Buyers and Builders
00:17:35 · Brett Kelly
So what's that going to be? Well, we've got to have clients that want to make the world better. They want to make other people better off. They want to be people for others that keep their promises, play as part of a team. Basically, I'll find it for you. But we built an assistant. I'll just get you a copy of it. So I've been quite relieved. There's normally one in my office, but I've this little thing called Progress Pyramid. It's in my new book called Progress which will come out later this year for our twentieth anniversary and this pyramid basically has 12 parts of a business from mission, vision, value, strategy, structure all the way through people, process, clients, financial, IT, risk, brand, growth and succession. And I said, look, you get the person right first based on Maslow's hierarchy of needs and then in here you work out the 12 plans for a business. Below here is the foundation. Above here is operations. We built a system. And then what we did was we relentlessly applied that to accounting firms. There's two zero four steps. Everything's documented, manualized, there are videos to help you do everything better. And the idea was just systemize a business at a very, very deep level. And then it was as simple as go around Sydney and go to secondary markets and try and become large before anyone notices that you exist. So basically Sydney is here, everyone goes to the centre of the city, I went north, north west and we basically following Jack Welch GE, buy the number one or the number two firm in each area. We'd buy 51%, the partners that own 49%, we'll double their profits, take two thirds of the working reduce the working capital needs of the business by two thirds, give the past 25 to 40% of their time back, and then just do it over and over and over and over and again. And so that's what we did in Australia. We're now into Hong Kong, and we're into we're actually about to start our first operating business in Hong Kong. But we've had an office there for ten years. We're in The Philippines with a BPO business. And we're in Ireland, and we've got four offices here in The US. And the opportunity in terms of addressable market across Australia, The US, The UK, all of Europe, South America, we can basically go anywhere because we have a business system that can help our professional services firm be much better.
00:20:06 · Mikk, Brett Kelly
[00:20:06] S0: This is an excellent overview, Brett. [00:20:09] S1: But I can give you to [00:20:10] S0: you. I'm sure. I'm sure. When it comes to this manual, this pyramid, when you first got started, when it comes to the maybe first five, 10 acquisitions, how much of this had you already prepared? Or I'm sure you have improved that over time.
00:20:28 · Brett Kelly
[00:20:28] S1: So on the very first day of the business I wrote this book. I wrote this book as a training manual for our accountants to tell them how they should treat the clients. One of the things I love about Charlie Munger and Warren Buffett is Warren Buffett, when he's asked what he loves to do the most, he really loves to teach. He's a learner, I suspect, and I'm very much that. And so my real talent is learning and understanding and then putting things in a way that we can teach them to people and share them. And so I had this as the way we wanted to do business And I built what's called a critical activity network of the business that I had learned about in another book based on how IKEA had organized themselves. And I just basically sat down like an architect and designed what the workflow should look like, what the firm should look like, where people should sit, how the store should be laid out, what the SKU is. So I thought about how to retail accounting, You know, what does the office got to look like so people feel good or are attracted to working there and can work together in a seamless way? So talent led for the office. What are the workflows of the major pieces of work we do and how do we streamline them so that they can give efficiency and not be annoying to the staff like the team to participate in. And it was all about how do you make the human experience of our professionals better and how do we have a better outcome for the client. So I was an inveterate, still am an inveterate team for a on the system on the software on the process to try and make everything work better. If I come to your house you know and you ask me how you could let your bookshelf better I'll probably have an idea I I walk into businesses and I look at them and think how could they work better.
00:22:32 · Mikk, Brett Kelly
[00:22:32] S0: That's why great, you know... The companies you first approached outside of Sydney, how was their reaction when you first knocked on their door and said hi, introduced yourself? [00:22:43] S1: I wanted to check. Yeah. So one of the insights, Mikk, was firstly, I was organically growing the firm that I started in North Sydney like this. So they could see that I knew how to to to win business. So they were like this guy is serious about what he is doing. I had done a couple of acquisitions in the first nine months, my old boss and a guy up the road and then I went to areas that were unattractive to other people. So those firms were like, you really want to come to our area? I was like, absolutely. And they were like, okay, great. So there was less competition to get involved in those firms, to buy into those firms because other people didn't really want to buy those firms. But I did and they just wanted the money so they were like yeah I will take your money and then I had all these big ideas and they just treat you like you are crazy and that is okay because then they leave you alone and then you just do the implementation and then they're like, oh, this is great. This is better. No problem. So if upfront you try to explain too much then people will argue with you. I didn't explain. I just said, yeah, we'll make things better. Then people don't really argue with you. They just, they don't really believe you anyway. So why waste time arguing? [00:24:01] S0: I
00:24:01 · Mikk, Brett Kelly
[00:24:01] S0: I [00:24:02] S1: didn't really try to make the business case. I just said, look, we're really not open. And we work very hard. [00:24:08] S0: So... When it comes to the organic growth, winning business, what would you talk if you had... If you would have to give like a short presentation because I think that's... [00:24:20] S1: Oh, I just ask you, Mikk. I'd say, Mikk, do you have a great accountant? And most people would say, what's a great accountant? I don't think my guy's great. I go, what's his name? And they'd say, John. I'm like, okay. Well, you know, what a great accountant would do would be they'd give forward looking advice that was systemised at a fixed fee that'd be available to you twenty four hours a day six days a week and they'll change your life. Is that something that would be interesting to you? To which people would say yeah absolutely and then I would show them I'll show you here we have a system I'll just move my screen just there where we address in the people's personal business, wealth and estate. They get born, they go to business, they build wealth and they die. And then I've got a whole system which I will show you because it's secret that we roll out to the client. But I had thought about a system for the client that we give that to the client, sits in their study at home or in their office and it is cradle to grave and multi generational. I've never put even that on camera before. We have tons and tons of trade secrets that we don't share. Now we've digitized all that that's why I'm happy to show you.
00:24:20 · Brett Kelly, Mikk
[00:24:20] S1: Oh, I just ask you, Mikk. I'd say, Mikk, do you have a great accountant? And most people would say, what's a great accountant? I don't think my guy's great. I go, what's his name? And they'd say, John. I'm like, okay. Well, you know, what a great accountant would do would be they'd give forward looking advice that was systemised at a fixed fee that'd be available to you twenty four hours a day six days a week and they'll change your life. Is that something that would be interesting to you? To which people would say yeah absolutely and then I would show them I'll show you here we have a system I'll just move my screen just there where we address in the people's personal business, wealth and estate. They get born, they go to business, they build wealth and they die. And then I've got a whole system which I will show you because it's secret that we roll out to the client. But I had thought about a system for the client that we give that to the client, sits in their study at home or in their office and it is cradle to grave and multi generational. I've never put even that on camera before. We have tons and tons of trade secrets that we don't share. Now we've digitized all that that's why I'm happy to show you. [00:25:42] S0: This is remarkable. I've never seen a person so systematic man, honestly.