ get that prepared so the business, ⁓ when you're going out to market, ⁓ easily ⁓ able to be ⁓ but also ⁓ be able to ⁓ acquire, look at the business and see what's happening and what's going on. ⁓ that's really, ⁓ and then that extends also to your legal agreements. It also extends to a lot of other areas in the business. ⁓ And some businesses are more prepared in certain areas than others. ⁓ generally, what we generally find is that a lot of business aren't ready for sale ⁓ away. So you'd have to do a bit of work.

Craig: Before I jump to Charles, I'm throwing that question out here. What happens if you don't have a strategy? What's the ramifications in your space, in terms of if you don't have a strategy? Do you come across that a lot in your space? they just want, just sell me my business.

Daniel: Yeah, okay. The way I like to think of it is everyone has a strategy, right? either have a strategy or you have a hope strategy. So we all know what happens with the hope strategy. Sometimes it comes off and a lot of the time it doesn't. So if you're relying on the hope strategy that hopefully someone will come on and acquire me and ⁓ you'll be leaving money on the table. But also you could also the consequences are that you could be in the business for a long time after

Dan S: Yeah,

Daniel: you want to be or it's been transacted.

Craig: Right.

Charles: But you're forced to exit with very low purchase price at the very end. Or a business that's unsellable, potentially.

Daniel: Yeah, you can be keeping the business. Look, you know, the stats on businesses selling, it's more likely that the business won't sell or you'll keep the business than it is that you will actually successfully transact the business. And the reason why the numbers are skewed that way is because of the reason people don't have a strategy. They wait really to the end till they've needed the business sold yesterday. ⁓ And then they look at trying to sell the business in a quick timeframe. and they don't leave themselves enough room to be able to execute a strategy, be patient with offers, go out to market, run a proper campaign. And then what happens is that they don't get what ⁓ the business could potentially be worth if they did ⁓ have a bit more strategic, but also allow the time before they wanted to go out and sell the business.

Craig: Mm.

Dan S: Dan, I've got a question. know, there's, there's an old adage, if it's not written down, it doesn't exist. And for a lot of people, a strategy might, I mean, they think it's just their plan. It's in their head. They know what they're doing, but no one else does. There's nothing for the rest of the business, the team, the leadership to follow. If, if someone doesn't have, uh, you know, getting ready for sales strategy or a strategy. Where do they start? How do they start thinking about that? ⁓ You know, the fundamentals of it are really important before we even start looking at the mastery of it and that sort of white belt, blue belt, black belt kind of mindset. Take us through a white belt kind of start.

Daniel: Yeah, okay, at the moment, it's probably easier than ever to get started on the strategy, just because you've got AI, you've got things that you can go out and maybe put into something into ChapGPT and say, look, what would be a starter strategy for me? What should I be looking at? Okay, so it's about the awareness. First step is having the awareness that you need to go and do these things, not just, okay, I'm going to go sell the business and then I'll probably get a buyer within a month and then I'll be off. ⁓ and with a clean set of heels and ⁓ money in my bank. So it needs to have the awareness to be able to say, this needs to be done. yeah, looking at making the inquiries into ChatGPT would be all Claude or whatever you use. And having... And then documenting, documenting's actually become a lot easier than it used to be. So SOPs, it's probably easier than ever these days to document SOPs, but also to be able to record, start to record what you're doing. So writing down what you do and recording it, and also having your staff record the process in which way they go about completing tasks, ⁓ going about... ⁓ getting certain things done. And what happens is, once you've recorded that, then you've got essentially a manual or SOP booklet that you could hand over to somebody. So in the business could potentially run without you being in the driver's seat.

Dan S: A really interesting ⁓ point, Daniel, thank you for sharing that. I think really interesting about today is we've got Robert from inception of the business and developing the product as the business is growing and we move into Charles and funding and structure and what that looks like. then near end of that strategy, Daniel Cagliari kicks in with ⁓ You know getting ready for sale. So if I could bring a question back to Robert When you're developing a product when you're looking at something do we have anything? What's the strategy that we're focusing on from the outset? Fundamental what's what's the slab we're pouring to our building?

Robert: Thanks, Dan. ⁓ If you want to summarise strategy in one another word on the back of it, it's the question why. And that's often an overlooked question, especially in the R &D. Engineers love to build things and put them on the table, make sounds, make visuals, and it's working. And then you start asking the why questions. Why are you building this? Why is it going to help the market? Why, why, why, why? And then from that bubble down to... what actually should it do and ⁓ how actually are you going to do it and what income is it going to generate for you and why are you happy with that kind of income? Back to strategy. If you don't have the why's, then it's kind of doomed, unfortunately. Especially in R &D, like we're talking about ⁓ six years ago and it keeps growing. Unfortunately, it was $2 trillion a year waste ⁓ around the globe. That means money poured into R &D that never gave any dime back. Two trillion. It's a huge number. And everyone knows about the statistics of startups that maybe 10 % succeed and stuff like that. And that's where I love the challenge of not look at something and say, it work and will it not work? Is it doomed or is it successful? But actually, answer the question, how can we make this successful? How from what you have now, we can make the building blocks so it becomes successful with fine tuning, either on the strategy level or then the planning level or maybe just implementation. ⁓ Sometimes I think about it like a pendulum. The strategy is that anchor at the top. You see all the swings down there, but it's really about that anchor at the top and any slight movement there. is just gonna swing the whole thing down there and the question is, is it gonna give you the outcome you want?

Craig: My question to you though Robert is how can you provide a strategy to something that does not and has never existed before?

Robert: And that's innovation, right?

Craig: I know, but still, you've still got to have a plan. Like the old architects who were building the original building. How wide is it? How many floors is that? Windows, that the doors? And someone, guy's next thing you're crazy, man. You can't, what's this thing you call a building? I'm curious. Sorry.

Robert: Yes, it goes.

Charles: problems, Craig. It's solving problems. What's the problem that needs solving and what do we need to do to fix that and think of different ways of approaching it?

Robert: Yes. On the strategy level is trying to identify those problems as part of your plan before you even start. it goes, look, the knowledge, the human kind has enormous knowledge and most of it is millennia old. We just sometimes miss connecting the dots between things. So even something as old as what you know, what you don't know, what you know, you know, what you know, you don't know, even a simple chart as this and you map.

Craig: Sorry, sorry Robert.

Robert: And then you start building your plan from that. You identify the risks, the challenges, your assumptions, your exclusions, what shouldn't I touch now? And then from there, that becomes the core of your strategy. Why am I building this this way and avoiding those and then go to the planning.

Craig: I suppose risk is a big one and suppose Charles that would come up quite prevalent I'm assuming in your strategising and direction for your finance planning am I assuming that correctly?

Charles: The finance companies is all about risk mitigation and assessing the balance of the risk and charging accordingly. That's the fundamental of their role. But ⁓ from my perspective and in a funding and a debt advisory way, we see ⁓ strategy. People come to us for three things. They rather got a growth strategy to grow their business and they want some money to invest in it. They want to purchase an asset. So they're trying to purchase an asset that's going to help them. build more money or be sold for a profit. But there's another element that we do is we actually help the clients create wealth strategies too, unique wealth strategies to them. And so what, if I could try to fit in with what Daniel was talking about before, is like you said, some people come to us with a different, at different levels of being prepared. So they've got to suggest, they've got an idea, they've got... they do have, ⁓ sometimes they've got more evolved than others, if that's the right way to say it. ⁓ they've got ⁓ a level of paperwork and they've got an idea and ⁓ I said, most things line up, but there's a few things around the outside that need to be tidied up. ⁓ ⁓ as I said, the common theme towards a strategy is, it's not just an idea, is it tested in the market? it ⁓ to be, how realistic is it to be executed? and how thoroughly is it being thought through. So for us, some companies come to us with a growth strategy ⁓ for mergers and acquisitions and want to buy this market share we want to dominate in. And they make a lot of assumptions, but they don't know how to, they haven't taken it down to the next level as in not only identifying the target, but even testing that market. So too many people have a lot of assumptions when it comes to strategies and going back to Dan's question again, if I can, I'm trying to link this. My question is up to everyone's responses before. Is it to say that when you're trying to execute a strategy, it's getting the team together. It's getting a team together to execute it. It's doing the research to reverse engineer what you're trying to achieve. And when you're planning for something, I like Dan's idea about doing a bit of a chat GPT and getting some framework, but you can early engage people like Daniel as well to say, I'm preparing my business for sale. You know in five years time, can you just do a quick audit of my business and see where I'm at and tell me what I need to focus on and I want to sell to a multinational is you it Would it be attractive to them and is that the best pay people to sell it to and I mean just one consultation with Dan ⁓ You know five years earlier is gonna make them much more prepared than doing a check GBT and then forgetting about it for three years and working towards a plan so ⁓ So, know, and even with property product development, you know, and, you know, seeing someone like Robert early in the piece to make and working together and partnering with them, they will often, like I said, they'll often actually walk them with them along the journey. And in finance, it's the same thing. So people will come to us and they're not quite ready yet, but we walk with them and help them execute their plan a lot better. So we help them prepare for a bigger acquisition, maybe. Like, so they come to us with a... small plan but we say hey you've really got some good foundations here you could really execute something much larger than you ⁓ if you put a bit more if we get a team around you you fix your financials we do x y and z and prepare you for that bigger acquisition wouldn't that be better than fumbling through executing a few small acquisitions because they're very hard no matter the size of an acquisition yeah so so you know there's a lot of there's a lot of ⁓ ⁓ Teamwork is a big one when it comes to strategy for me. So it's the idea, but it's putting the team together and it's how you approach it. ⁓ How you approach the strategy too is a really big one and getting consultants and people around you that's had experience in that field, not making assumptions is a big one in my mind.

Craig: You mentioned a couple of well, you mentioned one important point, hand holding where from my sort of side, strategy is great. Obviously, you're trying to take someone from here to from A to B and having that clear direction. Yep, that's where we're going to sail our ship. And these are the waters that we're going to sail. But there's that middle ground because, you know, it can be a long time to get from A to B. One of the biggest challenges, yeah, especially in Robert's place, absolutely, but even in marketing. And one of the biggest challenges, yeah, we're happy to hold their hands and guide them on that sort of stuff, but just keeping them, making sure that they stay the course and stick with you and believe in the journey and believe that you're going to take them there. I wanna, I suppose, open the floor a little bit and maybe over to you, Dan Sheehan, just in terms of, you you're doing big. data builds which can take months to plan, to strategise, months to execute and then you're into the building phase. How do you guide them? How do you hold their hand and make sure that they're going to stay the course?

Dan S: ⁓ really good question, Craig. and it's really wonderful listening to everyone's perspective. ⁓ and it reinforces something that I believe in anyway. And that's that within the overarching strategy, there's multiple, ⁓ individual departmental, ⁓ sort of strategies within that, that overarching business strategy, ⁓ to achieve what we're wanting and and the alignment of the strategy and the impact of the strategy is measurable. So we can see if it's succeeding or not. And this is tied into data structure and I'll bring it together. Having a plan is awesome and without a plan, you're going nowhere. You can change the plan. You can't change the plan if it's just in your head, if it's written down. And I talk about architecture a lot because it's a really simple way to look at ⁓ building data and connecting departments within a business. So if we're designing a house and we think that the window should be on one wall, you know, during the build, if someone's like, actually, could you move the window to the other wall? Of course we can. You know? We can pivot, can change because we know that the windows going over there, if we weren't sure where it was going, you know, or whether there was supposed to be windows or how many bedrooms you've got, you know, you're lost. So the ability to have those ⁓ gutter rails, you know, like in bowling to keep you on target and you can pivot and change and direction and Robert will tell you that sometimes you end up making something completely different ⁓ But the idea of having it written down gives everyone else in the team clarity on what the mission is. The individual tactics will change along the way, but the strategy document's really important.

Craig: I used to use the analogy of climbing a mountain, especially for really long projects. And because it can be very arduous, no one halfway through, no one talks to each other. can be very lonely. But in terms of going back to the point of trying to make sure we all stick together, we all stay the course and we're all going to get there. We started at the bottom and we've got to get to the peak. And what we used to do, you know, I suppose a common analogy in project development and Robert, you could probably and it's the same sort of thing, is milestones. But what we would do is we would ⁓ allocate when those milestones came in. But what we would also do is somehow try and make those milestones like when you get to certain plateaus off the mountain and making sure that the outlook of each and every stage was better than the next. So that way you got to one plateau, i.e. one milestone, and the... and the customers going, oh, that's cool, that's great. We've got to that plateau and you look out over them, you can see the rivers and all that sort of stuff. But if we keep climbing, you can even get a better view. So just trying to factor that in terms of project development and that way they're getting excited, they're opening up to more ideas and they're more willing to stay that course. And that's just from our experience. Robert, I'm keen to throw that to you in terms of... And Dan just touched on that before, that pivoting aspect, bright and shiny thing over here, or no, there's a better pathway there. How does that work in your product development sort of space?

Robert: Yeah. And speaking of mountains and hand holding, I like to the analogy of Sherpa. So if you're really climbing the Himalayas, doesn't matter how much strategy and planning and experience you have, you still wouldn't do it without Sherpa who's holding your hand. Otherwise, maybe you make it up, maybe you won't make it down, who knows. So just my two cents on it. Yeah, and I love to also differentiate by saying ⁓ I like dynamic sequence, not ⁓ stale sequence. And many times people, even in the agile or waterfall, doesn't matter. You come to the strategy and the plan and it's quite sequenced, rigid. And if they pivot, it's kind of painful because everything is, it's like an earthquake. Rather than dynamic sequencing where in my world, I like to use something that I call minimal viable milestones where each milestone has very specific characteristics. ⁓ It answers a blaring question about risk so you can pivot at that point and it must make revenue. Otherwise, you're just spinning wheels, de-risking things and who knows when the end. If at each and every milestone you have better clarity on the fog around you and you're making money while you're doing that journey, you are better set for succeeding and get to that market leadership I was talking earlier about. Can I tell a two minute story about this? I think I told this to a couple of you, but maybe for the postcast. It's something that happened to me when I was 12, 13 years old. I was in a summer camp, a computer programming summer camp from all things. But at the end of that month they did a... ⁓ sports competition and one of it was swimming and it was on the shore of ⁓ Sea and everyone was arguing who's gonna be second because everyone knew who was the best swimmer in the camp I think John was his name so everyone okay John's gonna win who's gonna be second and then on the day of the competition everyone's lined up off they go and everyone starts shouting John John just because he should actually look around he was just swimming in the wrong direction He took off so quickly and started swinging in the wrong direction that even though people were calling his name, he couldn't hear them. I think after a while he realized, I've been swinging for a while, so let me just look around me and you see him poking above the waves. And then he realized, ⁓ the buoyant is over there, I'm over there and I should just come back. And at the end of the day, he came back and he was last in that competition. Everyone still respected him as the best swimmer in the camp. He just came last. that day. ⁓ And that again, ⁓ what direction are you taking? When are you pivoting? Who's actually watching your back while you're doing it? And are you you listening to the voices behind you saying come back or just keep swimming because this is the best thing you know how to do. And I love this analogy on many levels, like the muscles were very proud that day they may they have said, ⁓ it's the best cardio Performance we've done ever and we should be very proud of ourselves, but at the end of the day they lost the race

Dan S: It's hilarious and really an awesome story about strategy, teamwork, communication is super important and you know in a technical world where things, details are super important for us, ⁓ calling, having a glossary

Craig: in

Dan S: or agreed terms for things. There's the ambiguity where people don't call the same thing as the same thing. you know, it causes enormous angst when I'm saying a word and it means something completely different to you. So that agreed language to communicate with is super duper important.

Robert: Terminology

Craig: I'd like to open up to Charles and Daniel. suppose I'm curious to know about in that middle stage or whether it's even at the start or towards the end, when we, I don't know what the term is, but when you, someone left a field that was never with you at the start, but somehow has come out of the blue during that process and said, ⁓ hang on, I've got a better way of doing it. And that could be a customer, that could be an advisor. Have you ever been in that sort scenario where someone comes in to try and kick off all the chess pieces and throw a curve ball?

Daniel: Yeah, I could probably start with that. mean, look, yeah, yeah, that happens all the time. mean, look, know, businesses are dynamic. They're fluid. Things change. They change. Look, look, look what's happening at the moment. Things are changing. So I think, you know, having a really rigid structure out to your strategy, ⁓ it needs to be, you know, have a bit of flexibility in it. So yeah, there is there is, you know, new ideas that always spring up. There's always people that come into the ⁓ to the process. and have their own ideas of how to do things, especially with an exit. what you'll have is you'll have ⁓ the, it'll get to a certain point where everything's agreed and then you'll have to actually bring in other advisors, whether that be financial or there'd be accountants or solicitors, and they have their own idea of how to actually do things. that's where it becomes really critical at the outset to have a really strong strategy, but simple. but also have the right people that are responsible for executing that strategy as well. So, you we touched on handholding, we touched on, you know, climbing the mountain milestones. It's great to have a strategy and I've seen some fantastic strategies, but they haven't been executed or haven't even been employed because no one's, the person responsible for executing it hasn't been identified. Whether that be the business owner and it's not uncommon for us to say dual valuation. identify what needs to be done to achieve that exit value. These are the drivers of value. Okay, the owner says, I'll go and do these things. And then you bring them back six months, 12 months later, and haven't done any of it. Okay, because the two bogged down with the day to day. And that's where you can bring in the advisors, you can bring in somebody that's responsible. And then you know, really be be open and honest and say, do I have the time to be able to, to do these things? And if I if I, if I am going to do it, who's going to keep me accountable? as well. then what happens is, is you don't have like, again, going on that that hope strategy or going on that, that strategy where it's not really clearly defined. That's when you probably get these outside influences coming in and saying, you know, like, this is the better way to do it. You know, this is not uncommon also for vendors to go to a barbecue on the weekend and hear how, you know, John did it in his business and come back and say, I've got a, I've got a new way of doing things. ⁓ So yeah, when you have a really clearly defined strategy, you really won't deviate from that unless you have to, but also you build in a little bit of flexibility as well to be able to take in these ideas and say, look, know what we thought the best way to do it back in six months ago, may not be the best way going forward in today's environment.

Craig: I suppose yeah, when you talk about market shifts and today's climate was shifting daily just about, or weekly. ⁓ Charles, how about you? Like in terms of having to pivot or having to adapt or change or whether someone's come in left to field or the bad actors come in at the very end.

Charles: Well, the funny story that happened just recently for me ⁓ that resonates really strongly with this one is a client that came to me after negotiating a business purchase with the vendor for about, ⁓ they were negotiating for about 12 months and on the purchase price on who's going to, you know, how long he's going to stay in vendors terms. And they were talking about every facet that mattered to them without putting the team together or that early engagement that we spoke about. So I always talk about getting out so that he calls me about finance. So all right, I'm ready to go off. struck a deal with the vendor and he starts going off on how he's how good of a job he's done. And he's almost gloating that that they've agreed to so many terms and it's going to be a smooth settlement. I know he's sort of come with an air of confidence that he was going to buy the shares in his company. ⁓ I and I said to him I said I can go and get the finance approved but you haven't engaged your solicitor or your accountant yet and I'm really concerned about that because this the legal aspect of this is is quite complex and I said there's a lot of ramifications to it I said I don't know whether buying the shares in the company's the best way to go because it's a profitable company we've got tax you'll have tax implications and I said I don't know a lot about tax but I know enough to know that if this is a profitable company and there's gonna be a the shares isn't as gonna be ⁓ simple as you think and ⁓ anyway, so he just said I'll just he was trying to be very aggressive and said ⁓ go get me the finance and we'll sort that out later ⁓ He goes and I go away get my term sheet negotiate with the banks this end as he said as you can see what's gonna happen the solicitor gun comes in and says Buying this buying this business is gonna trigger a massive capital gain for the vendor and it's actually not in his interest to do it because it's the capital gains tax not the not the actual operating tax for their operations. I was gonna swing the deal in the favor of the, sorry, it was gonna negatively impact the vendor. So all of a sudden he's going, oh shit, I'm gonna get a couple of million dollar tax bill by selling the shares. And all of a sudden, gotta take months of negotiation, you gotta sort of unwind it again, and the solicitor had to work out a way to set up a new company. they had to redo the then all they had to address issues that they didn't even speak about, is valuing the stock. You know, we have to assume a new blank slate. So how are we valuing the stock? What's the goodwill worth? And so all this work that this guy thought he was doing a lot of it on his own and he was really proud of himself, but didn't engage the team early. So if he just engaged that, and I always say to a lot of people out there when they're talking strategy and finance, You've to have your accountant, you've got to have your lawyer, you've to have your finance people along the journey with you from the start. Even refer back to them and say, here's what I'm doing, at what stage do I need to come back to you at? And they say, away and agree to terms and they'll give you a framework to work through. And like I said, the same with the legal people and the accountants. ⁓ If you're not all working to the same goal, you're making assumptions that can come and bite you in the butt later. And yeah, so I'm a huge advocate in getting a team of people, the team of experts that know what they're doing, working towards a common goal, listening to everyone. And that's the best way to get the outcome, a good outcome when it comes to strategy and avoiding those pitfalls and making silly assumptions because we see it all the time.

Craig: Yeah, I think this is where SOPs are so crucial, even at the start, but also even sometimes during the halfway through as well. and having a playbook or something to at least so they know that this is the plan, this is what we're following. So we don't deviate.

Dan S: And also identify when to deviate and when to pivot. And that's going to tie into something selfishly for me, which is data that provides the insights that we know when to pivot and how you build that and how you have ⁓ transparency ⁓ and measurable quantifiable numbers about your business. ⁓

Charles: I'll even say when it comes to business purchases as well, and Dan will probably attest to this too, transparency of actual data is a huge one. So ⁓ verbalize my business is worth this and this is what it is and here's my website and here's my financials. But there's lots of like licensing and there's lots of aspects of the business that ⁓ in paperwork and document that's really important to a business. ⁓ And unless you've got it all stored and easily accessible and shareable. without, know, with share files, with privacy and all that sort of stuff, because you don't want to be emailing documents that are sensitive, with sensitive data at all the time. There's just even exchanging and collating and having, you know, data packs and document packs that you can send people. So when I'm talking to the accountant, ⁓ he's got all the information available to it. It's not just verbal and it's not just a handful of bits and pieces of documents. ⁓ And I said, again, apply the same to... everyone here and and even the lawyers. So just as I said, just people, people got to think about making sure like their trust deeds, their, their like, like I said before, the licensing and anything pivotal to their business operations, the SOPs or the marketing plan or, know, everything about everyone wants to know what AI you're doing or what your, what your system stack looks like. Have all that stored in a place and easily accessible and easily handed over to the right people. to be able to review it and analyze it as well because it's all important. Exchanging data is a huge issue these days because of the volume of it, really.

Daniel: I'll just add to that as well. ⁓ That's a really good point there, Charles. mean, this ⁓ and this information will have to be handed over at certain stage in the due diligence process if you're looking at selling your business or looking even at getting finance. So yeah, it's great to store it and it's great to be able to put all that together. But it also has to be handled with a bit of care as well. So you can't just hand over all the information all at once. It's an information overload. type of scenario where you want you'll just you'll you'll you you what you need to do is you need to look at a cake, ⁓ supplying a potential ⁓ purchaser with ⁓ we call it a piece of cheese at a time, right? So what happens is, is that you give them the first set of information and the next set as you go through the process and how to handle that information is really, really, ⁓ it's it's it's sensitive, but it needs to be handled with a bit of care. So for example, you're not going to go off and give your ⁓ your, the purchaser, like all of your contracts details straight, straight from day one. Okay. That comes later in the process. So you really need to have the right advice to be able to give that piece of information at the right time. Okay. As the, the, as the ⁓ purchaser progresses through the, ⁓ the process, because the consequences of that is, is that it can cause damage to your business. So if somebody comes in and wants to look at the inside workings of your business, knows how much you're charged, knows your margins. knows your contracts and is not really interested in buying the business. Okay, now they have that information ready to be available to them. And then it could spawn a competitor. could also fall into the hands of a competitor. So you really need to make sure that you're giving that information in a timely manner, but at the right time as well. I see a lot of ⁓ business owners trying to do this process themselves, have just given everything over. And what happens is that it's just caused, you know, 100 questions coming back the other way, which they've got to cut off and they're trying to run their own business. So you really need to make sure that, you know, it is a, ⁓ a genuine buyer. Okay. They've got the funds to, to complete the transaction, but also that, you know, you have met the owners, they know the operations and then we start to get into that, ⁓ the nitty gritty or get into the weeds on a lot of this information, but it's great to start to prepare it all because it will be asked for at a later date. And also with the introduction of AI, these lists are becoming quite exhaustive. Okay, we need all these things for due diligence. So it's to keep the deal moving forward. It's great to have that already prepared. So when they ask for it, you're already ahead of the curve. So I don't want to go away and start to get my accountant to pull up this information or my CFO to pull out this information or I'll get back to you on that. It actually stalls the deal. So what happens is two to three weeks, you've got that information, probably looking at something else. You have to keep the deal moving and flowing. And generally what you find is if you can do that, a lot of the buyers will say, okay, well, you're really well organized and you you've supplied the information when I've asked for it. And that puts your head and shoulders above a lot of the other businesses that are trying to sell and get the same outcome as you in the market.

Craig: Yeah, think yeah drip feeding data is key, especially in our game as well because if you've bombarded with too much of that too early, it can also lead the project astray. We find if it's if they know too much too early, then you sort of get into it and then they start going, but what about this? And what about that? Hang on. No, no, no. You got to stay. We get through stage one first and then we'll start talking about stage two and three. Don't. Yeah. So that's what I think staggered information is key. But going on the, I suppose the data theme, how important is that for you to make a ⁓ decision in of your strategic piece and planning for product launch, having that data at the start, if it's, you know, readily available, I suppose.

Robert: Yes, ⁓ very quite so. Especially I work a lot with medical device companies and it's heavily regulated. So data and documentation and audits are part of it. But not only that, if you don't have that luxury of fail fast, learn fast, you have to kind of nail it. You cannot sell until you have clearance from the TGA or the FDA. If you don't have all the data and do the plan right and then go all the way the whole mile until you get the approval from the regulator you don't have the license to sell you cannot make money so it's it becomes really crucial not to go wrong and ⁓ sometimes it's as silly as asking questions who's gonna replace the battery and it's gonna be ⁓ an old person eight years old at home alone using your device or a technician that comes to the hospital and changes Just answering that question will impact how you build your product and what kind of documentation you build around it and what are you going to tell the regulator about it. yeah, data is always important.

Craig: Understand Dan Sheehan all you're the data King

Dan S: It's a funny thing. Data, ⁓ you got to start small. mean, data is everywhere and people don't realize how much there is. And for us, it's a variable. In the equation, it's a variable. So your first name, your last name, these are data points. these, you know, talking about ⁓ dynamic ⁓ ability to move where you're at. When we collect these things, forms are the most important things and having a form as boring as it sounds allows us to control data. And so if we know where it's coming from, we know where we want to put it. Then if we know where we've put it, like your grandfather shared, he knows where to find it. And then if we know where to find it and we've got templates for all these fundamental things we do within our business,

Craig: Yes.

Dan S: We can dynamically populate those fields across any document, any time. And if someone fills out a form once, never have, truly, we never have to ask that question ever again. We can pre-populate everything. Now that takes work. Organizing data takes work and thought. ⁓ And sometimes it's exhausting, but the outcome is when you understand what you have and what you need, You can simplify every process and it creates enormous efficiency. then, know, ⁓ Daniel touched on it earlier. ⁓ You know, we can control who can export data, who can delete data, ⁓ what data can't be seen by what teams that's commercially sensible or who needs to see what, keep it simple. There's so much of it, keep it simple. Different teams need to see different information and don't show them anymore. Because it'll just distract them from the core of their job.

Craig: Yeah. Data controlling data is absolutely, absolutely key. All right. I just gonna, suppose great chat guys. We we could go on for hours, I reckon, but I'm going to wrap it up. And I suppose back, coming back to the topic of strategy and direction, if there was one piece of, I suppose, advice, ⁓ just under that theme umbrella, what, what would you provide? suppose, Charles, I'll start with you. If there's one key thing about getting your strategy in direction, right. What would that be? in your space.

Charles: ⁓ Like I sort of indicated ⁓ earlier on, bringing the right people together. Not making assumptions and checking in with the right people with the right expertise that's done what you've tried to do before, that does it successfully and getting them together and helping you through that journey.

Craig: Yeah, fantastic. And Daniel?

Daniel: had to take one thing away it's this ⁓ stop thinking about profit and start thinking about risk adjusted profit. So buyers they don't pay for what you earn today they pay for how confident they are that you keep earning it after you're gone okay so that's what we call future maintainable earnings. So here's a simple exercise ⁓ ask yourself like if you disappeared tomorrow what would break in your business? Okay, key client relationships, sales pipeline, operations, decision making. every one of those is a value discount in the buyer's mind. Right? So that's that publish. They will give you the answer. Well, you ask them questions, you'll get the answers and that's what to go to work on in terms of strategy. Okay. And what you get is you get a better business in the short term, but also you've got a more saleable asset.

Craig: Fantastic. And Robert?

Robert: I would say we talked about being ready and avoid the failure or the angst and all that. And I think one angle to look at it, it's not necessarily ⁓ huge success versus gloom and doom. Although that happens like one in six failed project causes the business unit to shut down either a department in a company or the whole company. I would say it's the delays and those error and trials and cost of delay. And I'll just leave you with that tip. Cost of delay is a real thing in projects. So people can look it up and learn about it. And that's where you want to minimize your waste. Let's put it that way.

Craig: Yeah, fantastic.

Robert: Sorry, can I add one quick anecdote about this? Autopilots, if you think about it, people can look it up. Autopilots were adopted in planes before World War I. And when you think when planes were actually invented in 1908, so in the span of six years, planes back then already had autopilots because early on they realized...

Dan S: No.

Robert: half an angle deviation and I'll end up in the South Pole instead of the North Pole. So autopilots were as early as that. They didn't even think of flying planes without direction correction.

Dan S: And it moved on quite quickly from just the rope around the stick.

Robert: Yes. Yes.

Craig: You

Dan S: ⁓ Daniel, talking with masters of their own environments, future maintainable earnings is a turn of phrase. It's such an obvious thing that we think of, we haven't named it, so it doesn't really exist. It's a concept, but you've named it. ⁓ Strategy has to be written down. If it doesn't, it's not written down, it doesn't exist. You know, we can't measure it. ⁓ The more you speak with brilliant people, you know, it's humbling because you're like, that's brilliant. You know, I should have thought about that. And everyone has nuanced knowledge, know, hub and wheels style that you need all these elements contributing to success ⁓ and a team of great people working with you. And I think It's only, you know, the older we get, the clearer that becomes. And you can do it the easy way and actually engage with people that know. Or you can discover it. And that's a really expensive way to learn something sometimes. Thank you, guys. That was wonderful. And it's really nice to learn something every time you talk.

Daniel: Thanks guys, thanks for having me. That was great.

Charles: Thanks everyone.

Robert: Yeah, I love it. Have a good day and good weekend.

Craig: Well, thanks everyone for joining our first very first episode of the smart arts. ⁓ You'll be able to catch us on our LinkedIn channel. We can have various guests each and every month. So we'd like to thank Charles, Daniel and Robert for today's series. And we look forward to having a few more in the future. Thanks, guys.

Charles: Thank you, gents

Dan S: See you guys.