Julie Wilkinson 00:03
Hi, I’m Judy Wilkinson, and I’m a chartered management accountant. And I’m excited to be launching the build and exit podcast. This podcast is for business owners and entrepreneurs who are looking to expand their business portfolio by acquisition, or at some point in the future, when to exit their business. We’re going to bring real life stories and experiences of people who have grown by acquisition, who have exited their businesses, and other areas of business such as funding and cash flows. So there’ll be lots of opportunity to learn different areas of business and how you can in the end, transition your business from a lifestyle to an asset to look forward to seeing you soon. Hi, and welcome to the build and exit Podcast. I’m Judy Wilkinson, your host and I own Wilkerson accounting solutions. I started the podcast off the back of the work we do it will concerns because we help buyers, we work with acquisition CFOs for buyers, and we help people exit planning their businesses. So I wanted to give some tips, real life examples of people who have actively worked in the industry. And I’m really excited to have Stephen Pettigrew here today. Hi, Steven.
Steven Pettigrew 01:07
Hi, Julie. How you doing? Yeah, good.
Julie Wilkinson 01:10
Thank you. So just reason I brought Stephen on. Stephen used to work for a business, who did some acquisitions, and has successfully transitioned to be what I would call an acquisition entrepreneur. He has successfully closed a business in January this year, which was worth 2 million. And he’s on track to complete another one. Well, maybe within the next month or so. Just under 5 million. So, you know, I think it’s really inspiring for people that want to get into this, you know, who are maybe employed and want to get into acquisitions to sort of see real life people who have done it. So first of all, I just want to hand over to you and you could tell a bit about yourself.
Steven Pettigrew 01:50
Yeah, thanks. Good introduction, Joy. So yeah, based in Scotland, I’ve been involved in business most of my life. So back in 2014, was my first taste of of mergers and acquisitions. The pharma business that was involved in we purchased that competitor at the time, and it was a distressed business, and learn a lot from that, because there was the stress, or the integration that was involved in that was very difficult. We inherited a lot of problems, a lot of a cash flow issues, etc. So it gives a gives a good insight into how it works. Fast forward. A few years later, I started my own business, which was in transport of no skill that to 80 people in the business, and managed to do my first acquisition for skill acquisition in January this year. And as you mentioned, that was a 2 million pound business, again, distressed, distressed deal. But really, what’s that, and then just was worth the squeeze, as they say. And yeah, sourcing a lot of deals got a lot of joint venture partners I’m working with at the moment. And as you mentioned, that one deal that should complete in September, and the leisure space, which has done over 5 million in revenue. And yeah, there’s a lot of other deals will be offered. And so hopefully fingers crossed, we’ll have a few more closed by the end of this year.
Julie Wilkinson 03:13
Yeah, no, it’s brilliant. So I mean, it’s really interesting that you actually started your own business as well. You grew to eight people. I mean, how what timeframe was that in how quick did you sort of grow the business?
Steven Pettigrew 03:29
Yeah, so that I suppose the thing that no one tells you when to start a business is it’s really hard and it’s painful, and it’s for four years started off in late 2019. It was a transport consultancy business to begin with. And we’ve started probably not the best time because not so long afterwards. COVID Everyone, so any kind of consultancy work that I was doing can dry it up. So I had to pivot that business and see an opportunity and the and the courier and district actually saw us in the online orders were going through the roof, you know, Amazon, FedEx DPD, all these types of companies were are doing so started with basically two violins and one of us clients and just grew from there. So yeah, it took about three years to get to that point, a lot of heartache a lot of a lot of Wellman and whatnot. And then the business that we acquired was was a competitor within the industry. So yeah, the good stuff was we managed to double in size overnight. Again to new clients. We weren’t we weren’t worth bad stuff was at was distressed. Still, there was some invoices and bills that we went I knew would be a problem, but to that extent, didn’t really understand until we were in the business. So yeah, that took me three years to get to that point.
Julie Wilkinson 04:50
So did you do a share sale? Did you do a full audit that asset purchase? How did you what the acquisition did you do? Yeah,
Steven Pettigrew 04:57
so Fulshear purchase of of the business. So the winner, basically was distressed himself. So not only is the business distressed or when I was distressed as well. So I suppose then district calls I normally don’t deal, I suppose that’s what it was. So little bit of money on day one from the, from the business that we acquired, and the less paid off over a period of time. But, yeah, you obviously found some, some skeletons in the closet after they came in, which was supposed to expect to be done with display by weight touch due diligence process, which was required because the business was distressed. So we had to come in and out pretty quick, but we’ve had domestically about putting some clauses on the on the shared agreement.
Julie Wilkinson 05:45
And do you think because Funnily, you’re actually the first guest we’ve had that’s done a distressed business, we’ve talked about distressed businesses, rather than this is the first one where we’ve talked about someone actually buying one. Do you think you would have been ready to do a distressed business if you hadn’t already had the platform of your own business?
Steven Pettigrew 06:04
Yes, 101. Counsel, probably no, because I suppose during the startup phase of modern business, you’ll learn a lot as you go. And I’ve been quite cute during that time, because I’ve always just leaned on coaches and mentors during that time. So I’ve learned things as I go. But yeah, just simple things like, you know, having a cash flow forecast, managing the creditors and and keep it on topic, those and I think, yeah, then have that experience before I’ve actually started a business. Obviously, I’ve seen what a distressed business looks like when we’ve done the acquisition back in 2014. But doing it on your own by yourself is a different matter. But yeah, it was, it was worth it in the end, because we managed to turn that around fairly quickly after we go on.
Julie Wilkinson 06:52
Yeah, well, I don’t think you really realise how incredible it is, you know, to build a business to 80 people anyway. And COVID is good. And then to do like distressed acquisition to successfully do is very good in quite a short space of time, especially as it sounds like you did quite quick DD. What was the relationship like on the activity? Was it quite a hard deal, like in terms of personally, because of how was the seller?
Steven Pettigrew 07:15
The seller was great. I’ve got to say, I’ve stole one speaking terms. So he’s no fully exited the business. But yeah, to give you an idea of how quick it was, got in contact with this guy on the, on the Friday, and by the Thursday, the following week. And we’ve done the deal, and that was all signed and sealed. And it was basically a four day kind of turnaround from from getting in touch with the seller. So yeah, there’s that kind of perfect match, nor is CPR fits. But you know, is this distress deal distress business or not just wanted, I just didn’t want to do it any longer. And so it kind of made that perfect storm. But I’d say I’ve learned through experience over the years that it doesn’t happen like that too often.
Julie Wilkinson 07:59
No. And had you planned an acquisition? So had you thought about it? Or did this one just come and then you sort of went for it?
Steven Pettigrew 08:07
Yeah, so I’ve been sourcing deals for around 12 months, and, you know, pretty much stay in the lane that I’ve been in before, which was transport and logistics. I’ve now started to branch out, say that, but I’ve had a lot of deals in the last 12 months that haven’t went through. So we’ve maybe agreed terms or we have got quite far down the road with a seller and maybe something’s happened. Something’s came up in due diligence, or was one example last year where we were a week away from signing the share purchase agreement, and the sellers changed their mind. So at the bid, one of the two sellers had changed the mind last minute. So yeah, that was a costly one for me, because we had spent a bit of money on due diligence with an accountancy firm and a lawyer from which, you know, it didn’t get back it was basically washed, because the deal didn’t go through. So that was a big learning curve at that time as well.
Julie Wilkinson 09:06
Which is interesting, because normally in heads of terms, you’d put a clause in said the seller pulls out they cover the costs. Did you have that in there?
Steven Pettigrew 09:13
Are we on that? Check afterwards? I should have known that beforehand. That’s why it may be That’s why I’ll speak to you in the next few ones. But yeah, yeah, it was that close that I discovered I should have put into the heads of terms but unfortunately that when I did
Julie Wilkinson 09:30
yeah, oh, well, we live in learn, don’t we? So? Yeah, so you’ve done the other one and that seems integrated. So this one coming up them? Is this a is this a branched out one or is this still in the industry?
Steven Pettigrew 09:47
Yes, branched out so this one’s in the leisure space. For a different set up, you know, not as many people seem kinda revenues, maybe better margins involved as well. Transport can be pretty tight margins, small mountains and transport industry. But yeah, that one should go through in September, and they’ve got around 14 staff. And, yeah, it’s been going, I think that business has been trading for over 50 years. So really long, established business. And there’s a few authors going under snow, which Yeah, we’re very hopeful these ones are more with some of my joint venture partners. So many people have got scholars that I wouldn’t have, will partner up and we’ll do them together. These are transport construction, recruitment. And it. So we’ve got five or six different offers. I mean, just know for those sorts of businesses, which some have been accepted, and some, some are still tuned over.
Julie Wilkinson 10:47
Yeah. And what is making you pick the industry? So you just do what you enjoy? Or is there a strategy behind them?
Steven Pettigrew 10:56
Yeah, there’s a strategy. Sometimes, sometimes, you know, they wonder what the strategy is. But yeah, so we’re looking for, ideally, a business that’s got some kind of second tier management already in place. So we are looking to upskill, the staff that’s already there, getting back training and more empowerment to run the business. And that’s a perfect acquisition, if I can get people that’s that said, in an ideal world, we’re always looking for something that’s profitable, that’s got decent trading history, you know, 10 plus years, an ideal world is perfect, and has got gross potential, no spoilers, the longer play is that we try and build a grip and each one of these industries and an exit that could have been a future but for no one looking for a good management team, profitable business, and has been trading for a decent amount of time. And you
Julie Wilkinson 11:49
mentioned that you’re going out looking for a managing director is that in your group now is that for the acquisitions?
Steven Pettigrew 11:55
We’re selling the acquisition we’re about to do in September. So the existing shareholders aren’t going to be exiting the business not straight away, there’ll be a transition period. But we’re looking for an industry expert within that Leisure Group than that leisure space that can run the business. And it allowed me to, to run the business from a strategic point of view, we might look for other acquisitions within that supply chain. So yeah, looking at competitors, customers, suppliers and see if we can do some further acquisitions to grow the grip. But yeah, we went up while ago that you need someone to run the day to day tell you to do the suppose the sexy stuff.
Julie Wilkinson 12:41
Yeah. And well met, who knows, maybe there’ll be listening and they might come out you might get we get? So yeah. So if you take it back to the beginning there, what made you start your own business in the first place?
Steven Pettigrew 12:53
I’m a terrible employee. I’m not a good employee. And I’m someone who wastes variety. So I like to be doing different things. I like to solve different problems. I do like helping people, I do get a bit actually feet if I’m not doing something different. One of my coaches a uses the phrase, shiny object syndrome. So I’ve been guilty of having that in the past, we’ll see something new, and I’ll go for it. So yeah, I wanted to start my business and businesses to have more freedom to solve problems. And yet to have some kind of purpose. And it’s been great since I’ve started, I wish I’d done it years beforehand.
Julie Wilkinson 13:34
Yeah. And do you think when you first started, do you think you’ve got the freedom? Or do you think you did you overwork a little bit at first or?
Steven Pettigrew 13:42
Yeah, that’s that’s the thing that probably don’t tell you when you start a business and it’s glamorised that it’s the champagne bottles on a yacht. But in reality, it’s it’s hard work isn’t so, but it pays off in the end. If you’re committed and you’re consistent, I think it pays off. FYI. If I was to go back in time, I would always worked in about quieter and existing business as opposed to start again round starting from scratch. Because as you have noted, Julie, you’ve got an existing customer base, cash flow straight away. Upscale opportunities, you’ve got leverage with the people that you can get access to that would be difficult to find other ways. And so yeah, I think if I was if I was to do it again, I would acquire a business rather than starting one but I suppose at the same time for the new entrepreneurs, you need to maybe start a startup to win and the first place maybe you like
Julie Wilkinson 14:43
Yeah, cuz I mean, yeah, well, because I sort of feel a little bit the same. If I was going to start again. I’d probably buy one because we’ve done it acquisitions as well. But I know what you mean, I think, I think if you could have if you’ve got cash and you can get a team of people around you to help All. And depending on what’s happening with the owners and the business you’re buying, I do think like newbies that haven’t started their business probably can buy one. But I think it’d be hard if you haven’t run a business and you haven’t got any real support. Because what did you do in your business, you get a management team in your own business, as well to help you or
Steven Pettigrew 15:20
eventually, yeah, and so, so the first kind of a year and a half, and I was because of a start up and everything, you know, effectively, I was having to run the business from behind the driver’s wheel of a vehicle. And so that was challenging in itself. But eventually you start to, you know, attract quality talent, you start to get some management structure in place. Again, I realised early on that I needed coaches and mentors. So I’ve always leaned on good coaches and mentors that are a little bit further ahead than me. That could provide systems that could give advice, etc. So yeah, I think probably in the last year and a half, the business is filled with systemized. So I don’t really spend too much time on those two businesses in particular, I probably spend five or 10 hours a week on them. So that’s pretty well systemized.
Julie Wilkinson 16:15
Yes, no, it sounds like you don’t really well, because I think you’d be surprised a lot of people don’t invest in the coaches and the mentors. And don’t systemize it because lots of people are 1050 years in and still working in it. Not there’s anything wrong with that, if that’s what you want. But I personally think a lot of people start the business for the freedom. And in the end, they don’t always get the freedom they want. But that’s because they haven’t put the processes in they, they get the clients, they just kind of like do, you know, quick growth, but don’t get the structure in place, and then just working all hours trying to do everything in the business.
Steven Pettigrew 16:47
I think you end up as a new entrepreneur, you’ve never been a test that you end up working more diverse for less money for quite a while. So
Julie Wilkinson 16:57
yeah, yeah, well, I know when I started, I mean, we pulled out quite quick race as well. And the one thing I always did was I said know quite a lot at the beginning, I outsourced and got people right from the beginning. Because even though technically, if I’ve done it, I would have had more cash because I wouldn’t be paying it out. I knew that it was like the lower level word that I shouldn’t be doing. And I think people spend my experiences, especially for the startups is they worry too much about what they’re spending, not what they’re saving. Because they worry about, oh, I’ve got a three inch or three 400 pounds out. But they’ll be making that money somewhere. Because that’s someone doing a job rather than thinking. They’ll be thinking, Oh, if I do it myself, I don’t have to pay it. It’s like, Yeah, but the time that they’re losing, not doing the score strategy things is because let’s face it, the owner day to day probably isn’t generated, like be day to day, I don’t really generate any income as such, because I don’t do too much of the doing. But obviously, my role is to make sure the business continues and the strategies continue in cash and do that leadership across the team. And I think that’s hard for a star business, because that doesn’t always generate money straightaway.
Steven Pettigrew 18:11
Yeah, and you don’t get taught and stuff in school, do you so you need to learn these things. As you go something’s one of my coaches told me early on that, you know, to try and outsource and delegate all the 10 pound an hour type jobs. And you know, as the business owner, you should be focused on income producing high income producing results. So that was a bit of a lightbulb moment for me. And I suppose that’s why eventually I got into into acquisitions, because the prize at the end once you do one is pretty significant. Although there’s a lot of hard work that goes into that.
Julie Wilkinson 18:46
Yeah, so Well, no, it sounds like you did well with it. And you’re excited for this new acquisition, then? Is there any cross skills? So if he’s in a different industry? Are you able to utilise any of his staff in the current one to do any of it like cross skin? Or is it completely separate?
Steven Pettigrew 19:01
There’s definitely some some stuff that could lead to some subtleties, in terms of some of the managers behalf potentially the key thing that can plug Andrew as someone with financial systems, and maybe that’s something we can talk about afterwards, delay. Financial, certainly we could look at the plug in and there’s I’ve got a really good lead generation sales person within the business who can Yeah, he could plug into that business very easily. And that could modernise it a lot. So it’s 50 years old, the shareholders are obviously, you know, at retirement age. So some of the stuff that have gone is maybe just been updated and refreshed in the websites, you know, just basic things. But yeah, there’s a lot of potential. What’s that? As a pretty interesting industry. I’d always say to watch at this stage, of course, but yeah, there’s definitely some. There’s definitely some there some subtleties within that for sure.
Julie Wilkinson 20:00
Yeah, well, it’s standard practice when you you’re like we because we do a lot a lot, I know we’re gonna speak afterwards about it. But when you do a group structure, the standard things will always be saying is, those people will be able to get some form of group benefit in terms of things like insurance and things like that. And then the bookkeeping becomes more complicated, because you’ll pay it out of one bank, but you might have to cross charge it between the two companies. So everything you do for one company, you then have to do for both companies, but then you have to do it at group. So you can and then like you say, the systems and reporting, and who is given the information in that reporting to make sure that you just get the information to make decisions? So yes, lots to do. And we could talk about that afterwards. I won’t bore everyone now. Yeah. So then outside, I know, you’ve mentioned to me as well, that you’re quite interested in doing a bit of coaching and things like that maybe in 24? What so what’s your vision? Are you still going to acquire businesses or you moving out doing something different?
Steven Pettigrew 20:59
No, still acquire for sure. So acquiring businesses building, building them up adding value, and then exit from those businesses, that’s going to be what I’m doing for sale the next 1015 years. And that will, that will be an ongoing thing for me and the team that I’ve got. But yeah, something else I’m working on at the moment is as a coaching mentoring solution for basically young entrepreneurs, you know, obviously, being being one myself and being through startup and speaking to a lot of business owners, frankly, in the last nice 12 months of different shapes and sizes, you know, different sized companies, a lot of them have the same issues. And they maybe don’t seek out coaching and mentoring from people, maybe enough. So I’m working on something that I can maybe a launch and trade 24 can help business owners to grow and scale their business. And I suppose with the acquisition piece that I’ve got, no I can, I can help them to acquire other businesses themselves, or potentially, you know, build their business to an exit and create an exit strategy for me. So that’s one of the goals that I’m working on towards the end of 2024 is a kind of additional service that I can provide to clients and, and entrepreneurs.
Julie Wilkinson 22:16
Pretty and wow, yeah, I think you’ve got a lot to offer to people having years. So that sounds perfect. Well, thanks so much for coming on. Yeah, definitely. Well, thanks for coming on. We’re coming towards the end of the podcast now. So thanks so much. Is there anything you’re looking for that you if anyone needs to reach out? And where can they find you?
Steven Pettigrew 22:37
Yeah, wait, 10 is probably the best for me. So yeah, I can share that. And maybe the show notes for something afterwards. But yeah, best place to get me is LinkedIn. And yeah, I can help business owners with growing their business solving problems within their business, exiting the business. And yeah, me and my team can either acquire part of the business or all the business if that’s what they’re looking to discuss. But yeah, just in general, happy to help people. As I say, coaching, mentoring stuff is something I’m working on. So just happy to help. And yes, a pleasure to be on the podcast join. And congratulations for getting over the downloads. 1000 downloads and good luck and Kilimanjaro as well.
Julie Wilkinson 23:21
Yeah. Oh, yeah. Cuz I climb Kilimanjaro, or this Sunday. So as you do, for my No, brilliant, no, we’ve actually. Yeah, no, we’re actually just Scott. I was looking. So we’ve just got over 1300 downloads now, which is amazing. So, and I’ve got some really good yes, as well. Yeah, thank you. And obviously, with my live TV interview on Saturday, I was interviewed on live TV as well. So um, yeah, it’s really taken off, which is great. So it’s a good platform to be on. So anyway, thanks for everybody listening. I hope you love the build exit podcast. As you just heard, we’re really expanded our reach internationally, and I’m doing a lot of I’m taking it overseas promotion. One of the things we are looking for if anyone is interested is we are starting to look for sponsors or people that want to advertise their brands for the build next podcast. So if anybody is interested, then you can find me on LinkedIn. I’m Judy Wilkerson, profits profit queen. But I hope you really enjoy the show. We’ve got loads of guests coming up. And I’ll see you again soon. So once again, thank you so much for taking the time to listen to our podcast. I hope you found it useful. If you did, there’s anyone else in your network that might benefit from our podcast and please share it with them even just click the link and send it to them or send it in a Facebook group or other social media channel. Don’t forget to subscribe. So other podcasts that come to you directly as a when we launch them, so I’m really looking forward to seeing you next time. We’ve got some really exciting things coming up. And we’ll see you again soon.