[EP 294] What’s love got to do with it?

Introduction 00:00:00 – 00:00:02
Ladies and gentlemen, good evening. Are you ready?

Introduction 00:00:03 – 00:00:04
Okay, here we go.

Introduction 00:00:04 – 00:00:22
You’re listening to the Deal Room Podcast. Join us as we bring you the inside scoop on business sales and acquisitions. Get across trends in the area and hear the industry’s best recount their real life tips, traps and experiences. Now here’s your host, Joanna Oakey.

Joanna Oakey 00:00:24 – 00:00:49
Hi, it’s Joanna Oakey here and welcome back to the Deal Room Podcast, a podcast proudly brought to you by our award winning commercial legal practise prospect Legal. Now, in this episode I am talking with business broker CEO Pataris digging into the ever evolving landscape of business broking. And if you’re a new broker or a business broker new to this podcast, definitely cheque this episode.

Joanna Oakey 00:00:50 – 00:01:59
We’ve got some fantastic resources, upcoming events specifically for brokers. So simply pop your details in and we’ll send them your way. Now, Theo is a seasoned business broker with over 30 years of experience in business development, marketing and operations. And he’s a former founder of the award winning business Digital Press. He now specialises in helping businesses transition using his expertise in strategic planning, negotiation and successful sales within the New South Wales market. Now in this episode, Theo and I talk about his journey from running successful printing businesses to transitioning into business broking. A little Valentine’s Day story on point for the timing of this episode and we also touch on key skills for business brokers, the importance of understanding, numbers, compliance, due diligence and all these insights. And Theo’s story is especially interesting for any new brokers, anyone thinking of becoming a broker as well as business owners considering selling.

Joanna Oakey 00:02:00 – 00:02:06
So without further ado, let’s get started. Welcome to the Dear Podcast. It’s such a delight to have you here.

Theo Pettaras 00:02:07 – 00:02:19
Thanks Joanna. It’s really good to be invited. I really appreciate the invitation and I’m a big fan of what you do and how you do it and love your podcast. So thanks very much. It’s a privilege.

Joanna Oakey 00:02:19 – 00:02:53
So sweet, Theo. Now we’re here to talk about a couple of things. Today we’ve got very relevant theme for our release date here which is actually Valentine’s Day. It’s a little bit of an unusual story and so apt for Valentine’s day. And then I also wanted to examine some of the I get themes around how you came to business broking. So why don’t I let men not jump in and tell your story for you? You tell your story how you came to business broking. Tell us a bit about your business.

Theo Pettaras 00:02:53 – 00:03:38
Thank you, Joanna. So I’ve had a working career of +40 years now I’m in my early 60s and I started off in an architectural background and strangely enough, I was invited by my brother to help him start a printing business. And I knew nothing about printing and I was at that crossroad. Whether I continue with my professional career or I jump into business, and much to a lot of people, Dad’s advice was don’t do it, stay with your profession. I opted to go with my brother and we built a very well known, reputable printing business over the course of 15 years. And at the time when I sold my share of the business, there was approximately 120 people working the company. So it was very successful. So I actually did make the right decision, it was good.

Theo Pettaras 00:03:39 – 00:04:41
And decided after being in business with family members for those years, it was time to hang my boots there and ended up starting a new business called Digital Press. And it was basically, if you could imagine, running a marathon and then stopping and then before you even get a chance to break, you just run that marathon again. Suffice to say, I spent another 15 years owning and operating running this business called Digital Press, which ended up being the country’s most awarded printing business. I was involved in a lot of the associations and I loved it, but I really felt I came at a crossroad. And what happened after 15 years of this second business, I decided time to sell. And as it turned out, I was going through a couple of life changes and I was divorced after a 30 year marriage and thought, look, you know what, 15 years in one business, 15 years another business, time to move on. I think I done enough in the printing industry and contributed enough and it’s time to sell. But at that stage I didn’t really know what I was going to do in my next venture.

Theo Pettaras 00:04:41 – 00:05:36
So I left it open. And as it turns out, I decided that it was a good time to sell Digital Press. And. And I found that was a really interesting process because I’ve never really been experienced in having a business like this sold. So the process was actually, whilst there was quite a lot of emotion involved, it was also a really good cathartic experience because it got me the opportunity to look at what I did in that business over the 15 years. And there was a great sense of achievement, naively for me when it came to sell and preparing everything, I felt that there was a significant amount of equity and value in my sweat equity. And very quickly I realised people don’t really take that into consideration. There are other things like the numbers and your intangible assets and that.

Theo Pettaras 00:05:36 – 00:06:35
So the Process of selling the business was great. I had a broker that, that did that for me and it was great and I was relatively happy with the process. It was sold before COVID So in hindsight, was it a good time to sell? I think most definitely it was. So I was lucky in that sense. So when I sold the business, I had a three year restriction of trade and that made it difficult because I knew straight away entering into the printing industry again was not going to be an option for me. And because I enjoyed the process so much, I saw that saying you loved the process so much you ended up joining the firm. And that’s what I did. So I started working for a small business broking firm and did everything from marketing, sales, referral work and then eventually in my stripes as a business broker, did all the necessary courses to obtain a class one licence and I was there for four and a half years.

Theo Pettaras 00:06:35 – 00:07:32
But just going back to that whole process of selling the business, a small private equity company, Joanna, bought the business and the fit was right. They, they seemed to be the right type of business that I felt that could carry on the legacy as new custodians of the business. I was happy with that and as it turns out, speaking of Valentine’s Day, I’ve got a little story I wanted to share with you. When I was doing a three month handover, I got to be quite friendly with one of the directors in the business. Really good guy, decent person to work with on a personal level as well. And he had a friend who had a mutual friend. And long story made short, I was introduced to this lovely lady that I absolutely fell for straight away and suffice to say, organised a first date a year to the day that I actually met her. We ended up getting married and we’re still very, very happy.

Theo Pettaras 00:07:32 – 00:07:42
I have had my second chance, my personal chance in life and could not be happier. It’s so thankful for that business sale, for finding my lifelong partner, which is great.

Joanna Oakey 00:07:42 – 00:07:48
Sold a business, gained a lot. Sold a business, gained a wife.

Theo Pettaras 00:07:48 – 00:07:52
Sold a business, gained a life. Exactly. Yes.

Joanna Oakey 00:07:53 – 00:08:00
That’s among the most unusual business sales stories I’ve heard. Pillows like how great.

Theo Pettaras 00:08:00 – 00:08:02
No, it’s hard.

Joanna Oakey 00:08:02 – 00:08:11
I do know the sale of the business really does mark the big change life but boy, you really, you really put that to max.

Theo Pettaras 00:08:11 – 00:09:10
Yeah, it’s great. And the thing is that I met my wife and during the time that I met my wife basically was the start of my career as a business broker. And so she’s actually witnessed my journey from low to go and it’s been very interesting because a lot of people, a lot of business brokers that I speak to obviously don’t. They’re not aware that it actually can take a lot of time to really hit the ground running. It’s not one of these overnight success stories. It’s a long, hard slog. Very difficult to actually, if you haven’t got the existing clients and contacts, connections, it does make it a little bit more difficult. I was lucky in the sense that after 30 years I got to know a lot of people and that helped me a lot to be able to reach out to various people and to tell them what I’m doing, but also to get some credibility as a business broker.

Theo Pettaras 00:09:10 – 00:10:21
You could imagine you’ve gone from owning and operating the business and being more marketing centric to being a business broker and the credibility that you need to obtain. And of course, as a business owner, I know I was working very much in the business, not on the business. There are a lot of things that, you know, what I know now after five years, if only I knew that back then, it’d be great. And I think the biggest thing for me was understanding numbers. I really wasn’t great with understanding numbers. And I never thought that I’d be a type of person that would be actually doing analytics for businesses, looking at their businesses, look at their financial performances, reading their financials, creating financial recasts and really understanding businesses very well. And I feel that I’ve really got that down pat now where I can go and talk to business owners, have a look at their numbers, having discussions with them and getting a real understanding of where their business is at, looking under the bonnet, which I’m actually very good and I think it’s very important. But the is how I found that was the hardest challenge.

Theo Pettaras 00:10:21 – 00:11:09
And the other thing is that I’m in my early 60s and I started this career late in my 50s. And we talked, I mentioned before about doing a marathon and doing it over again. This is like the third marathon that I’ve done, you know, really, you know, working hard and long hours and really dedicating not doing this as a part time, you know, career. It’s a full time career for me. But the things I love about it is that it actually gives me longevity. So I can actually, I feel that I can do this long term and I love that. And it actually gives me the flexibility as well where I do go into the office at Link in St. Leonard’s and interact with my colleagues and I really enjoy that and I enjoy working with a great firm like them, but also having the flexibility to be able to work from home.

Theo Pettaras 00:11:10 – 00:11:46
So I work early in the morning, I can work late at night. I can be very responsive and attentive to my clients, both vendors and prospective buyers. And I find that it’s a great career. It’s been a great career move for me and I’ve had a lot of people, a lot of colleagues have actually reached out to me and said, hey Theo, I’ve noticed that you very active out there as a broker. What’s it like? I’m thinking of leaving my profession or selling my business. And I feel that this could be something for me. And lots of times I speak to people and you can tell whether they’re going to be good as a broker or not. I’ve really enjoyed that.

Theo Pettaras 00:11:46 – 00:12:35
But I think, Joanna, the secret to success in being a good A grade broker is the fact that you’ve got to do the hours and you’ve got to have exceptional communication skills and great people skills. You’ve got to be a great people’s person to be able to win the confidence and the trust of the vendors and the buyers. And I’m finding that is the case with me. I think after 30 years in sales I must have learned a couple of things. But coupled with that, I’ve also got the experience now of understanding numbers as well and understanding how business is run. And it’s, it really is a very rewarding career. I really do think and encourage that. If people are looking at a career and business broken, I think it’s a great profession to be in.

Joanna Oakey 00:12:35 – 00:12:36
I’ll tell you.

Joanna Oakey00:12:36 – 00:13:22
It’s a really interesting thing. I was seeing this sort of a different wave moment in, in business broking. So traditionally I see a lot of business brokers coming into business broking from having solved their business. I’ve been fascinated by that and I’ve always wondered like why, what is it? Obviously you’re exposed to seeing the sale process, but maybe talk to me about what, why you think it is. I’ve often thought it’s just fascinating the number of brokers who come into it from having sold any sort of business. Like there doesn’t the industries that, that they’ve come from vary. But the fact that they’ve sold their business and they come in, I think.

Theo Pettaras 00:13:22 – 00:14:00
Previous owners going into business breaking, they do it because obviously they’ve had a good experience with selling their business. I also think that if you look at somebody like myself who’s actually bought and sold businesses, I actually understand the nuances around somebody wanting to sell their business. There’s a lot of emotion around that business. This is a huge investment for them. You’ve got to be empathetic. You’ve got to be able to read them and understand their feelings and the emotions around selling their business. When you’ve gone through it yourself, you can actually explain it to them. And I often do that as, look, I understand how you feel.

Theo Pettaras 00:14:01 – 00:14:38
I know it’s very emotional for you, but you make it more pragmatic for them and it provides a bit of comfort for them when you know that you can relate to them, how they’re feeling and have that bit of empathy with them. I think it’s really. I think it’s really important. And same with buyers as well. I love selling businesses and I’d love to sell the business every day. Truth be told is that we do get people inquiring about businesses that we have and it’s not uncommon for me to say, I don’t think this will be the right business for you. And I give them my reasons and most times they’re very good. There’s no rule egos involved in it and they understand.

Theo Pettaras 00:14:38 – 00:14:59
So my aim is to be able to, A, have great businesses to sell that I would feel that I’d be comfortable buying myself and B, making sure that we present businesses to prospective buyers that we feel that will be good fit to take it on to the new owner.

Joanna Oakey 00:15:00 – 00:15:20
As I say, I’ve reflected on this question a little bit. Do you think also when you sell a business, for many business owners, you’re not ready to let go of entrepreneurship yet and business broking gives you that opportunity? Because most business owners I know actually love business.

Theo Pettaras 00:15:20 – 00:15:21
Yes.

Joanna Oakey00:15:21 – 00:15:32
You’ve got different types of business owners who are technicians and love the technician aspect, but a lot of business owners just love the cut and thrust of business.

Theo Pettaras 00:15:32 – 00:15:33
Yes.

Joanna Oakey 00:15:33 – 00:15:43
Anyone built multiple businesses over three decades that someone who blunts the cutting for us?

Theo Pettaras 00:15:43 – 00:15:43
Yes.

Joanna Oakey 00:15:43 – 00:15:48
Makes them wonder whether that is an element that really works.

Theo Pettaras 00:15:48 – 00:16:15
Yeah, yeah, you right. You raised a really good point. When I sold my business in my late 50s, I was at another crossroad and I wasn’t quite ready to retire for a number of reasons and a divorce will actually. Yeah, but. And I really wasn’t prepared to work for somebody per se. I just didn’t want to. Too many years been on your own. And I also wasn’t prepared to buy another business that I had to put everything into.

Theo Pettaras 00:16:15 – 00:17:05
Not just collateral, but also the time and effort and business breaking to me just seemed like it was just. It’s just something that I knew that I could scale, I could learn. I have a real thirst for learning and I love it. And I felt that if I could utilise my skills, my experience and hone in on them and also obtain additional skills, that it’s something that could give me some entrepreneurial leverage without necessarily having my own business as such. So this can be as small or large as I want to. It just depends on how many hours a week I’m prepared to work. And obviously I’m touchwood, I’m healthy and I keep myself fit and I’m able to do long hours. I don’t mind doing long hours because the rewards are amazing.

Theo Pettaras 00:17:06 – 00:17:35
You look at the commissions that us breakers get compared to real estate agents. From my perspective, real estate just doesn’t suit me. I just wouldn’t want to do that. I much prefer getting into nuts and bolts of understanding businesses and working out who I can match this business with and that. So it just gives you enormous flexibility. And I’m thinking to myself. Shivers I’m in my early 60s and I’m actually performing business wise better than I ever have been. Like as razor sharp.

Theo Pettaras 00:17:35 – 00:18:32
I feel very much on top of it. I feel confident in what I do and I feel really happy that it’s a very rewarding career. Back in the day when I was printing businesses, we got work through basically knocking on doors and ringing people up and asking if they want X amount of business cards printed for a couple of hundred dollars. This is whilst they took you seriously, they didn’t really take you seriously. When you’re in business breaking, you’re in a different profession where people are relying on you to provide them with really good ethical advice and they respect that. And I find that’s a person really rewarding also. It’s rewarding when you know you’ve got a vendor that has worked very hard for many years and they’re tired and they need to retire or whatever reason and that you can actually get them out of that situation they’re in and change their life. And I’ve got a lot of satisfied vendors that I’ve worked with that have felt that.

Theo Pettaras 00:18:32 – 00:18:35
And it’s really. Joanna, it’s really rewarding.

Joanna Oakey 00:18:35 – 00:18:40
And I know that too because obviously for very similar reasons. I love this.

Theo Pettaras 00:18:40 – 00:18:41
Yes.

Joanna Oakey 00:18:43 – 00:19:24
And it’s a fantastic. It’s a fantastic area from my perspective, a fantastic area of war because I love business and it lets me be very practical in terms of helping people with it and the exit and exit side. So I Get it? I completely understand, Theo, but. And I think it’s just fascinating, as I say, there really is this theme in business brokers. But the one thing I’ll throw out there that I think is interesting at the moment, I’m seeing this whole new wave of business brokers come in who are coming at it from a different perspective, actually from more early career.

Theo Pettaras 00:19:24 – 00:20:22
So what I found and working with Link, I love it because, you know, I’m in a team of 50 plus 60, 60 people there and it’s great because I get to share my story with them, I get to in some ways mentor some of them and particularly the younger ones as well. And you’re absolutely right. We have brokers there that pretty much, you know, in their 20s and they’re getting into it and I think that if they can sustain themselves and invest a few years, they’ve got a great career ahead because business break is not going to go away, it can’t be disrupted and it just requires good skills. And these younger people, they’re fantastic and they’re highly motivated people. Whereas me, from the other perspective, I’m coming at from a. The twilight business career of mine. But I’m just as enthusiastic as they are and in some ways I’m even more. But it’s great seeing these younger people and people been able to sit down with them and mentoring them as well.

Theo Pettaras 00:20:22 – 00:20:43
I think gone are the days where, you know, business breaking now is under a lot of scrutiny. There’s a lot of rigmarole around getting your licence and every year we’ve got to do our. We’ve got to do our courses to make sure that we remain on top of things and that. But these people are fantastic. So we’re seeing a lot more of that happening in China.

Joanna Oakey 00:20:44 – 00:21:24
Yeah. I said, well, just, you know, I guess round this out, I guess there’s two things we’ve really looked at today. Your, Your process of buying through and selling your business and your learning. For me, this, this new. This new career of what business broking is like as a career and some insight, which I love. Two questions for you. The first one relates to the first bit, which is what do you feel now with everything that you understand about business sales in comparison to what you knew when you’re at that point of selling your business, what. Or building your business per sale? Maybe that’s even more important.

Joanna Oakey 00:21:24 – 00:21:34
What are the nuggets that you would give that younger you, that earlier you, as you were building the business and then as you were heading into a sale.

Theo Pettaras 0:21:34 – 00:22:13
The first thing I would do is make sure that I communicate that it’s not a short term fix that you’re not gonna, you’re not gonna hit your stripes in a short term period. You’ve got to look at long term whilst having short term goals are fantastic and I advise to have those short term goals. But don’t be unrealistic. Developing the skills, the sales skills and understanding the importance of the sales hustle, that takes time. It takes skill. Also. Understanding numbers is really important and once you understand the numbers things, things become a lot easier for you. So that’s very important.

Theo Pettaras 00:22:13 – 00:22:48
So if a young broker comes, decides that they want to make a career in business breaking, the important thing is to realise that it’s not going to happen overnight. It does take time, but the amount of time that you invest in it, the amount of time you invest in, in working, creating your client base, your database, understanding the laws and making sure that you operate 100% ethically and understand that will make the process a lot easier for you. But if you’ve got time, if you can sustain yourself while you’re building that career, that’s the secret, because it does take some time.

Joanna Oakey 00:22:49 – 00:22:54
I love it. So my idea of your next career is you’re selling the first business. Is that what you say?
Theo Pettaras 00:22:54 – 00:22:57
Yes, absolutely. Absolutely. Yeah.

Joanna Oakey 00:22:57 – 00:23:37
Okay, that’s interesting. But I guess so many business owners that’s it’s a full time job being focused on the business that they have at hand and making sure their exit they in the best possible way for exit and actually one point you just mentioned was about being compliant. And it’s interesting that you mentioned that because not many business owners talk in that, in those terms even after a sale that you sell into pe. To talk me through a bit like why you talk about the compliance side, was that a particular focus in due diligence or. Yeah, charisma, yeah.

Theo Pettaras 00:23:38 – 00:24:33
Look, it was important for me to make sure that when I had the business ready to at least and have a market that I had and that I was compliant with everything and I found that there were some gaps. And when you do a gap analysis on your business and look at everything, you think that you are on top of everything. But when you actually look at it really closely you realise there are some things that I better do that. But the other thing is even like little things like having a centralised file system for the time you go to list the business to have all your compliances in there, your hr, your finance, your finances, everything goes into a centralised folder to make sure that it’s all ready. It’s almost like putting a bow tie around your business before ready to sell it. That’s what is it. And that’s what I’d learned from the sale of that business and why it’s important for businesses when I speak to them to make sure that they have a similar structure in place. It just makes the process so much easier.

Theo Pettaras 00:24:33 – 00:25:15
And a lot of times I might have a potential buyer and they’ll look at the information memorandum, they’ll have a look at the recast that I do. And at times that is a level. There’s a certain level of suspicion sometimes, oh, this can’t be right. And then to be able to validate that with everything that we have that we’ve prepared prior to listing the business really does help build that trust and confidence. So I can’t stress how important that is to have. And as a broker, it’s our responsibility to make sure we do our vendor due diligence, to make sure that we feel really comfortable with the numbers and the business, that we’re letting the potential buyer have access to all this information, that we can qualify it all.

Joanna Oakey 00:25:16 – 00:25:30
But in my very last question, what are your words of wisdom to anyone out there who’s thinking maybe business breaking might be a career?

Theo Pettaras 0:25:33 – 00:26:32
I think the words of wisdom are, the important thing is to be able to have great communication skills. I think that’s really important. And to be able to be proactive, you need to have a lot of proactiveness, you know, in order to make sure that not only you are able to obtain a business listing, but once you haven’t listed, what are you doing about finding a buyer for that business? And my philosophy is that we don’t just rely on advertising sitting on our hands and hoping that somebody from those ad portals is going to call us. Understand, who is your buyer? Who’s your target buyer? Who is the buyer avatar that you need to find? Is it a strategic acquisition? Is it for whatever reason, somebody’s come to some money and want to. Wants to find a business. They don’t know what business they want, but they’re looking for something. I think that’s really important. And the sales hustle is just critical.

Theo Pettaras 00:26:32 – 00:27:02
You will not sell a business unless you’re very lucky. And it’s just an absolute ball terror of a business. To buy it requires a lot of sales hustle. So you’ve got to be prepared to sit down and make the phone calls and to explore where those potential opportunities lie. The other thing is, communication is very important. But Also the follow up to make sure that they say that time kills deals. We want to make sure that move it. When we have an inquiry, we follow through very quickly.

Theo Pettaras 00:27:02 – 00:27:16
So you’ve got to be very proactive with that as well. So that’s really important. So you know, if you like speaking to people, you like crunching numbers a bit, personal skills, that’s all very important. That’s the making of a good broker, I believe.

Joanna Oakey 00:27:16 – 00:27:39
Love it. Love it. This has been Valentine’s Day, so not only have we talked about how selling a business can assist you in finding your life partner in brooking that cause and love on business can bring you to business broking and how business broking really is about.

Theo Pettaras 00:27:39 – 00:27:51
Absolutely. And Joanna, happy Valentine’s Day for you. I’m on that. But when hanging out with my wife, having a nice dinner together, I love it.

Joanna Oakey 00:27:51 – 00:27:57
Theo, you guys had a fantastic time about the meeting over the same.

Theo Pettaras 00:27:58 – 00:28:11
Absolutely. And listen, thanks for all the great work you do. Love your podcasts and it’s great just having you around the industry. It doesn’t get unnoticed, you know, we really appreciate it as well. So thanks for the opportunity. I love the chat. It’s great.

Joanna Oakey00:28:11 – 00:28:12
I love it, Theo.

Joanna Oakey 00:28:12 – 00:28:20
Thank you. And look, how can our listeners find you? If they’re interested in chatting to you about having your problems a little bit.

Theo Pettaras 00:28:20 – 00:28:39
It’S probably the easiest way is to find me on LinkedIn, which is Theo Pataris at LinkedIn or just simply the linked Linked business sales. Sydney, my details are up there. Always happy to talk to somebody confidentially. There’s no obligation. Always love to help people.

Joanna Oakey 00:28:39 – 00:28:42
Love it. Theo, thank you so much for joining us.

Theo Pettaras 00:28:42 – 00:28:44
Thank you very much. Really appreciate the time.

Joanna Oakey 00:28:45 – 00:30:05
Well, that’s it for this episode of the Deal Room podcast. We hope you’re now primed for your next deal with these points pointers and have enjoyed these fascinating insights. Now, if you’d like more information about this topic, then head over to our [email protected] where you’ll be able to download a transcript of this episode as well as access any contact details and any other additional information we referred to in today’s podcast. Now, if you’d like to get in contact with our guests today and the services they offer, you can go ahead and cheque out our show notes for for a link right through to them and their details. You can also book in directly with our legal legals at Aspect Legal if you’d like to soundboard your next steps, discuss a legal question or find out more how we can assist, whether that’s with buying or selling a business, or perhaps somewhere in between. Now, don’t forget to subscribe to the Deal Room Podcast on your favourite podcast player to get notifications whenever a new episode is out. We’d also love to hear your feedback, so please leave us a review and rating if you’re already one of our subscribers, or even if you’re listening to this podcast for the very first time, every review helps our team produce valuable content for you. Well, thanks again for listening in.

Joanna Oakey 00:30:05 – 00:30:32
You’ve been listening to Joanna Oakey and the Deal Room Podcast, a podcast proudly brought to you by our commercial Legal practise. Aspect Legal See you next time, ladies and gentlemen. That will conclude this evening’s entertainment. Thanks for listening to the Deal Room Podcast. To find out more about this episode and other episodes in the series, cheque out the show notes or head over to our [email protected].