How to SCALE Fast and Buy a Business with NO MONEY | Nick Bradley | The 2%

I was so out of kilter. My cup of ambition and perceived success was so full. But my cup of kind of helping anyone else other than myself was empty. And I realized that the only way that I'm going to feel any level of fulfillment is I need to then change everything. You know, you can have a seven figure lifestyle business if you're clever, if it's about having a decent income and then just traveling the world with your family, then just have a lifestyle business with eight people and automation scale up is a very different beast and therefore you have to have a bigger vision and you want to make maybe bigger impact to want to then take the journey and make that choice.

Hi everyone and welcome to another episode of the 2% where we have amazing conversations with peak performers from all walks of life. For what purpose? To help you decode excellence. To help you close that gap between your current and your best self. And today I'm super excited to have a friend of mine on the show named Nick Bradley. And welcome to the show. Nick. Great to have you.

Hey Eric. It's awesome man. I'm high energy. It's a Friday when we're recording this. Let's do it. Let's have some fun.

Now I know you're going to be explaining a little bit about yourself, but just to fill everyone in who's listening, I mean Nick is one of the most accomplished people that I know. You know, renowned entrepreneur, investor, author, speaker. I think you've exited now what, 24 businesses now?

24 businesses over a span of about 15 years.

It's a life dedicated to mergers and acquisitions pretty much.

And like total value, we're talking in the billions, right?

You know what I say it's about 5.2 billion. But there's a couple in there that I've forgotten to add.

There are some big ones in there. So in that 5.2 there are are three quite significant 10 figure as in over a billion dollar exits.

Yeah. So point being, if you're listening right now, you're going to really get a lot of value out of today because this is a conversation with someone who knows what it takes to scale a business has done it not just once, twice, but as you just heard, 24 times. And not for small change to the tune of 5 billion. And missing some numbers as Nick said as well. And mastery happens repetitiously over time through consistency and as nick just said, 15 years. And that's a good segue to another obvious passion of Nick's which is helping empowering business leaders and investors to really reach their full potential with their businesses. Nick also has a podcast of his own. The scaling up your business podcast has reached number one.

Number one in the UK, number 17 in the US and I think number six in the Ukraine or something.

Oh, yeah, we got to get the Ukraine in there.

Of course, 130 countries, but who's counting, Right?

So, yeah, really, really excited to have you here. And there's another element to Nick which is quite fascinating for me because if you've been listening to the show, you know that I'm obsessed with the intersection of peak performance, leadership and entrepreneurship. And Nick is a genuine peak performer. He's competed in 6,67 marathons, 24 ultra marathons. Is that right?

That's correct, yep.

Yeah. So, you know, this is somebody who doesn't just talk a game on the work front. He's lived it on the work front, he lives it on the health front. And last but not least, you're also a family man, right, Nick?

I am, yeah. I've got two young daughters who are now nine and six, Arabella and Matilda, a lovely wife, 12 year old Labrador, and a brand new, I think 12 week old Labrador. So the puppy. We've got the puppy. Yes, I know family and my values around that are probably my strongest. Why? And we can talk around those different things. Everything I do is around legacy and impact and inspiration and leaving.

The right standards for them and that's what drives a lot of what I do.

Yeah. So, yeah, I mean, quite frankly, such a perfect guest for this show, Nick, because one of the things that I always talk about with people is the need to realize our full potential by balancing three domains in particular and operating at our best on the health front, on the wealth front and on the relationship front. And yeah, really excited. Let's dive in because you're definitely overachieving on all dimensions and. Yeah, awesome. So let's bring it down now.

I'm happy, man. I've been down a lot. So.

Yeah.

That'S important because you weren't born this way, of course. Right. And you know, George Bernard Shaw, you know, we create ourselves and so you've created that, but I'm sure it hasn't been without struggle. So can you bring it back down to earth maybe for us and talk about how you started and maybe some of those kind of struggles that people can relate to. Early days.

Yeah, I'll talk about it in sort of themes if you like, because otherwise the podcast isn't that long.

Right.

But there are certain things that have happened at certain Stages which are like milestones or points of reflection. Now when I look at them, because they were bits where the way I describe it in my own mind certainly is. I came to the fork in the road and I had a choice of directions. And there's been at least three of those which have then defined a lot of what I've done. First one was when I was very young, so my dad left our family when I was two years of age. So just a marriage breakup, but that kind of put my mum into a spiral and she then got married a number of times after that and it was just a very unstable, difficult time. And of course when you're sort of seven or eight years, they say a lot of how you are now is formed through the environment you're in. And I remember, well, first thing first, I ate a lot, I put on a lot of weight. I just ate junk food like you wouldn't believe. No one really helped me with that. And I don't suggest that they necessarily should have, but I was pretty young and I didn't know and I just was eating lollies and ice creams and I ended up getting. I'm now 75kg. I was like 125kg as a nine year old, so 50 kilos more. So you know. I know, right. And there is obviously all of this links back into the running and all that. But what was fascinating about that is I got bullied really badly. I ended up in the hospital after a trip up to Queensland and no one was really around to give me any guidance and advice and I had to learn at first. I made the decision after that that I needed to lose the weight. I wasn't happy with myself, the bullying and all that. It was all to do with being this, the fattest kid in school. And I just started to study as literally a 10 year old how to do exercise more effectively, how to eat more effectively. I just went and got books in the library back then, so it wasn't the Internet. And I remember I lost all the weight and what was interesting about that is that was over about a two or three year period. So when I went into my teens.

I went from the sort of outcast fat kid to being quite athletic and representing my school in some pretty high level sports, rowing and basketball being the main ones. And then that took me into an interesting place. I became obsessed with physicality and the journey of transformation at that age also taught me about the link between the physical self and the mental self. And again, I look back now, I can See it at the time, you think you. How does a teenager even think like that? But I realized that I could change anything if I put my mind to it. And so I then started my first business in my late teens. So it was. It was a gym business, a fitness business. It was a personal training, Personal training studio in the late 80s in South Australia, where, let's be frank, you know, personal training, no one knew what that was then. I was like one of the first in Australia to do it and had a very successful business before I was 20, had three staff, was running private training in a studio outside of a gym. I was doing about 35, 40 hours a week. The business was turning over good money.

I thought everything was great. But this is the funny thing, sometimes you get ahead of yourself and then you sabotage it again. I didn't know this at the time, but as the business was getting successful, I remember that a lot of my programming from my family was entrepreneurship equals bad. It equals pain. You need to get a job. My grandfather was a very strong character, One of my most inspirational people in my life at the time. And he was like, get a job, get a job, get a job. For reasons I can explain. So I sabotaged this business that I started. I sold it for 3,000 Australian dollars, which is about the price of a Starbucks coffee these days. And I got in my car, literally, I packed my car up, I had this little Ford laser thing, and I just left. I ran away from my hometown. And two things happened there. One was I had to leave because if I stayed in their environment, I would have ended up a lot like my family. And they're great people, but they had less ambition than what I was starting to form.

And the other thing is I was embarrassed by what had happened with the business and how I kind of just literally killed it. And I thought I now need to go somewhere else and reinvent myself again. And you know what? I look back now, it's the best decision, hard decision, because I've never been back. I've been back to see family, but I never went back in the same way. But that was then the pathway into a whole range of other things. So I'll pause there because, you know, there's a lot in that tiny story, that sort of 10 to 15 year story that forms what happens next and.

Who I am today.

Yeah, And I'd love to go back, if you could, to the, you know, the bullying. Right. And the, you know, not being treated well by those around you.

Like how. How intense was that for you? And.

What do you think? What do you think gave you the power to actually, you know, have that agency, that sense of control to, okay, I'm going to do something about it. Was it, you know, a particular moment in your mind or, you know, was there like a turning point? But can you break that down a little bit more?

Yeah, there was, it was in, it was in the space of a number of months, but literally just a number of months. And I was in year four of school. So, you know, again I said I was probably about 8 or 9 when it was really hitting hard. 8, 9, 10, that sort of age. And I remember this is full on every, every recess time and every lunchtime at school, I would lock myself into the toilets, the boys toilets.

Sit there, jeez. And I did that for months. And it coincided with a transition where I'd left one school and went to a new school. And I went to that new school as the new boy and didn't know anyone there. And I went in sort of halfway through the year or sort of the last term. And so I was the new kid. I was the fattest kid, no friends, and locking myself in the toilet. So that was happening. And then we went on this trip up to Queensland, up to the Gold coast, and I was up there with my grandfather and my mom and you know, just, you know, some of some other family members. And I remember there was a pool, swimming pool, and there were some kids there a little bit older than me. They would have been not quite teenagers or maybe early teenagers, but I was, you know, three or four years younger. And they started teasing me and sort of for the first time I thought, I'm going to stand up to myself. And they called me from the pool around to this garden area where there was no one around and literally kicked the living out of me.

Wow, okay.

And I ended up in the hospital. But it was at that point after that I said, that's it, no help. No. I made a decision that that is it and that, that I didn't realize the power of the decision at that point. And. But after that I decided I'm not going to be the victim anymore. And that's probably what I was beforehand. I'm now going to do something about this.

Amazing. Thank you for sharing that.

It shows you how life is nonlinear.

You made a reference when you first started to speak about this, about there's choices we have in life and those are those non linear moments when we decide to go right when we could have gone left or vice versa. And it kind of relates to the whole 80, 20 principle. So 20% of our effort for 80% of the result, there's probably 20% of your life choices account for 80% of where you are in life. And I'd love to just do a segue now and apply that to totally different topic now. So scaling of a business. There's lots of things that you can focus on when scaling a business and I know you have a very comprehensive set of framework and tools and you're scaling up Business Academy, which is amazing. But if you were to 80, 20, even your own frameworks and tools, what are the 20% of things that a business should focus on? That from a scale point of view you think yield 80% of the results?

Yeah. And it's probably worth talking a little bit about some definitions for people here as well, because this is a belief I have and this hasn't necessarily come from me reading a book and then taking it. I think any business can go through a period of growth, but quite often you find, particularly in the journey from startup into a more of a scale up part of the entrepreneurial journey or the business journey, people don't understand how or why that's happening. Not to a level of what I would call precision that is required. And I start with that because people ask me and say, well, what's the difference between growth and scale? Because those two words used interchangeably without any real understanding. And I say, well, anyone can grow for a period of time, but when you're in a scale position, when you're in a scale part of the journey, it's a level of predictability that is absolutely understood. And the reason it's understood is because you have the right people in the right seats, the right processes, the right metrics. The business operates like a machine. So it's your question about what are the 20% to get to the 80%? Well, the first foundational point of that is understanding the drivers that are going to get you to the end game. The result of what you're trying to build, that's different for every business. But ultimately you've got to have the A and B to understand it. And then it's about being as efficient and effective in those choices in between those two points which are going to get you that result. Now, what most business people do, and we'll talk about identity because it's super critical, is they go from startup, they go into scale up, they think the person that they were at startup is the same person that's going to be successful in scale up. And there is a massive difference between the two, both in terms of mindset and skillset. So success, and I'll finish on this, success in that journey is very much first and foremost how the leader needs to evolve and appreciates what that is. And if they can get that quickly and make the transition, that tends to determine how successful business will be through that part.

Amazing, amazing. So some of the key highlights that I get from there is from an 80, 20 point of view is really acknowledging.

And doing something about what are the people required for the business, what are the systems, processes.

So people and systems say starts with the leader first. And this is something which will resonate perfectly with what you're about, Eric, because unless that bit works, the rest doesn't matter.

Yeah. And then on the leader bit, so you talked about two things in particular. So mindset and skillset to cross that chasm, say from founder to CEO.

What if somebody says, well, hang on, I don't want to subscribe to the need to go on that path. Just to clarify, does everyone even need to. Do you have to do that journey?

Of course not. No, no, no. It's funny when people come to me and this is a great, it's a great point, right? Because they go, now I want to scale. I want to scale. And the first thing I, you know, do you want to grow? Do you want to scale? Let's get not semantics, but let's just be clear. And then, then I say, are you sure? And then they kind of had this like, look of like, what? What do you mean? I'm here. You're the scale up guy and I'm here to scale. And now you're telling me or asking me whether I want to do it. And I said, yeah. And the reason is this. Reason is this. You're about to walk into the desert, right, with hardly any water, okay? And you're going to have to trudge through that desert. It's a little bit like an ultramarathon. And you know, and you have to be gritty, resilient, you're going to have your best day, worst day, on the same day, blah, blah, blah, all for what, right? And then that's where people go, well, I don't know. And this is the thing, right? You know, you can have a seven figure lifestyle business if you're clever, if it's about having a decent income and then just traveling the world with your family, then just have a lifestyle business with eight people and automation. Scale up is a very different beast and therefore you have to have a bigger vision and you want to make maybe bigger impact to want to then take the journey and make that choice.

Yeah, yeah, excellent point. And you're right, you know, this, this does come up in my work as well with, you know, with entrepreneurs and leaders. And.

When I'm having that similar discussion, I really open up the possibility that you actually don't need to do that journey with just one simple question. I ask in your mind, is Richard Branson successful? And everyone says unanimously, well, yeah. So you wouldn't mind having his success, would you? No, not at all. But yet he's never been the CEO of his businesses. He knows to step aside and put in that professional management. So I just wanted to clarify that for listeners because it's a real option. Right. And it's a successful option in the.

Area that I focus a lot of my time now, which is buying businesses and then building out an empire of multiple businesses. In terms of ownership, I'm not the owner operator of anything. I choose to get operational at certain points in time as you would as well, where your skill set fits a situation. Plus you might love it. But I'm an owner investor and to be an owner investor means I can still sit across the strategy like, this is where we're going, this is the choices we're going to make to get there. But I don't have to run the operation.

Yeah, exactly.

And to be honest, don't even put me there because I'm great at fixing things, I'm great at seeing the 30,000 foot view. But get me into the weeds and then something's going to probably break.

Yeah.

And you mentioned acquisition. That's definitely a subject I want to get into later because it's yet another way to grow and, or scale right through, through acquisition. Before we go there though. So let's just go back to the leader who does want to cross that chasm. He or she wants to go from founder to CEO and they do want to acquire the mindset and the skill set to do that. So starting with the mindset from your point of view and maybe if you have a story to illustrate either with yourself or with someone else. But yeah. What is the key thing that needs to happen 80, 20 wise within mindset.

Yeah, and I'll talk about my own personal story here because I think it's an important, I think it will help a few people actually. So I got to a pretty serious position in private equity. As I said, I was known as a guy who would go into companies that were failing and then I would turn them around on behalf of the investment firm. And I did that for a number of private equity firms in the UK and the us. It's a fun environment at first, it's very lucrative. The money you can make is just crazy. And, you know, as a kind of young guy mucking around the place, it was cool, right? But then after a while you start to see the dark side of that and it can become quite toxic. Firstly, it can become very addictive just because of the money and things like that, depending on what your values are. Secondly, you can get caught up in the culture which is still very much about power.

Winning at all costs. You know, it doesn't matter what decision you make, as long as there's another extra few zeros on the end of that decision.

So for me personally, that took me almost to a breakdown, pretty damn close physically, because I remember one night doing a deal, a lot of things that happened leading up to this deal. But I remember I went to bed one night and I woke up at three in the morning having cracked all the teeth in the right side of my jaw. And it was, even now, like, when I think about it, like it was, I didn't know what had happened. It was like, I've been punched, man. And I remember going to the dentist the next morning, the doctor first actually, and then the dentist, and yeah, she said, you just cracked all your teeth, you've gone to bed and there's been something happening, right? And I knew what that was. It was a buildup of a lot of stress and it's just culminated in this physical event. Serious, like. And so for me, it was a little bit like the fat kid locked in the, in the, in the toilet cubicle. I was like, whoa, that's it, right? You know, and then I had this epiphany of like, man, how have I been showing up for my family for the last few years? Because I haven't been present. I can't remember it.

So to your question, how did I change that? So I called up someone, friends who I had a lot of respect for, the success that they had, but not just the success that looked like from the outside, but they were just really happy and comfortable and balanced and just chilled out. And I was like, how do you do that? Because I wasn't like that.

And then I went on my own.

Exploration around thought patterns and beliefs. I ended up doing a lot of stuff with Tony Robbins. I went to a number of his events, I went to pretty much all of them.

But that journey of self discovery gave me the most Amazing gift, which was this, which was.

I was so out of kilter. My cup of ambition and perceived success was so full, but my cup of kind of helping anyone else other than myself was empty. So I look like this right off balance kind of scales. And I realized that the only way that I'm going to feel any level of fulfillment is I need to then change everything. So I ended up making a decision at that point to quit. Everything I'd done on private equity, the seven figure salary, everything. That's when I decided to do the podcast and that's when I decided to make a bigger difference in the world. Still have a great business, still help people, but do it on my terms in a way that's going to help that. So when I talk about mindset, I think you've got to long story, but I think it's interesting for people to understand it. You have to understand how your mind works, how your emotional state works, and sometimes you need some help to do that. Once you start to work out the things that are really important to you, that's when you need to start to think about the habits and routines which are going to enrich that, which lots of top performers, you know, have and I have and those sort of things. And I'm always working on that side of things. And as I work more on that side of things, the other stuff becomes significantly easier. And it's the same in business, in my opinion. And that's what I mentioned beforehand about the leader and why that's such a critical component of business.

Scale up.

And from, from a, from a mindset point of view, what are for you, what have been the key habits, like the keystone habits, you know, in your life.

Yeah, so. So mine aren't. This is quite interesting because they're, they're a little bit more elongated than the usual thing that people say, like, you know, I'm going to get up in the morning, I'm going to do this. I mean, I do meditate every day, but it's pretty brief and I'm exploring that avenue more. I'm starting to do some transcendental stuff for the first time. I've. I find it very difficult, which partly reminds me that I should do more of it.

So there's that for me running and that has been 100% my, my meditation state or the way of getting me like super clear. Quite often I'll sol problem I've got on a long run and I think the reason I started to get into these ultra marathons and things like that, I Mean, I still do a very long run on a Sunday, like as a religion, I'm out for hours and it's the best thing, right. It recharges my whole week. Like I come back, I'm better in every aspect of my life, so I've got that. And then the other thing that I found which has been really interesting is that I'm really into kind of things like it's called biohacking, but it's just understanding how different food, nutrients, hydration, all those sort of things affect how you then show up and perform. And when I was in the private equity world, it was lots of red wine and steak dinners.

You know, good fun.

Right.

And I still like have a glass of wine now and then. But like, you know, my, my eating is fixated on my energy levels and then that means that I can do more and be more. And so there's some of the things that I introduced once I went through this sort of second or third transition that I mentioned.

Yeah, very interesting what you said about problem solving and being in that flow state and perhaps accessing your highest level of creativity. Because in one sense, scaling or growing a business is nothing more than a series of lining up the problems to be fixed and then fixing them and the correct order. Right. Or in a directionally correct order.

Yeah.

And.

The. Yeah, I could just really relate to.

The whole thing about.

Right. For, for me, it's when I go for a walk. So I'll be on a long walk. And as a perfect example was, you know, thinking about the job specification the other day of you know, adding, you know, new potential member to the team. And it was started, it started with a blank sheet and then by the time the walk was done, because I had this little Google Doc on my phone as an idea came up, I added it as a bullet. I got back home and suddenly I had a page and a half role and responsibility bullets for this new description. So I think that's just a real gem for people listening to latch onto is that ask yourself what puts you in your flow state. How can you maybe double that up with something that is another positive habit somewhere, like with something else.

One thing I'll add to this because I went through when I started to be a little bit more aware and self aware over all of certain things, I started trying lots of different perceived performance habits that you read other people do. And then just because it's probably my nature of being a little bit obsessive about things, I thought, well, now to make it perfect, I need to do all of it. And I had this kind of list of like 25 habits and. And then of course it became a tick box exercise every day as opposed to the feeling. So now I only do three or four things. But the three or four things I'm very attuned to what they're providing. So it's how I feel after doing them. Not directly, but, you know, sometimes it culminates over time. But they're the things that give me the focus, the energy to be able to do the other stuff that I'm doing now.

Awesome. Fantastic. And then on the skillset side of things. So if you want to be scaling your business, what's the 8020 there? What's the 20% of things to focus on for an 80% benefit?

Yeah. So I mean, I love the way you're framing the 80 22. I think a lot of people don't think of it like that. I use a system which is again from Tony Robbins called rpm, which is the result first followed by the why you do it and then the action. Yeah. Because a lot of people, they focus on the things they're doing versus the results and actually you can get to the result by doing usually quite a lot less than the things you're doing. So my whole. I run everything through that thinking. So yeah. So to your question around scale up, you've got two main things or two main categories of scale up. You've got the organic side of things and you've got the strategic. And organic is what most people, if you do the 8020 thing, most people are spending 80% of their time on the organic and maybe 20% on the strategic when it should be the other way around. Now there are different stages of the business where that becomes more pertinent. But what I'm talking about here is a lot of people think, well, I've got to spend more money on marketing or I've got to hire the best salesperson I can or I've got to do these sort of things. I've got to spend lots of money on Facebook ads, whatever that is, that's organic. Right. That's you looking at one to one results. You know, I'm going to do this, I'm going to get this, I'm going to do this, I'm going to do that. That's how most people start their businesses. What you soon learn though is that that's quite expensive. It's takes quite a lot of time and the quickest way is to try and leverage, and I love the word leverage, so if you flip that on its head, strategic scale up is partnerships, joint ventures, acquisitions. It's the things that you can collaborate, resources, skillset, the things that you haven't got, you do it through a not a how, but a who. Okay.

And then you can kind of get exponential growth. So one of the people who mentored me, Jay Abraham, he talks about this in a very granular way. In fact, his referral System is like 93 different things you can do.

But the point of it is you don't have to do 93 things. But the point of it is any one of those things is going to get you more exponential growth than maybe being fixated on one marketing tactic, which is what a lot of people do. So I look at it like this. First and foremost, if you've got a business that's going through scale up, look at the strategic scale first and then look at the organic. So flip it on its head. Who's got the audience that I'm trying to get to? Is there a business down the road? Is my competitor not doing very well? Could I buy them? What would happen if I bought my competitor and they've got exactly the same number of customers as me? Wouldn't I just double my business overnight? You know, and. And this is the sort of thinking that people don't do, but if they could start to do that, they might get to the end game, whatever. The end game is quicker. And usually that's freedom, wealth, impact in some way. Then that's. That's the sort of thing I encourage people to start thinking just a little bit differently around.

Nice. And so if you had a. Put that into a newspaper headline in terms of, you know, the skill set, focus, what would it be?

Oh, God. You know, I used to work in magazines for years. I was always like, write the COVID line and then find the story.

Yeah.

Oh, God. Okay, testing. I want this to be really good. Now.

I'm giving you material for your marketing later.

Well, it is.

I often say, you know, something like, you know, why build your empire when you can buy it?

Okay, cool. Well, let's pull on that thread. So I know acquisition is something that you are particularly passionate about, especially right now. I don't think a lot of people really think in those terms. Right. They think, as you just said, organically, or if they do think strategically, they think, oh, my gosh. But acquire a business, that's something that the elite do. That's something that only a company that Warren Buffett has ownership does. You know? You know what I mean? Right. It's not something that the everyday person does. So can you debunk that for us and show us how we could be a little bit more confident about stepping into the acquisition space?

Yeah, I'll simplify it, but get a little bit of context. So I focus really on three things. Buying businesses, scaling them and then selling them. And the reason I focus on that is my highest value is freedom. And I'm all about trying to get to or get people and myself to the end result as efficiently as possible, which I think fits nicely with everything we've spoken about up to this. So one of the things that's interesting about acquisitions right now is that you've got the dimension. You've got two things going on at a macro level happening everywhere. You've got a huge transition in generational.

I'm going to talk about in terms.

Of the baby boomers leaving the workforce. So by 2030, all of the boomers, so to speak, will have reached 65 years of age. And for those who don't know what the boomers are, I'm sure most people have heard of it. It's basically the big birth rate increase that happened after the Second World War.

Where obviously all the men came back and there was lots of babies nine months later and there was a huge jump, if you like, in population levels. Now, as that generation reaches retirement age, there's a crazy number of entrepreneurs within that, as you would appreciate. And the stat at the moment is 10,000 people per day in the North America, in the United States, are retiring per day. That's right. And it's like, just think about that for a second. And there's another really interesting stat that in 2019, there were 2.3 million small businesses listed. Now, small businesses are defined as under 10 million in revenue. So that's still reasonably big, depending on people's aspirations. But there were 2 points. So there were 2.3 million were listed and only 1 in 12 sold. So that stats crazy.

Right?

And then you think, well, what happened to those businesses? Well, they got closed down. And they got closed down because a lot of people don't have succession plans. They don't have a natural place to. To hand the business over.

So the reason I say that is, if you think about the opportunity now, we're not talking about tech startups in Palo Alto. We're talking about profitable small businesses still generating in the millions of revenue and therefore in the hundreds of thousands, if not low millions in profit that are getting closed down. Right? Crazy. So the opportunity. There's two things Here there's two opportunities. You can be what I call a acquisitions entrepreneur. So you can enter the world of entrepreneurship instead of starting a business, but buying a profitable existing one. And you can use some very interesting financial mechanics so that you don't have to turn up on day one with a checkbook with hundreds of thousands or millions. I'm about to do a deal, so I'll share the numbers. I won't talk about the sector.

Small business.

So the business is doing 1.2 million at the moment in top line revenue, doing just around about 400k in net profit. Now I'm going to buy that business through some various things or hopefully buy it still in negotiation stage. The amount of capital that I'm putting into that deal is $35,000 of my money.

Amazing.

Now I'm paying for the business of just over 1, 1.1 million, but I'm only putting $35,000 in.

Wow.

So just to stop there for a second. So how am I doing that? Well, I'm using some asset finance against the assets in the business and then I'm doing something called seller financing, which means I'm going to pay the seller of that business back over three years, actually three and a half years on this deal from the profits of the business that I'm going to acquire. And people are probably going, what's he talking about? Think of it like you've got a house. If you buy a house, you've probably got a mortgage. You get to live in that house for sometimes 25, 30 years, still paying it off, but you get the enjoyment of that house exactly the same. I own the business, but I'm paying the seller off over three or four years. But I still own the business. I still get all the rest of the profit that's mine. And so that's the opportunity for people, whether you are, you know, you've got an existing business and you want to bolt other businesses to it, or whether you want to become an entrepreneur through acquisitions.

And to be clear for people listening that in that example, you weren't leveraging assets from your decade and a half of experience in other businesses or something. Everything was being done within that one transaction. Right.

So you.

And the only thing I will say is like, you know, I've done this for 15, 20 years, right. So I do have experience of it. But what's fascinating right now is people can do this. One thing I will say is like, it's better if you have at least some domain expertise in something. Let's say you're leaving the world of corporate and you've been in marketing for years. That's probably the best role actually. And you're thinking, well, I don't want to go and work for someone ever again. Again, the pandemic's hit, you know, what is job security going to be like now in the future? I now want to be an entrepreneur, but I don't want to start a business. If you buy, you know, a car wash in Texas or we looked at some landscaping businesses in West Palm beach, you can go in there. And a lot of these businesses haven't even got websites, Eric. I mean, it's crazy really, what's going on. And so you can go in there and get the deal done. So there's a little bit of you need to learn how to do that. But then if you apply your marketing expertise in the scale up part of that, you can add value to a business pretty damn quickly that's already profitable.

That's amazing. And in this situation where.

The business profits aren't there for whatever reason to then pay off the seller, what happens then?

So if something goes wrong, let's say, for example, you're not very good.

Then you give the business back, you have it as a debenture or something like that, so you can structure that into the deal. But if you go back to the very beginning, a lot of people get confused because they're thinking, well, hold on, that's still risky. Go back to my point that 1 in 12 businesses sell. The owner of the business was going to close it down anyway. They were going to asset strip, it'll do something. So them giving you a chance at a decent valuation and then getting the business back in if it doesn't work out, they're just in the same position. So why would they not entertain something which is more lucrative, particularly if you can convince them that you're a safe pair of hands, et cetera, et cetera, and you could even incentivize them with some bonuses. As you take the scale up, there's lots of different ways of, of convincing and influencing that decision on behalf of the owner.

And how much of your confidence in an acquisition like that would you say is linked to your general belief that you can successfully apply these scale up fundamentals and marketing basics to that business versus you feel like you're very much an expert in exactly what that business does?

Yeah, if someone's getting into this for the first time, I often say buy a business that you have some expertise in. And there's a number of reasons for that in the US right now there's a thing called SBA loans. Well, SB loans have been around for a while, but they've just done a massive incentive on when you start to pay back that loan. And if you structure it right, you can buy a business where you only have to put 10% of the price of the business in as your own collateral, but you might be able to leverage that out as well. So the reason I sort of say that is if you're looking at these sort of businesses.

There are many different ways of structuring it. So it's going to be advantageous for you.

Yeah, yeah, yeah.

The one thing in particular I like with your framework is your the six peaks of value creation. Right. Can you just take us through at a high level what those peaks are and maybe an example?

Yeah, I'll take you through. In summary, they are the way, when I was in private equity, they were the six categories or characteristics that we would look for when we were evaluating a business that was as valuable as it possibly could be. And this is how we would either look at a business that needed to be turned around. So that was my thing, as I said, or it was an investment that we were going to make. So the first one is focused around purpose. So clear strategic purpose, customer driven purpose, understanding why the business exists, where it's going. And you'd be surprised how it sounds like, of course every business knows that when you go through transition or you go through any struggles, quite often the founder back to leadership forgets that. And that getting to that clarity of purpose again can really ignite the rest of the business. That's the first thing to focus on. The second thing we look at is we look at the overall profit, but from the perspective of how profitable is the business now, how profitable can it be? Or does it have a pathway to profit? So some sort of tech businesses that are pre profit, they still need to, but they need to understand how they're going to create value by giving some form of shareholder return. So we look at that lens, then we look at the proposition. So the proposition being, do you understand who you're serving, you know, very, very clear idea of your target audience and do you understand the problem and do you have a remarkable solution which is still relevant to solving that problem? And the reason I say still relevant is because a lot of the world's so quick these days, particularly with digital and all sorts of other things going on, that sometimes that relevance can change within six to 12 months. As we've seen with the pandemic then we're getting into predictability. So how predictable is the sales and marketing engine? So do you have a predictable flow of the right customers driving some form of recurring revenue? Then we look at the quality of capability. So capability, organizational structure, culture and values. So it's all around the people component. And then the last one really is process. You know, are the processes, back to my point, around clockwork or running like a machine? Are they clearly defined across the core areas so that if I'm going to buy this business, I know that's just going to run really well?

Nice, nice. And if you. Okay, so let's take that framework and you have the luxury of choosing any company in the world that you could go in. And so obviously we're looking to see here, you pick a company. Yeah. So a company you think could scale better.

You'Re going to be given the keys. You tell us the company, you get the keys. And then where would you be focusing in terms of that framework to accelerate scale?

Oh, you know what's great about this question is I'm not going to say Apple or Amazon even though, Right. Because like, you know, I mean, they've run pretty damn well.

What I'm trying to think of.

Do you know what I probably would have bought.

Had I got in there early? Blockbuster.

Nice.

Because, you know, again, hindsight's a wonderful thing, but one of the things people don't know about me is I had the opportunity a long time ago to invest in Love Film, which was then sold to Amazon to be Amazon Prime. And I said no because I was an idiot. But that was like mail order DVDs.

And something like Blockbuster, I think is an interesting one because there was a point in time where you could have got that business for hardly anything and it still would have probably had a good enough brand at that point, point of time to be able to transition into what Netflix and things have become. So that's one I would have taken back. But now if I think about, if I look out into the world now, I'm always interested in, as I said, good, profitable businesses that are under leveraged, undervalued.

So it's never something that's probably, it's never something that you're going to just see. Like if I mentioned a brand that you're going to know about it, it's like literally I'm looking at, like I said before, chains of landscaping businesses in Florida. I'm looking for window cleaning and solar energy companies in California. I'm looking for brands like that that are Just generating cash like you wouldn't believe. The owner is distressed. In other words, they just want out. That's higher. They're 70, they've been there for 35 years. And I've got foundational pieces, fundamentals that I can then grow. So that's where I play. You'll never hear of the stuff I work on. But the reason is I'm also flying, going below where all the other investors, I'm playing where other private equity firms and things won't play because I want to group companies together. It's got a roll up and then I want to create something of scale and value that I can then sell into mid market private equity. And you can buy a business or a group of businesses for say three times profit, but I can sell them for six, eight, 10 times profit. And that's where you get significant scale around wealth creation.

Awesome, awesome. So somebody listening right now is saying to themselves, I have a business that I want to scale. We're going to fast forward and pretend that their business has failed in a year from now, their whole scale mission gone, done.

If you're a betting man, what would you say is the reason that they failed? What's the common reason?

Okay, there's normally three things and I'm going to keep going back to the main one. There is usually the founder or the leadership team has just run out of ideas and that often comes from a mindset issue. But it also comes from being from external to internal focus.

Right.

So every time I come into a failing business, there is usually we don't know what to do, we've got no idea what's going on and they're panicking. So it's an emotional state. So that's the first thing. Second thing is just bad cash management.

The pandemic's been a really interesting thing. There's been lots of people who have come to me and they're like, oh, Nick, we've only got weeks left. And I'm like, well, what was your Runway? We had six weeks of cash. And I'm like, I say have six months of cash, minimum three months of cash. That's the second thing, Right. And being really focused. When I look at systems in a business, I look at systems around attraction, I look at systems around conversion, I look at systems around operational areas or delivery. And then I look at the unit economics as a system. And that area is not usually a superpower of a lot of creative entrepreneurs. And then the third one is the point I made before about product market fit.

I can't get across enough that five years ago you might have had an idea and you would have years, like three or four years before that would start to have to be transitioned. You can come up with an idea that works right now, but in six months time it's not. So unless you've got the agility to be able to change. And that's where digital comes in so powerfully these days. Even if you've got service based businesses, you've got to be able to react much more quickly. So cash reaction, mindset, those areas are the things that are either going to bring a business down, but equally they're the same things that will bring a business up.

Nick, absolutely amazing. Really, really appreciate you joining today. If anybody who's listening, who's interested in scaling a business, if they want to learn more from you, how do they.

Do that so they can. I often say, Eric, that everything's in the podcast. Everything. So scale up your business is the podcast. And you know what? I just, just everything I've learned from years of doing this stuff, I just talk about it twice a week, two episodes a week. The first one's me just rambling. Second one's usually an amazing interview. So that's all cool, right? And then, yeah, they can reach out to me. Anyway, I'm on Clubhouse a lot as we talked about on stage. You can get me there. Or my business website is su y B global. So it's scaleupyourbusiness Global S u y B global. So go there and you can reach out and get in touch.

Awesome. That's Nick Bradley, everyone. Nick, thanks again. Really, really appreciate it. And yeah, thanks for, for being on the 2%.

No fantastic questions. I enjoy that immensely, Eric.

So thank you for having me.