E207: M&A Masterclass: Building and Exiting Businesses in Health & Beauty with Tina Bradley

[00:00:00] Ronald Skelton: Hello and welcome to the How2Exit Podcast. Today I'm here with Tina Bradley and we're going to discuss all things mergers and acquisitions. Coming from across the pond there in the UK area, right. So, uh, yeah, so cool. Thank you for being here today. And why don't you tell everybody a little bit about yourself. So we can kind of get the audience, to get a feel for who you are and, uh, and we'll just start right there.

[00:00:21] Tina Bradley: Sure. Thanks for inviting me, Ronald. It's a real pleasure. So I guess, right back to the beginning, I'm kind of a typical entrepreneur. My first business was when I was age nine. And, um, I saw my father come out of the Royal Navy. He was in there for 23 years. And then he was looking for a side hustle.

So I saw him try these different kind of small businesses, fail, try again, fail, and so on. And I kind of got the business bug, from that age, from about the age of nine. And I set up my first little business, which was basically, I saw my mother and sister could bake really well, you know, do simple baking, and cooking for parties.

So I kind of wheeled them in and got them cooking and I, wrote out, hand wrote a load of leaflets. Put them out to the neighbors. And that was kind of a little business that I had at nine.Moving on, from then, I mean, I left school at 16, cause I was really, really keen to make my own money. So that's what I did.

And I got involved, multi level marketing and all sorts of different things like that. I actually went to university as a mature student, in 1997, um, just to prove that I could do it. But still very keen to, you know,I think I'm pretty much unemployable. I'm a typical entrepreneur.

And then from then, I, um, helped build, an animal charity, animal sanctuary. That's one of my passions, animals. And also, been involved in lots of different businesses, mainly online. I had about 200, different monetized websites at some stage. And then, some work, some didn't, some made money, some didn't.

Offline businesses as well, various ones. And then I got into, um, M&A about, four years ago, four, four and a half years ago now. And, game changer really for me.Not doing all this startup stuff and, and we all know kind of the growing pains and aches and all of that with that.

So that's what I started concentrating on was, was M&A and, I was looking to be agnostic, um, you know, kind of the first year. So I was getting to know my trade, um, finding out, you know, about, about how things worked and you look at lots and lots and lots of different kinds of businesses. And then I focused on,health and health and wellness. Well, hair, beauty, wellness, self care, that, that kind of industry.

And that's really where I sort of acquiring a kind of a group. So that's kind of brought you, I don't know if that's too quick, but that brought you right up to, you know, well, up to recently, and then obviously I exited that, that group. 

[00:02:40] Ronald Skelton: Awesome. Awesome. So, early entrepreneur. I think I'm in the same boat as you is, uh,I was, what I refer to jokingly kind of hustling as a kid. Selling anything I could find to sell and, bring in the erasers and stuff. I would go in town with the parents. We lived way out in the country, growing up, from fourth grade on.

But, uh, you know, I tried to go work with my father who was a entrepreneur, uh, painting houses and doing remodels. Told me I was too young. So when he would go to work, I would take the push more and we live five miles from town. I would take the push more and just walk it into town and go door to door and see if people let me mow their lawn.

So I, I worked with him for years. But yeah, it's, a lot of entrepreneurs are one of two things. Either accidental entrepreneurs, meaning that they were an employee, they were doing something on the side, it started taking off and they started doing it full time. Or you're just natural born entrepreneur and you can't do much else, right?

I've had W2 jobs. They usually last a year or two before I tell the CEO what I think.

[00:03:38] Tina Bradley: We are unemployable completely.

[00:03:41] Ronald Skelton: It's both a blessing and a curse. I still have the startup bug occasionally. There's still certain, certain things. If I can't find it to buy it up, my goal is, or my desire is to build it. You still find that occasionally? Where you're like, man, it's just, there's not one in the market. I should probably just go start this thing.

[00:03:57] Tina Bradley: Yeah, tempted. I mean, you know, I've set up a consultancy now, so you could call that a startup, I guess. It's got all the same, you know, processes of the website, building up and building your brand and all that kind of stuff. So, yeah, I guess I am doing it again. Yeah. 

[00:04:11] Ronald Skelton: My wife wanted me to buy her a particular type of business. She's in the food trade and there's just not one around here. It's like, Hey, it's not that expensive. It seems to be a pretty profitable market space. It's in the food truck type of scenario. But I was like, let's just, if you really want to do it, run the numbers, show me the numbers and we'll, we'll just build it.

[00:04:28] Tina Bradley: And, uh, so we're, now I'm in another build, build a startup type of thing. Just cause there's none for sale in that space she wants to be in. There is a certain amount of excitement though. When you start something, you know, brand new, there is, you know, kind of excitement to it.

[00:04:43] Ronald Skelton: As an investor, you and I are both been around long enough to know that as an investor, you're supposed to be seeking out what's called asymmetrical risk, right? Where the reward is way worth more than the risk. And if you really look at the statistical numbers behind starting businesses, it's not asymmetrical as you would probably need as a normal investor.

You have to be pretty risk inclined. If you're realistic problem is most entrepreneurs aren't realistic. They don't want to look at the long term statistics. They always think they're the chosen one that can, to do that, to do that repeat, you know, one in a thousand win.

So let's talk about like, you got into this space four years ago. You made some acquisitions. What did those look like? Cause we're going to lead up to your exit in those. What did the acquisitions look like? What type of deals were they?

[00:05:29] Tina Bradley: Okay. So, um, I focus, as I said, I kind of was agnostic and then, um, I thought, this isn't working for me. I'm, I'm kind of all over the place. So I saw that, there were a lot of hair and beauty salons that were available and, pretty cheap. And I thought, you know, instead of looking for, kind of the deals that makinga million in EBITDA and whatever. Why don't I just acquire lots of little, hair and beauty salons, you know, kind of the turnover of about half a million. And then just build up, kind of a group of those.The thought behind it was, you know, wait, five or six years, build up about 20 and then exit either through private equity or something like that.

So, that's what I started to do. I was started looking at the hair and beauty sector, in and around London. I wouldn't go further than, I live in central London, very, very central. Oxford Street is literally one minute walk from me. I don't know if you're familiar with London, but that is pretty central.

And, um, you can't keep a car here, they make it impossible. So, I wouldn't, you know, I wasn't looking at anything more than an hour from central London on the train. So I could jump on the train, within an hour I'd be where, wherever.So yeah, I started looking at these businesses and everybody tells you not to go near brokers and I completely agree.

The big brokers are an absolute nightmare. In my experience, it's just kids that they, they employ that have just come out of university. They give them a job. They know nothing about business. They're just teaching them to, you know, sell, sell, sell, sell.And get, you know, money up front for these poor businesses that really do want to sell and they're in bad hands.

Um, so I dealt with small, small, business brokers and I built up rapport with them as well as the sellers. So, I wanted deals that were all deferred. Deferred payments. And so I managed, you know, persuade the brokers that, that was a, you know, a thing. And they actually persuade, well, at least one of them persuaded, one of the, the sellers to actually go with me rather than someone else. So that was a win.

[00:07:26] Ronald Skelton: That's interesting. I haven't looked at the hair and beauty space. I have kind of started looking into, the nail salons because they're just cash cows. I like big profit margin companies and I jokingly say just because, just in case I'm not as great as an operator as I think I am. The higher the profit margin, the higher the error margin.

So you can make a few mistakes that doesn't hurt the business too bad. It's kind of a joke, but it's kind of true. But, what a hair salons look like? Talk about the hair salon. Are they high profit margins? Were you in the chair rental business? Cause I was in the real estate space and I almost bought two hair salons, but not because I knew anything about hair.

It's because I seen them. They were renting booths is what they were. It was a big facility. They had a brand, a lady that worked there answering phones, but the majority of their money was made from booth rental, right? They were charging X number of a hundred dollars per chair.

[00:08:16] Tina Bradley: Yeah. I mean that's really big in the US. It does fund here. But not, it's not as big. And I'm finding that because I really immerse myself in the industry. Um, you know, kind of social media groups, getting to know other salon owners, that kind of thing. And, yeah, I, I'm finding that salon owners are starting to move back to the traditional, we call it PA-, what, PAYE. 

I don't know what you call it in the States, but you know, you're on, on the payroll, you know, pay taxes, dah, dah, dah, you're not self employed. So I'm finding that they're going back there. So we did just a PAYE model the whole time. I think what's happening here with the, with the chair rental is that,people, they can't, you can't build up, your brand because you and these people can move around, whenever they want to, it's not very stable.

You don't earn as much from, from them. Obviously you don't have to pay their taxes, but what's happening in the UK is, they're really stamping down on these kind of small little businesses within a business. And quite a few have been hit. Few businesses have been hit by, by the tax office. And saying, well, actually that person was employed by you because they were in there for so many hours. They didn't just walk in and out whenever they wanted to. You know, you have this agreement that they, so therefore they are employed.

And now that they are charging people, businesses, all the tax that they should have paid for this employee. So people are getting a bit, you know, creeped out by it, scared by it, and, quite rightly and, um, and staying away from that model.

[00:09:44] Ronald Skelton: It's interesting. I met a guy in Tulsa of all places, which is a central in United States. he would, he had acquired six,you know, what they call quick cuts or whatever. They're haircut places, but it's both unisex. Both men and women come in. So they do like, they don't do a lot of the beauty style, like, deep perms and stuff.

It's basically, wash and trim is probably the category I would look at. So they're, they basically, they get you in and out fast as kind of their, it's like super cuts and some of these other name brands, but he'd bought six of them. And he was doing really well with them. And I was curious, and he wasn't in the booth rental business.

That's the one thing I, you know, I thought he was an outlier because, all the people cutting in his places, they had benefits and they had W 2 jobs and that's the reason they were there. They just, were tired of renting a booth and trying to figure it out on their own. So, that's an interesting model. Is the profit margin on a hair salon pretty decent or? 

[00:10:36] Tina Bradley: It's 20, it should be 20%. When I took over these, these, uh, um, salons, it wasn't. So we made sure we brought it up to 20%. The problem with these salons is, you know, they're very fragmented, obviously. There's lots of owner operators there. So I didn't look at owner operator businesses.

I just looked at, um, businesses that actually have managers already in. Because usually when you lose the owner operator, you use a massive amount of, you know, all the clients and everything else. So kind of that's, that's, so that narrowed down the field. But you know, when the owner left, because that's obviously what they want to do, they didn't take a huge chunk of business with them.

[00:11:11] Ronald Skelton: It's interesting is, I did the marketing plan for a young lady who had a hair salon business and helped her get a new loan to expand into a new location. I was a marketing coach back then, doing business, business coaching and marketing coaching. So I helped her do her marketing plan and her business plan to get a new loan, get her moved.

She did sell, she exited it. Two years or so, she got sued by the previous owner. I won't say her name here just because I do like her and I don't want to bring any dirt into our world. She got sued by the previous owner because the owner said that some of her clients were coming, still going to her to get stuff done. And that she had a non compete.

And I started thinking about that. I know my wife and a lot of other people are really loyal to the person that cuts their hair. And they go wherever that person goes, well, it don't matter what salon they move to.

[00:11:57] Tina Bradley: Yeah. Yeah. I mean, we have,sort of contracts in place, where if somebody leaves, you know, they're not allowed to. I mean, if, if the client wants to go with them, I mean, you know, they've all got Instagram these days. I can easily follow them. But actually reaching out and trying to, take the customer with them, that we have in the contract that, they're not allowed to do that. 

I mean, at the end of the day, the business is, paying for, you know, the rent and the, all the other expenses.And for hairdressers, you know, kind of just, take them away home, you know, some, some work from home and so on, it's, I don't know, it's a very kind of unfair business in that respect, I think. I can understand both sides, but it's, yeah, it is an issue.

[00:12:35] Ronald Skelton: She'll let somebody do the trim, right? They take the split ends off the ends. But, so I'm curious, I'm always curious about industries where, there's extreme loyal to the skillset of the operator and or the employees. And hair salons is definitely one of those. I cut my own hair. I've got lazy.

I've got hair right now. Usually I'm shaved. Just got lazy and haven't cut my, clip my head this week. But prior to that, I don't ever remember, I'm prior military too. Like, I just walked in the, wherever the barber was, I said, cut it shorter. But I know that it's not the same with most other people. Anybody with vanity and most, and anybody with some sense of vanity, cause I do not apparently have that.

And most women, right? Most female, really, we put so much stock in that. I'm curious. I'm so curious about how do you deal with industries like the hair salons or something where the loyalty may not be with the brand or with the company, or even sometimes the owner. 

What do you, I, I'm always curious in this space, I get what they're doing and it's a brilliant business, but how do you deal with that? How do you deal with like the customers always wanting to go where the, uh, employees are?

[00:13:47] Tina Bradley: Well, you know,I was lucky in the respect that the businesses that I acquired, without, all of them, actually, all of the, um, girls have been there like, 15, 16, 20 years. So what obviously, they build up, it's like a family. And the thought of moving from that, is pretty horrendous for them.

So you, you know, you just make sure, obviously they're paid well. You know, we always pay them a basic plus commission,perks and all this kind of stuff. So you just make, make sure that they're very happy where they are, that they're amongst family, if you like, but, you know, and the thought of leaving that family is, is, just awful to them. They just wouldn't even consider it.

[00:14:24] Ronald Skelton: So what I'm hearing is the culture is critical inside of that small environment. It's kind of like a micro environment inside of a bigger business because you're buying multiple locations and each one of them is going to have their own family vibe. You're not going to try to merge cultures in that scenario because, you would be ruining what really makes those individual locations unique to them.

[00:14:46] Tina Bradley: Absolutely. This is why people, you're finding that this rent, you know, we call it chair rental rather than booth rental. Chair rental is not working because, you're not building up that culture within the small salon. It's, you're always going to be having transient people just moving around all the time because you're not building up that, that culture.

[00:15:05] Ronald Skelton: I'm surprised that I learned, I used to have a real estate business and one of my, I used to owner finance most of my houses off. And, one of the guys trying to buy one of the houses was a barber in our town, a Hispanic barber. And I'm like, there's just no way you can qualify for a, a 15 year note with me.

I don't think you'll make enough money. And he's like, well, I make six figures and this is Tulsa, Tulsa, Oklahoma. I'm like, you're not making six figures cutting hair. He's like, yeah. I work in a high end salon. We charge $40 a cut. I get to keep 80 percent of it. 20 percent goes to the chair until I pay a certain amount and then I get more, right.

They had a system there.Or I can switch over to chair rent. And I was like, I went over and got my hair cut there, like, I had them trim my beard and stuff and, like, it still was, still was shaved at the time. And I seen it, I watched that store and it was busy and people lined up. I was the only guy there that could not speak fluent Spanish, but I just wanted to see the environment. And they were, there was, I asked the owner there, I said, because I'm, like I said, insanely curious.

What is, what does the average barber here make? Because if they can't bring enough clients to do 70 to $80,000 a year, they can't have their chair anymore. We're a high end location. We do excellent work and people expect that and they line up to come here. So I could see that these could be a little profitable business.

I never thought about how profitable cutting hair can be. But I, I see it on the women's side, right? Cause it's $300 to get your hair, hair dyed. But,

[00:16:27] Tina Bradley: When you do aesthetics as well, when you get an aesthetics doctor or nurse in there, then, we're talking about, you know, the Botox and the lip fillers and all that kind of stuff. Then, you know, visit is like about 500 pounds, boom, boom, boom, 10 minutes. So yeah, that's, that's really

[00:16:42] Ronald Skelton: Beauty spa treatments and stuff too then. I had another gentleman friend of mine, he, he sold it, but he was in the medical spa business and, he drove the nicest Jag I'd seen in a while, so he had to be doing all right.

[00:16:53] Tina Bradley: Very, very profitable business. I mean, in the UK, I mean, London, I can walk to, gosh, I live near Harley street, so, um, I mean, there's hundreds. It's very, very, competitive, but I think that's gonna go down soon because again, the government's stepping in and they're gonna stop people, NVQ is kind of like a qualification in the UK.

Non-vocational qualification, it's called. And at the moment, you know, they're letting people, with just a, a couple of years experience, just go and inject people in the face, which is, it's going horribly wrong. So I think they're going to change that. And it's just going to be doctors and nurses, which is a good thing.

And so that's going to reduce the competition, but that's, that's definitely an industry to, to look towards for anybody interested in that sector. Absolutely.

[00:17:35] Ronald Skelton: I'm pretty sure here in the United States for the medical spouse, they are medical staff. Either RN or, medic. Like, I know, I know a guy that called me up and said he might sell me his IV, a mobile IV bar. And if you know what that is, they do bring in IVs that have vitamin B12 and all that. And the reason it was expensive is, here nurses are hard to come by. 

There's a lot of traveling nervous nurses jobs here that pay extremely well. 90 bucks an hour or more. And that's pretty much who is the only person that's allowed to place RV, you know, the IVs. You have to have a,at least one, I think he had to have one RN on staff and the rest of them could be, techs of some sort.

But, yeah, it gets really expensive real fast here because you have to have medical licenses to do injections here

[00:18:22] Tina Bradley: Yes. It's going that way here. Definitely.

[00:18:25] Ronald Skelton: And maybe it should. What do you do with it? So,I love the idea of the nail salons just because, the funny thing was, the reason I got interested in nail salons is I like to play a little poker occasionally. And one of the guys that used to donate to me all the time, bringing cash left and right, he owned three nail salons.

It's like, and he lost a lot of money playing poker. So I'm like, always wondering what the hell does this guy do? And where's he coming up with all this cash? And, turns out he owns a nail salon. Then I started looking at a few of them and the problem with the nail salon side anyway, is it's mostly a cash business. And, it's hard to find one with clean books and clean taxes, and I don't want to induce any more problems into my life than I already have.

So I have, I had to stay with that. Did you, did you see a little bit out in the hair salon when you're evaluating these companies is they say, well, here's what's on the books. And then they try to tell you it makes a lot more money over here that doesn't make the books.

[00:19:16] Tina Bradley: Yeah, absolutely. I mean, we, you know, within the salons, we had a beautician, who did nails, massages, facials, pedicures. But I did look at nail and, you know, I was interested in anything in the health, sorry, the wellness and self care business. So, I looked at quite a few nail bars and yeah, yeah, there is a cash thing.

I think that's going to change because they're gradually getting rid of cash. But,I would just say to them, look, you know, this is what's on the books. If I went to a bank tomorrow, they would not lend me any money based on what you're telling me here. I'm sure it's absolutely true, but you know, that you can't have it both ways.

You can't, you know, have all this cash, not pay tax on it. And then expect, when you sell your business to get the full amount. So that was kind of my, I didn't get those businesses, but you know, that, that was, you know, my kind of offering to them.

[00:20:04] Ronald Skelton: So I'm really, really against getting what getting away from cash and the real reason is, is the only person that's truly paid pushing that are governments and banks. And the reason and the banks are motivating the governments to push it. If I give, if I pay you in cash and I hand you $100 bill for your services and you go, it's still $100. And when you go, pay the guy at the market for his, farm fresh, fruits and vegetables he grew for you and you hand him a hundred dollars, it's still a hundred dollars. Now, when he goes by his kids clothes and he spends a hundred dollars, it's still a hundred dollars. I come to you and I pay you on my credit card, and I gave you a hundred dollars, you lose 1.5 to 3 percent of that. So you get $97, right?

And then he, you, you go in by the fruit and, give him a hundred bucks. Now you came out of pocket for $3 cause you had, you know, still. And he still only gets $97. The only people that truly make money by getting away with not doing cash anymore are the banks and the credit card processing banks and the government for control.

Cause at that point there is no more side gigs, side hustles and money that's not paid taxes on. Which is not a bad thing. We should all pay our fair due. But that said, and then we argue, you know, if we don't like what we pay, we should elect different officials to make that work better. 

But that said, I'm not a fan of that whatsoever. I think it's a, it's a bad idea just because it devalues money so fast in the transaction. If you look at the normal lifespan of how a dollar travels, it only takes, I think, six or seven hops before it becomes insignificant. As to the, the value of the dollar.

[00:21:47] Tina Bradley: Yeah, no, I completely agree. And also, you know, the control thing.The thought of going kind of nearer, I suppose the lockdown thing, COVID thing, kind of shook me up a bit. The fact that, governments could literally just close down your money supply is terrifying. And then you go to the Chinese social system or whatever.

No, I don't, I agree with you. I don't think it's, it's a great way, but you know, it seems to be, people want convenience these days. That's what they want. They just want to carry a card away and they don't want to get cash at the cash point. So, you know, it's, it's very difficult. I think there are some folks here that are fighting against, going cashless, which is a good thing. But no, I completely agree. Ronald, it's, it's not a good, great idea.

[00:22:25] Ronald Skelton: You know, if the only way it would work in the long run is if it's decentralized. Some form of cryptoversion. Not the current ones. There's so much corruption that has to be regulated, but some decentralized monetary system, but you still, everybody that touches it's going to want to fee on it.

So I don't know how it doesn't, um, you know, if you look at it logically and say, yeah, in the real world that happens too, because if I pay you $100, you pay taxes on that, but you also probably save some of it. You don't usually spend a full 100 if you're a good steward of money. So it does take some money out of circulation.

And that's the argument that I've heard from people when I give them the argument of the devaluing of the dollar when you use credit cards. And he's like, well, typically if everybody was behaving correctly, that dollar wouldn't travel that far either, right? That said, there is this industry and a lot of industries that are cash laden, where they're just really a cash business here.

They're so cash ridden here that they're actually often audited more often because they're often used for things like money laundering and stuff.

[00:23:28] Tina Bradley: Yeah. Yeah. Yeah. I'm surprised they're not more often, there is a theory that there's a thing called Turkish bar, barbers. We've got a long, a lot like you do in the states, a lot of immigration, uh, coming in. And all of these little Turkish barbers of, have sprung up and they're always empty. And the, you know, theory is, you know, there's a money laundering operation.

And it, it's funny, but, the police and the the, um, HMRC, that's the tax office, never seem to investigate them. It's very strange. But we all kind of, what's going on with these places? They're always empty. They can't be making money. So,

[00:24:02] Ronald Skelton: Let's go into, see, you, you acquired multiple, right? Three, four or five of these.

And then at some point you decided to go ahead and take the exit. What was the, did they reach where you wanted them to go and that's why you exited? Or what, what was the catalyst to saying, okay, I think it's time to sell now. 

[00:24:19] Tina Bradley: I was looking, I was hearing people doing consulting for equity and I, I kind of, I, I, I discovered, I don't mind operations if I've built the business myself. But what I really didn't enjoy was, operations of businesses that have acquired. I really don't enjoy that, that side of it.

And I suppose if I carried on and built it a bit more, I could have got an operations director in all that kind of stuff, but you know, a typical entrepreneur, you know, a few years down the line, I'm thinking, I think in this consulting for equity thing would be a good idea for me. I'm thinking of kind of being a nomad.

And traveling around, with my little dog, um, different places. So it just kind of, when you get a feeling, you think this, this is probably the right time.

[00:25:04] Ronald Skelton: Do you know, I was going to say, you know I am a, I'm a digital nomad, right?

[00:25:09] Tina Bradley: You, no I didn't, I didn't.

[00:25:11] Ronald Skelton: So this is a, this is a portable studio. This is a 10 foot by 10 foot of studio that I soundproofed an old shipping container. A, It's pretty new. So it's got a door and a window and the big shipping container doors open on one side, but it was cut at 10 feet and the wall was shortened.

And then I have three inches of foam insulation. Our house is a triple axle, 30 foot tiny home with you know two lofts and a,and a day bed.They're where my, is 320, 340 square foot, something like that, to where my 13 year old son, my eight year old daughter, my wife and I all live in there.

So, but, and we've moved around. We've been in Texas, around Lake LaVaughn in Dallas. We moved back to Oklahoma where in COVID. We started in Oklahoma. So we went Oklahoma, Texas back to Oklahoma. And now we're out here in California in the Redwood forest, but we can, you know.I don't even own a truck to haul this stuff anymore.

When I'm ready to move, we just hire a transport company. They come grab it all and go set it up at the new location because it's just more reasonable than we're usually somewhere two or three years. So it's more reasonable to do that than it is to like own a big diesel dually or something that's big enough to haul this stuff. You know, for years when you're only going to need it once every few years.

[00:26:22] Tina Bradley: Great idea. Yeah. Now I'm thinking, you know, I mean, obviously in the UK, it gets very, we have long, long, long, it seems to get longer as I get older, long winters. Maybe, you know, spend some time in Spain, maybe spend some time in Thailand, just kind of move around a bit and get some sunshine.

So, you know, with this consulting, um, thing, I can, I can live anywhere. It'll all be done fantastically, you know, via zoom or whatever.

[00:26:46] Ronald Skelton: I don't get into anything I can't handle from zoom. I would not acquire anything in the 6 figure, 7 figure mark that where, number 1, if I needed to go there and run it.

That I couldn't drop everything go there and run it for at least 90 to 180 days. Just because that's what it takes to replace, four months, six months, sometimes a year to replace a good CEO or general manager. So I still believe that my heart and soul is like, if we acquire something, I have to understand that if I'm the only, if I'm the lead on this thing and that's my name on the line and it's my acquisition, then I might have to drop everything and go run it. So I spent a lot of time, so what you're talking about, I do contract for equity. I work on other people's projects where they're doing acquisitions and stuff.

And I help them source deals and get things done for equity and for pay. And that's,that's kind of the realm I'm in. So we're in the same, same boat there. So, um, how did the exit go? What was the process that you went through? Did you list with brokers? Like, tell us, tell us about like kind of the, the catalyst that made the decision to go forward and what the process looked like.

[00:27:53] Tina Bradley: Yeah, so well that the decision, you know,just a bit more freedom and like you say, you've just said, you know, if, if, if something happens, then you've got to, you've got to go back in and sort things. I don't want to do that. I don't want to be an owner anymore. I consult, be part of, you know, equity deal, and so on and have that freedom to move around wherever I want to be.

So looking at the exits, I had a couple of, I mean, I inherited some, some, some managers, thatkind of didn't work out. And so I brought in new ones who were really, really good. Most people in the industry, they're not business people. They just, you know, they understand the hair industry.

They can do basic, stock ordering, that kind of stuff. And so what I did, I put in systems of processes to make things super, super easy, you know, um, this is what you do. This is how you do that. Here's your, here are your KPIs, so on. So that's what I did for them. And, I kind of gave them the confidence to think that they could actually run this show.

And that's what I did. I, I said to them, it was a management buyouts, basically. I didn't, I didn't go through any brokers. I didn't list it for sale outside. I just said, you can do this. I've shown you how you can do it. Everything here, is it, you know, in Google drive. Everything you need, manuals, everything you could do it.

And that's it. Just giving them the confidence, to think, yeah, yeah, I can. It's not, I don't need to be just a manager because, they have this real fear, a lot of people don't know about business, have this real fear.You know, I've taken something on and, and, the responsibility and, you know, it's terrifying.

So I think it's that rapport again, just building up their confidence. Um, and showing them everything's a price. I always say, so I'm,I'm still available, give me a call. You need, need any help with anything, um, you know, I'm happy to help anytime.

[00:29:33] Ronald Skelton: Now on the, management buyout, did you do a structured deal where you're paying you over time?

[00:29:37] Tina Bradley: Yes, that would be all deferred payments.

[00:29:40] Ronald Skelton: Yeah. So, so now they have both the world that they own the business and if they get themselves in a spot, you have a vested interest to seeing them succeed. So that's the best way to enable a manager buyout and say, look, yeah, I want you to buy me out. We're going to do this over time. I have a vested, vested interest in that you succeed, you grow and you continue to prosper.

Otherwise you're not going to be paying me back. And, that's a great, I'm a big fan here in the United States we do a thing called, uh,ESOPs, Employee Stock Ownership Programs. And, I think it's an awesome way to get the employees to have some ownership in the game too. The managers typically end up owning more shares than the individuals do.

And those situations it's done by salary. But, um, I'm a big fan of the, the employees taking and understanding ownership in the company. 

[00:30:29] Tina Bradley: We have a similar here I think. I can't remember the name what it's called now, but yeah, but I just went straight to the managers. I thought, I didn't want to complicate things with all of, all of them. I just, you know, cause it was new for me too, doing this management buyout. So I just, you know, I thought, well, I've trained you.

I know what you're capable of. I know, you know, you can, you can continue this business, not running into the ground. And you've got me on the end of a phone as well. So it was kind of win win. Also personal guarantees, obviously. Put those in place as well.

[00:30:56] Ronald Skelton: Now, did you ever think about doing the, uh,whatever I used to refer to this. I don't know if I coined the phrase or one of my guests did. It's called, acquire to retire. So what he was doing, and I nicknamed it this, I think I'm the one that nicknamed it on the show with him, but he was acquiring companies. Doing what you were doing.

But he, when he did the seller finance, when he sold it off to the general manager, he would sell them 70 percent and stay on as a board member. So he would, so now he got to focus on buying new ones. Getting a good manager in place. Training them and overseeing that manager. Selling them 70%. And then he gets a 30 percent dividend from that business and he goes, buys another one. 

So that was one of the ways he, cause he wanted to stay in the industry. You may or may not have wanted to be in the industry anymore. But, uh, it also gave him kind of a, built his own board, with some of those managers. So now he just does board calls.

I teased him. So you're, cause he's buying more now. I was like, you're doing the acquired to retire. And, uh, he was like, a lot of people you know, sell to retire and you're going out and buying more business so that your retirement is there. But he said he buys good running businesses in his space. Make sure that, you know, find somebody usually at the company that would be a general manager. Puts the systems and processes like you did or, where everything's documented, everything's whatever.

And I think, you know, cause I don't, we're afraid of doing the taxes and what all the, you know, other stuff that lawyers and all that.He's like, all I do is I go, I build all that up. I say, here's your attorney, here's your tax person. Here's this, you know, if you need to change them, come talk to me because we're using the same person for all my other businesses, right?

But other than that, you own 70 percent of it at the end of your acquisition and he, he sells them off. And, I thought that was brilliant because now he gets to spend the minority. It's the asymmetrical risk thing I was talking about earlier. He got it, got money out of all of it. He's, you know, and he's, but he gets a retirement income off the, off his holdings.

[00:32:50] Tina Bradley: No, fabulous. I like it.

[00:32:52] Ronald Skelton: Cool. So let's talk about the, let's build the ideal customer for you now. Who is it that you would love to do the consulting for equity for? What is, kind of, what do you bring to the table and what is it that you would like to, do for these companies?

[00:33:08] Tina Bradley: Sure. So I'm looking, you know, I'm looking at small companies. Turnover, um, 500 K up to 5 million. Companies that are stuck. There's a lot of, I found a lot of companies that was stuck at a certain level and don't know how to progress from there. Companies, that need turning around.And also, companies that want to prepare for exit.

So it's not a, you know, I'm, I'm building up a, very, very capable team of, and I don't get involved with anybody who hasn't been in business for considerable amount of time. I get approached by people who've been in the corporate life, you know, do consulting and so on and, and that's not what we do. 

But I want somebody who's been in the weeds, who's done, you know, been there, done that. You know, that can talk to businesses on the same level rather than, someone who's been employed by a big corporation. So that's, that's the kind of person where, you know, as I said before, I was always looking at, you know, London and the surrounding area, but now it's worldwide, you know. Digital nomad, we, you know, we can go anywhere.

So that's, that's the kind of businesses that we're looking to work with.

[00:34:08] Ronald Skelton: It's interesting. I take a different, a little bit of different approach because I, I don't mess with turnarounds. You have to be in business a long time. And what I'm always looking for is you've heard this word acquisition and you know the growing, growing your company through acquisitions seems like a good idea, but you don't know where to start.

Like I'll come in and I'll source the deal. I'll help you build your buyer's profile. I'll source the deals for you. I'll actually, I'll even start the initial calls, build rapport with the potential seller. And then you're going to pay for the attorneys. You're going to pay for the due diligence. You're going to do due diligence.

You know, these are corporate to corporate mergers and acquisitions. Like you're going to pay for the due diligence. I get equity in the company and I get a piece of the transaction. I get, a bonus every time you close something. But, uh, I don't touch turnarounds. If you're not up and running and successful, you know, you need to get that taken care of before we go out and look for other companies to you, for you to acquire. I have one gentleman, I just have to look like, look, you're running, you already, you just told me you're running your company down.

I'm not going to help you acquire other businesses to put them on your directory, trajectory. You need to fix your trajectory first, right? And if you can show me, sometimes the business owner can show you what, look, if I acquired this, it would fix the problem because they have a, they've identified their key source of the problem and maybe an acquisition would be the solution. But often, it's not. Often that's,the industry changed and they fell to adapt.

[00:35:29] Tina Bradley: Yeah. No, I mean, I've got a brilliant turnaround expert, you know, as part of the team. So that's why, I, I would never touch turnarounds before. I would never touch distressed, um, but you know, I'm fully confident that this person, he's, he's got so much experience in it and lots of success. So, 

[00:35:45] Ronald Skelton: Are you currently like, do you have slots open right now? So somebody is listening to this right now. They fit that. Are you open right now for new, taking on new ones? Or you getting pretty full up?

[00:35:54] Tina Bradley: Yeah, no, no, open, open for, just getting started really because, I only, um, I only exited last month. And so just getting started, you know, the website, you know, building my brand now and then getting really, really, really good partners on board. Because, you know, I, I'm very keen not to, just for it, just, just to be me.

I want some excellent partners on board. So I'm looking for people, who've got, great success stories with turnarounds and, you know, scaling and, know, all that sort of thing. As well as obviously companies, that need, need, need that. I really want to build a solid team.

[00:36:28] Ronald Skelton: I think, you have a new skill that through your hair salon business, that's really critical for most businesses. The ability to identify a general manager and train them and get the systems and process to the point where they could become the owner, is hands down. One of the critical skills anybody that's looking to exit needs. 

They need to figure out, nobody wants to buy a company, I'm not saying nobody. Most people don't want to buy a company where, they have to jump in and be the CEO and there's no backup whatsoever. It's so much easier to sell that company if you have a general, at least somebody that could operate as a general manager and maybe, that can run the thing. 

[00:37:08] Tina Bradley: Sure. Yeah, you're a much higher, finding a buyer then. Absolutely.

[00:37:13] Ronald Skelton: Yeah, your ability to do that, to look at a company and go, okay, we need systems and processes for X, Y, and Z. Standard operating procedures for this. We need a really strong manager with the potential manager, buyout owner capabilities. It would be critical for any of the clients you bring on just because now they have something that's marketable at a higher rate, right?

You know, somebody like me or somebody who wants to be, do multiple acquisitions and buy things and have somebody else run it, can look at that and go, you know what, give that general manager a little bit of a boost and a regular call and maybe even an external coach other than just me.Hire them a CEO coach to make sure that they're on track.

And all of a sudden I don't need to put 40 hours a week over there.

[00:37:56] Tina Bradley: Yeah, absolutely. And the other thing with my experience with the acquisitions, because as we, we touched on before the rapport thing,I mean, I had, um, one particular acquisition. They, I went to go and see it. And, the guy said to me, we were talking and I said, have you had much interest?

Because this was listed with a small broker. And I said, interesting. He said that, yeah, we've, we've agreed to a sale. And so I said, well, what am I doing here then? So we said, well, you know, I like the sound of you. He said, and you know, I looked, cause I have my website, you know, which was all geared towards, that,hair, hair beauty and sector, LinkedIn, all of that stuff.

He said, and we, like I said, going back to what we said, it's like a family and his wife, actually ran the salon for 18 years. He said, and they are like family to us and we want them to be looked after and want someone who knows what they're doing. He said, so if you want it, I'll sell it to you rather than this guy who had no experience or whatever.

I mean, I had no experience in the industry when I started, but you know, I quickly learned. So, I got that deal um, through rapport, you know, and, and chatting to this guy, we're about the same age. We like the same music, all that kind of stuff. So that rapport thing's really so, so important,

[00:39:06] Ronald Skelton: Talk about that. Let's talk about that. Because you just said something, you're about the same age and you like the same music. I promise you there's a thousand listeners. They're going to hear this and they're going to go, I've never asked any of my sellers what music they listen to. So many people miss the ball on rapport.

It's not about just talking about the company and the financials. You want to build a rapport, you have to get into their world. How do you build rapport? What does your process look like that, a lot of it for us, it just comes natural, but intentionally, what do you do to build a rapport? 

[00:39:42] Tina Bradley: Well, it is natural. I am naturally interested in people. So, it's just one of those things, I'll ask questions, you know, about somebody I'll meet in the shop. I don't start talking to random strangers that would make me crazy. But you know, people like me, I'm just interested about their life, where they're from, and all this kind of thing and trying to find a commonality.

This is outside of business. I just really, really enjoyed doing that. And I mean, this guy, the music thing came from, cause we went for a drink in the pub next to the salon after we'd had a look. And he had this bag, which was a lambretta. Now I'm not that that old but the second wave of mods.

I don't know if you're aware of mods. I do remember those and so I said, oh we are the mods, we are the mods. And boom right away, you know, we connected, you know with, with that. And then we started about music and everything else. And it's funny because I only dealt with him initially. And then his wife who actually ran the salon, owned the salon, because she was afraid of dealing with business people. And he said to her, Oh no, you, you're fine with Tina.

You know, she's, she's very down to earth. She's normal. I mean, I go, still go for drinks with these guys and everything else. We get on really, really well. And that was a deferred purchase as well, by the way. Everything was deferred. So yeah, it's just, I, it does come naturally to me and I'm trying to think, if it doesn't come naturally to someone, just trying to find that commonality really. Just, you know, just do a bit of research on.

I don't normally do a bit of research on them. Like I say, I just, I just want to know of all about them when I meet them. But I guess if you, you looked at their social media, what they're up to, if they've got any social media, all that kind of thing, and, you know, even where they come from.

Oh, you're from there. Well, I know somebody who was from there. Or I've been there, or I went there once, or I lived there, you know, those kind of things where you just have to find that connection. I think it's so important.

[00:41:23] Ronald Skelton: I like to do that. On the first call with a business owner, one of the first things I do is I was like, okay, well, there's a lot of things we're going to need to get through to get this deal done. We'll just start really cool with, tell me what you built. And then they tell you, okay, cool.

Why did you build it? So I get to hear the story and then like, once they'll bring in stuff along the process, like they got married a certain time. Oh, you just said you got married. Tell me about your wife. And like, do you have, do you guys have kids? I have kids. And it just naturally, it's like a normal, natural conversation.

You said you won't talk about the strangers in a,in a, you know, the bar or I'll talk to, I would, I'm just the opposite. You can't stand in line in front of me or behind me without me, at least trying to start a conversation. It's mostly cause I'm curious. But, uh, I've been known for walking into bars and restaurants and like coffee shops and stuff.

And within 20 minutes that the owner is sitting back there with me chatting with me. It's just because I'm insanely curious. Probably told this story on the pod already once, but I walked into a coffee shop, my wife was with me. And the owner, I didn't know she was the one waiting on me. It was a new coffee shop I'd never been.

Right beside a cool, cool coworking space. Had a new kind of modern feel and vibe to it. And I drink high end, good quality teas. I don't drink coffee. So when I walk in, I like look at their tea menu. Do they have some type of matcha or they have something that I can drink this tea based, even if it's just chai or something.

And so, I ordered my tea and, you know, I asked the lady, said, so just exactly, this seems pretty busy. Do you guys see what? A hundred or 200 people here today? She's like, no, about 400. I was like, cool. And the next thing I know is like, we were, when we were chatting. I was like, you know what?

I told her, I said, if you get a moment, like if it's not too busy, come hang out with me. I'm just really, I'm a business owner myself. I'm just curious what you built here. Next thing I know, there's, she's back there and about five, 10 minutes into the call, she's like, or the call, but the, the, the sit down. She said, I don't think I've ever told anybody this much about my business.

How do you do this? Because I figured out, and it wasn't like, I'd say, how much do you make? I was like, well, you know, I would go, you said you have about four or 500 customers through here a day. That's a lot. So there was, you know, there's no risk of that. I'm just insanely curious.

[00:43:28] Tina Bradley: Yeah, I know. Another great question. I think, you know, when you're speaking to a seller is what they're going to do next. Get quite excited for them. I'm going to, you know, travel around the world or, I've got to do this or spend more time with my grandkids. All these things, you know, that's one of the first questions I asked them.

So, you know, when you get all this money or whatever, when you sell your business, what's next, what are you going to do? And, I get quite excited with them, um, for what they're going to do. And it helps you actually structure the deal. Cause once you know what, what the, what their life goal is, the next stage of their life, then you could structure it that's going to help them. Win, win.

[00:44:03] Ronald Skelton: I have an awkward sense of humor and I can ask people questions that they get that I'm kind of in jest. It's, it's intended to be slightly funny, but I want to know the answer. So I get away with a lot of stuff. So it's not uncommon for me to be on the show, on a call, with a business owner and say, you know, they've already told me what they built.

And then right when they get done with what they're built before they find out, like, what are they going to do next? I always say, out of all the people you could be spending your day with, what has you on the phone with them? A guy who does investments and buys and sells company.

What has you on the phone with a guy like me? Then I'm trying to figure out why they want to sell. And then once we get that down, I'm like, that leads into what are they going to do next? Cause usually during the, you know, why are you on the phone with a guy that buys or on a zoom call with a guy who buys and sells business?

They'll tell you they got this other project and they were in retirement, spend time with their grandkids and you just dive deep into that. I think it's coming around now, at least in my circles, because that's, we talk about it constantly. A lot of the guys coming out of, the new programs and coming out of ETA,entrepreneurship through acquisition from college level. They're missing the rapport piece.

[00:45:05] Tina Bradley: They dive into the first call and they go, well, how much did the company make? When can you send me the financials? You know, do you have an NDA? I have an NDA. And they've got this checklist and they wonder why they don't get deals done. Trust isn't being built up as well. People got to trust you at the end of the day, especially a small business, it's their baby. If you've ever built up a small business, you, you'll understand that. They put their blood, sweat, tears, everything, for this business. And they've, I think they've got to trust you, especially if they want the team to be looked after, that trust is a massive thing and rapport does that, I think.

[00:45:36] Ronald Skelton: So you've built rapport. When do you start talking about business side of it? So you've got the rapport built and they, like they kind of, you kind of know it's somewhere you want to, you go. How do you actually introduce the conversation from, Hey, we're just getting to know each other to the point where you're going, okay, now I gotta, cause I kind of have to see the financials. I have to see the tax returns. I have to see the, the,

[00:45:59] Tina Bradley: Yeah. I kind of weave in the,the personal stuff with the business stuff. So, you know, because it's a big part of their life, you know.So someone's talking, talking like we'll give the music thing,give that as an example. So, you know, I said, well, how, you know, how did you get in this business then?

Then he tells me about his wife, you know, when he met her, she was a hairdresser and he persuaded her cause he was an entrepreneur too. Persuaded her to set up her own salon, you know, then it kind of went like that. And then I, you know,I like the salon, obviously. I looked around, I said, oh, she's done a great job.

Lots of, you know, compliments because I meant them. I don't say stuff, I don't mean. And I said, yeah, I'm really interested. And so the next stage, you know, obviously will be for me to take a look at the numbers. So I just say, have you got those, you know, available? Would you need to ask your accountant for them?

So that's kind of, it's very a natural thing,you know, to, to go through. They know while you're there. I mean, it's not no surprise for them.

[00:46:49] Ronald Skelton: And then what does the conversation around the deferred look like? David, our mutual friend, David Green, he likes to run that joke and says, uh, Hey, I called you today. You got this business. You run it for 30 years and you built it to a million dollars.

I've got a great idea. Why don't you give it to me? I'll run it better than you. And I'll just pay you over time. I'm not going to give you any money down. When you pitch it like that, it's just not going to work. But that's in essence, that's the pitch. You just got to add a better flavor and angle to it.

What does the conversation look like for you when you're doing these deferred payment structured? In the United States, we call them seller finance deals. Every, everybody calls everything something different. I don't, I don't understand. Got a million terms for every single thing.

[00:47:30] Tina Bradley: So yeah, I mean, the one I'm talking to you about now, they'd already been offered a deferred payment deal. And so I, you know, I said, what was he offered you? And they told me and I, you know, it was, because I would never pay more than, 1. 8 multiple and then I sell them for three. Three times multiple. 

And so I said, look, I can match that. That's absolutely fine. So that was easy. I mean, you know, literally given to me. The other one that was done through, leveraged finance, so basically we have bounced back loans, you know, during COVID. So people were able to borrow from the government, have a chunk of money.

And it was like 2%, you know, paid back. And it was not personal guarantee. It was loaned to the company. So the other one, I said, all right, you can take that money because it wasn't touched. She was going to pay it off. I said, don't you dare. I said, you get that money. I said, and that's the payment for the fees.

Now, the other ones, what happened was I, told them, you know, I said to them, look, and it's true. I don't say anything that isn't true. I said the current climate, I said, banks aren't lending on these businesses. I mean, this was, we just come out of COVID nightmare. I mean, it was a nightmare for that industry.

Banks aren't loaning for this. You know, it's too high a risk. I said, but you know, I'm willing to take some risk. I said, but you're going to have to take some risk too. And here's what I propose. If for any reason, I don't pay any of these payments to you, you take the business right back.

So, you know, there's no risk to you in that respect. All right. You may not want the business back, but you know, you haven't lost everything. And then because I'd already done it with another seller, I got them to give me a reference. So, I got speak to the next one and then speak to the next one and so on.

So, that, that's kind of how I did it. I said, you know, I said, if that's not something, and I always say this to people, if that's not something that's, you know, palatable for you, what I suggest you go with a broker, please don't pay them any money upfront. Go with a broker, put it on the market for a year or two.

I said, if someone's got a big bag of cash, they want to give you, I said, fair dues, you know, good luck to you. Take that, take the hands off. But, most people don't want to wait one or two years. They kind of have decided already. Now I want to sell my business. So, you know, it was always, no, no, I'll go with you. So that's kind of how I did it.

[00:49:36] Ronald Skelton: That's an awesome approach. What does it look like now to reach out to you? I know you're still finishing up the website and you're changing some stuff over, but if somebody hearing you today and said, you know what,I have a slight turnaround. I'd like to, you know, get some help getting, moving back in the right trajectory. And I would like to,maybe acquire some other businesses and, and learn and be beside you, Tina.

How do, how would you want 'em to reach out to you? What's the best way to contact you?

[00:49:59] Tina Bradley: Oh, I guess on my website, uh, sorry, my email, I think I gave you my email. I've got LinkedIn. Well, I usually accept any,connections as well. I can give you my mobile number if you like. I mean, I don't know if that's sensible to give it out on the internet. But, yeah, happy to hear from people.

[00:50:14] Ronald Skelton: You're more welcome to give out anything you want. I have your, for what I have to put on the show, I do have your email address. You want your LinkedIn on there also, or?

[00:50:23] Tina Bradley: Yeah, that would be great. Yeah. Thank you.But yeah, you know, I'm happy to help you. I don't want to be an owner, but I'm, I'm, you're more than happy to JV with people, get people over the line. And especially if they're in the hair and beauty industry, show them all my systems, get things running, build up a group, you know, cause I've done it. So yeah.

[00:50:40] Ronald Skelton: That'd be a fun one to do too. You can actually help people and do a consulting for equity on your behalf and help them do what you've done with the multiple salons. To bring in that general manager, to sell it to somebody and to keep that family together. You could carve off a whole niche of the market just doing that with the, the hair salons and you could do it all, you know, all over the world.

Cause you can do it from anywhere that has a zoom. You're just coaching at the point. So brilliant. So, last question, I always ask everybody just to make sure that we get your key points across. If somebody only can remember 1 or 2 things today, what would you want them to remember from this interview? What would you want them to walk away with?

[00:51:18] Tina Bradley: Rapport is very, very important. And if, if you haven't got it naturally, then, try and build up, cause it is a skill. Try and build on it. So people like you say, isn't have natural, naturally got it, but build on that. Absolutely. People, sell to people they like, people buy from people they like. You know, that, that's, that's the way it is.

Don't need to go for these massive big companies. Maybe that's a good idea, but you know, if you're finding it difficult, just build up, you know, small ones. Around about half a million, build up a few of those. So that, that would be the key ones, I guess. And never give up, obviously.

I mean, that we all know that one, but you know, it's, I think my father taught me that watching him go through several businesses until he found something that, that worked for him, which he kept until he died. Yeah. Never give up.

[00:52:00] Ronald Skelton: Awesome. Awesome. Well, thank you for being here today. I want to make sure everybody knows how to reach out to you. So we'll get that out there on the show notes. And, it was, awesome to have you here and learn from you. And I look forward to, uh,seeing you on the different calls we're on and to seeing you succeed in the world and helping you anywhere I can.

[00:52:18] Tina Bradley: Thank you so much, Ronald. Thank you. Thank you so much for inviting me again. Thank you. I enjoyed it very much.

[00:52:23] Ronald Skelton: We call that a show. Hold on for just a second.