diggiddydoggydaycare® - SYSTEMology® Case Study

Dave here and I'm excited. I've got Jeanette Farren from, or used to be from Diggity Doggy Daycare. So we'll talk a little bit about her story. I'd love to. Yeah, maybe that's a great way to start, Jeanette, if you can introduce yourself, tell us a little bit about your past business and what it did and who it serviced and we'll go from there.

It'd be an absolute pleasure. Hello, Dave and hello everyone, everybody out there. I started Diggity Doggy with my sister back in 2007. It was an absolute dream of mine to get out of the corporate office and get, get out there and really make a difference. And working with dogs, I mean, come on, it's living the dream, really. However, it was quickly slapped into reality, the business world getting into a fairly high stressful environment that I was not expecting. I was not expecting the chaos of what happened to my mind whilst in that, especially in the initial startup phase. What we offered was a service that we felt was missing back at that time that people were really starting to embrace pet ownership and there was less people, more people living on their own, more people following their dreams with their career and putting that, you know, as the forefront. Couples that were choosing not to have children and have pets instead. And then you've got. We had clients, an element of clients that were obviously normal every day, you know, two kids, two dogs, type of families as well. So we had a service that basically fulfilled the need for dogs to be able to be entertained, loved, cared for, supervised and being in an environment where there was. We had a lot of fun as well. A real sort of fun environment that just sort of broke up the day for pets.

You mentioned you started in 2007, so you're obviously running in that business for quite some time. And before we started, sort of crossed paths. What made you, like, how long had you been running it and what point did you kind of go, oh, either the passion was dying or what happened for you to go, I want to change, or thinking about exiting your business, did you get to a point where you thought, hey, we either need to run with this and take the next step and thinking about a separate site, or were you thinking, was the plan always to sell? And I'm just wondering about what the catalyst was, you know what?

Thinking back, we toed and froed with franchising for quite some time. We had some, some great clients who were owners of very large franchise businesses that were great mentors and wanted to actually help us to do that. They felt that our business model was definitely ripe and ready for duplication and. And we knew it too. We knew what we had was pretty special with what we created. However, there was an element of fear of taking the next step because of more chaos, more stress. The business wasn't systemised then, so therefore it was a very big unknown. And also probably up until that point, I'd say we'd spent 10 years in the small business mindset where you have to wear all the different hats and do everything yourself to make sure you saved money, because money was definitely not available to actually hire consultants and things. Every time you needed to do something, you just had to learn new things. So probably by the end of 10 years, you're starting to get a bit burnt out, ready for the change.

I'm trying to think of how we came across. I'm not sure if it was either through System Hub or Systemology or Kerry Bolton.

Or Kerry Bolton, our angel business consultant who.

Exit planner extraordinaire.

She is. She's unbelievable. And she actually referred me on to your seminar.

Yeah. So your first touch point was going through the systemology workshop. I think that was potentially the first or the second Systemology event we'd run. So that was like right back when I was kind of the genesis of the idea.

Yes. And it was, to me, it was because I have a financial background, very process driven. It just completely aligned with what I felt was the way the business had to go. And I had a lot of naysayers say, how are you going to systemise a dog daycare center? I mean, come on, you know, you can't, you know, it's like a circus really. So you've got unpredictability of dogs and. And you know what, it took a lot of time to actually sort of think outside the square with quite a few things. But essentially after that seminar I was really inspired to go, yes, we can actually systemize this business.

So you had thought, right, 10 years, it's maybe time that we exit engaged. Kerry is an exit planner. And then I know Kerry's a huge proponent of what we do and she always says, look, there's two things that oftentimes the person acquiring will value if you want to get top dollar, financial performance is a big one. And your systems. So then you identified, hey, I mean, you've always been very strong with the finance side of things. Like that's part of your background. And then you kind of realized, hang on, the systems is an area that we need to do some work in.

Yeah. Very much so. And I think that was certainly the change point for us. Starting to really extract a lot of the information out of the staff's minds. There was a lot of unknowns for me because I was very focused on the business structuring side of things. My role was probably more office based. So jumping into the operational seats helped me see a lot of processes that we were doing that probably weren't making a lot of financial sense. Probably we streamlined a lot with a lot of collaboration as well and you know, we got out of there, which I find I hear a lot with other business owners is that's the way we've always done it. Mode.

Yeah. How did you go with like the changing of the culture and. Or was that culture already there? Was it accepting with the team? I know sometimes some people have challenges when they say, oh you know, we're going to apply systemology, which really is systems thinking. It's a change in the way that the business thinks and it's about capturing what you're doing in thinking process. Did you have any challenges or resistance or as you kind of went through?

I think because we had, I think we probably had the toughest time with that because a lot of people embrace Diggity Doggy daycare as with a real emotional connection. So whether they're clients or staff, it's almost like the emotional buy in to Diggity was so huge. They felt they had a lot of ownership over the say of where the business was going because of that feeling they had about it. So when it came to systemizing the business or even calling it a business, it was almost like that was an insult to everybody. Like how can you call this place a business? It's so special. It's a home.

That's right.

We get so much good feeling out of this place. How can you make that about money? And it was almost like an education. I had to say that I love this business. This business came out of my head. This is exactly what I visualized for this business and the feeling that it gives to everybody who works here and visits here. However, at the back end, if we want this business to survive and be able to still spread that beautiful love and messages, this is the back end of how it's got to work. And it's got to work like a machine. And that's just the way it is. That's the reality of it.

How long did it take you once you kind of really got to work as far as the systemizing and bottling what you did? Because I mean it takes a long time to get product to market fit, get those runs on the board. I mean your business had grown to a certain level in that first 10 years. When it came to the bottling of what you were doing effectively, what sort of timeline did that take?

It actually took us 12 months. We were actually working in conjunction with the lovely Sue Campbell, a franchise consultant who came in and worked with us to actually get our business systemised for a franchise. So we started out with the, with the intention of obviously going through not only systemising it for duplication, but also systemising the current centre at South Melbourne. So South Melbourne was up to 80 dogs a day. So it was a very, very, very busy business, had up to 1500 customers on a regular basis. So there was a lot of procedures and processes that had to be put in place for this to even be thought about as a franchise model.

12 months is really not that long of a time frame, particularly thinking about what you are planning on doing with it as far as grooming it for sale. And I think that's a very realistic timeline for someone to think, hey, if we put some good attention on over a 12 month period, we can really just transform the business. Once you got to that point where you'd systemized a lot of it, had you noticed any changes? Like the business was already working. I know we talked about you spending less time on location there and started doing a lot more off site. But were there other things that you noticed or things that changed as you started to really systemize?

The biggest thing was probably getting the team buy in. Once that actually changed, it just meant the whole culture of the business started to run more like a machine instead of reactively. So I've always sort of been teaching the staff to be proactive rather than reactive. But you know, perhaps there was an element of impossibility there if the systems weren't, you know, very, very structured and very easy for them to be able to train from and also refer to when required. So once we'd gone through that process as a team, the difference between the diggity of old and the dignity of new of the new was unbelievable. Like every single client would come in and come in and just say, oh my God, this place is so calm. Everything just every, like there wasn't us sort of running around doing cartwheels or you know, and the dogs as well. It actually affected the animals as well. It was just a massive, massive reset to what I envisaged the business to be a lot more calm, less chaos and like I said, Getting that team buy in was crucial for us to actually get to that point together within.

The performance of the business. Did you see like, did it become more efficient as in, like more profitable?

Yes, absolutely. No, definitely. 25% increase in that.

Yeah.

And hence why we were able to pitch it to Pitstock, who were the ones that ended up purchasing and pictured it as a very viable business that was ready to experience even further growth as all the systems were in place to allow them to duplicate the business in different locations and also be able to easily do add on services without overwhelming the business's main source of income, which is the daycare. I think that's definitely another thing that, you know, once your business is organised and structured, you can really start to see the wood from the trees and what things you can start to have additional revenue streams that aren't going to, you know, overwhelm your staff.

I remember I've never been more excited when I've got an email from someone saying that they want to unsubscribe from System Hub. Because I got that message from you, like, oh, what's going on on? I can tell your team's in there. It was buzzing and being used. And then you said, oh, look, we've been acquired and the people buying it are taking all of the systems. And then, because obviously Petstock is a very large company, they've got all their own platforms and things like that and they basically just moved all of the System Hub systems that were created there straight into their platform when it came time to sell. Obviously System Systems run business and you got all the systems plus the financial performance, that sales process was that. I'm, I'm curious, were you like, was there a big handover period? Did you, like, how sort of involved were you? And then is it a case that they took over the team, the ip, the everything, you were involved and then there was a point where you're not. Because, I mean, for the person who's watched all the way through now, I know Jeanette is sitting in her camper van because for the last 12 months she's pretty much been traveling around Australia and just figuring out what her next moves are. And I think this is something that a lot of business owners never, ever achieve, that point where they exit from a business profitably. And Petstock was without a doubt your biggest customer ever. Like, they are the person, the person who buys your business is the point where you get the biggest payday and a lot of people just don't make it. So I suppose my question is, yeah, Maybe just a little bit about how that exit looked. And you know, what you're kind of thinking of working on now.

Okay, well, I think that exit could have been. Definitely could have been a lot shorter process because there still was a lot of development of systems and so forth that due diligence was happening. However, after going through the System Hub process, it also meant that I had a lot, probably about 75% information ready to send off to their corporate business team that would then obviously go through all the information there. So, and we're talking spreadsheets information for due diligence, huge amount. And it did take probably about a year and a half to actually get from start to finish. And once we got close, towards the end of the process, the handover was very easy and very smooth. And I was always going to step out because I wanted to travel and I wanted to sort of, you know, see life, life outside of business, poke my head above the water a bit. Because you do get consumed. It does become a large part of your life.

Well, you've been a huge inspiration. I know in the sort of Systemology world, you're considered royalty. As you've written the Systemology book and we talk about your story and I quite often reference it as inspiration for business owners that are working towards that. And I always say whether or not you sell or not is completely up to you and what you do, but at least you want to have the option because you don't know what's going to get thrown at you. And without a systemized business, you limit your options significantly.

You leave yourself highly vulnerable to things affecting yourself and your business at a much higher rate than what it could be. It could be a very minimal impact that you can have because life's always going to throw curveballs. So it really just sort of takes that vulnerability away, doesn't it?

Yeah. And I'd love to see the work that we can continue to do together. I know we talked about adding Systemology certification to your toolkit and I'd love to put your contact details. I think you will make the perfect systemologist as someone who has done it personally. So I'll grab your details, particularly once you get your business website up and running. And we'll put that right near this video as well. But a big thank you for all the inspiration and good work that you do, Jeanette.

Thank you very much. Right back at you, Sam.