Starting, Selling, Buying Back and Selling Frank PR Again with Graham Goodkind

[00:00:00] On today's episode of The Exit Plan Podcast, I talk to Graham Goodkind, the founder and chairman of Frank PR, who shares his journey from working in PR to establishing his own agency. We talk about the rapid growth and the complexities involved in selling it, and the story of how he eventually bought it back and then sold it again to an employee ownership trust. Hope you enjoy today's conversation.

[00:00:26] Hello there, I'm Graham Goodkind, I'm the founder and chairman of Frank PR. Lovely. So yeah, it'd be really useful if you could just give me a bit of background in your career, like when did you set the business up? How did you get into it? Well, I sort of fell into PR years and years ago after I sort of finished stabbing and traveling. I went and did some work experience at a place called Lynn Franks PR working for Lynn herself, who was the originator or the role model for the absolutely fabulous PR series, if you remember that.

[00:00:56] And worked my way up there from just a work experience and then a trainee and ended up being managing director there 10 years later. So that's where I cut my teeth. And then after a couple of years in the dot-com world, I set up Frank in 2000, so 25 years ago. Celebrating, still around celebrating our 25th anniversary obviously this year. Wow. What was it like making that leap from being employed to setting up your own business? Because that's a big step.

[00:01:25] It is a big step. And I talked to a lot of people about it because everyone thinks, oh, it's really scary. There's never the right time to do it. I sort of thought when I was working at Lynn Franks and as I said, I ended up being managing director there at 27, 28, quite a young age. I didn't really know what I was doing if I look back on it, but I was learning on the spot. But I kind of learned not just what to do if I was going to set up my own business. I learned importantly what not to do and what I wouldn't do.

[00:01:53] And that gave me a lot of confidence to set up my own business. You know, and I did. And, you know, it was a kind of 2000 was a kind of weird year in that I sold out of the dot-com company that I got involved in and set up. Importantly, or probably most important thing in my life, I had twins in March of 2000. We ended up moving house twice, which is a pretty precious event. And then I set up a business in September. So it was never a good time to do anything.

[00:02:22] If you look back with Ironside, you know, rubbish timing, so much happening, stressful events and stuff like that, life changing events. And yet I set up the business there. But I didn't really think it was going to go wrong. I was confident I'd learned enough, as I said, about what to do and what not to do that I could always make a fist of it. And, you know, it all worked out pretty well. So obviously with Ironside, also a pretty good decision. So how did you talk to me a bit about the growth in the early years? Like, how did you get your first few clients through the door?

[00:02:48] Did it kind of grow really quickly or was it sort of more like slow and steady growth? It was pretty quick. I mean, and you see it in a lot of agencies, particularly in the PR area, in the PR market these days. And I look at them and they're doing the same sort of tricks that I deployed 25 years ago. Tricks, but good principles or good practice, I guess, in that, you know, you make a fuss about yourself. You celebrate all your wins in the trade media. You get a kind of buzz going.

[00:03:14] I mean, even easier now, you know, when I set the business up, there wasn't really such a thing as social media or LinkedIn didn't exist. We relied on the trade media. Now you've got LinkedIn as well, but really making a fuss about the agency, building up a bit of momentum and focusing on doing just brilliant work. And if I look back on that era, some of the campaigns that we were doing were daring to fold. We always had a reputation for being creative and we really pushed that to the limits.

[00:03:38] Growth was rapid and we went from zero to, you know, a few million in terms of revenue in five, six years. And then we obviously start to get some knocks on the door with people that are interested in buying that and adding it to their stable of things, but I'm a stable of agencies. But that was the exciting years. It was anything goes in terms of what you did. You know, I was always and I'd always been taught and I'd always learned and I was always very disciplined about how to make money out of that,

[00:04:08] because you get loads of great agencies, all this great work. And then you look under the bonnet and I did quite a lot because I get asked to look at a lot of agencies, you know, these days as well. And you look under the bonnet, they're not really making any money. And then, you know, you'd see them in the market. What a great, you know, buzz they've got about them and everyone's talking about them. And really, they're struggling to really make money. So that's important, particularly when it comes to selling your agents.

[00:04:33] It's not only about brilliant work and buzz that you create doing that, but it's about running a really good business. And I'd always been big on the back end and how we make money and having really good processes and systems work really closely with the head of finance, the finance director, putting in place good systems to make sure we were really making the most of the great work we were doing in terms of monetize. It's interesting, isn't it? Because often because I'm similar to you that I kind of get to look under the bonnet of lots of agencies as well,

[00:05:02] because, you know, we're pursuing this buy and build strategy. But often the agencies that you do hear a lot about are shouting a lot about themselves that are actually not doing that well. And the ones that are doing really well, they don't bother with that. You know, they're sort of just flying under the radar and just sort of getting on with what they're doing. So, yeah, I think it's possible to have both at that time.

[00:05:24] You know, and I think if you're looking to get acquired and I wasn't particularly looking to get acquired, but I but it doesn't do any harm when you're high ish in terms of your profile as an agency. And certainly that's what got people knocking on the door back in the day. And the first time around when I sold the business was was the consistent, I guess, around around the agency and it being the hot agency of its time and all that. And it's still independent as well, obviously. So therefore potentially available.

[00:05:52] So when did that first sale come about? The first sale was in October 2007. But the first knock on the door. It was good timing. It was, you know, it was lucky you got to be you need a bit of luck in this business as well, particularly when it comes to exits. And yeah, just like literally a month before the global financial crisis was christened the global financial crisis. Didn't have a name before that. It was just, you know, a sort of dodgy market. Like credit crunch. It sort of started out as a crunch. Credit crunch. Yeah, credit crunch.

[00:06:22] I mean, that all happened literally kicked off from sort of November. So it wasn't really a thing in October 2007. But we'd been, I guess, in play from about four or five. I remember 2004, 2005, but since we started doing good work and getting through the million, two million pound revenue barrier. I remember we had, you know, first up was Ogilvy and through WPP. And they were like courting me for a couple of years.

[00:06:47] They took me to a couple of events outside the UK to meet other Ogilvy agencies. And they kind of were really keen on integrating this in the WPP license. That was owned by Sorrel and was doing quite well in buying companies left, right and center. I didn't really know what to expect, but they never actually made an offer. It was really weird. It was like this real, I mean, it was actually a bit like I was with girls back in the day. I was pretty rubbish at that and that I could kind of go out with them. They were really nice guy.

[00:07:16] And I was never very good at going for the kill, so to speak. And they were like that with me. They were dancing around the handbags and they never actually made an offer. But I guess we were in play and other people were talking about it. And the first people, serious people to knock on the door were Preston, a public company run by a guy called Don Elgi and Barry Bryant, and it's still about in the market was the CFO. And they were a really good double act and running a big business and Preston were acquiring agencies.

[00:07:45] And they got in contact with me, I think probably via an intermediate actually, that they were using. And we met, we clicked, which is important in this process. And they made an offer and this was in 2006. And I loved the offer in terms of how it was made up, in terms of the multiple, in terms of the amount of cash and the amount of shares. And the public company, so they could offer some shares in that as well and did. And the whole earn out proposition.

[00:08:14] But I didn't feel it was the right time for Frank. At that moment in time, we hadn't quite hit the number that I wanted it to be a multiple of to kind of make it worthwhile. So I said to them, look, I said, look, if I come back in a year, I'm going to get to this number, which I think was about a million pound profit, just over a million pound profit. I'm going to get to that number and then will you keep the offer good? Can you keep it going for a year and will it still be in place? And they said, yes. So anyway, so I built a business, another year of business.

[00:08:43] And I did get up to that number. I think we were slightly above that number. I went back to the guys and I said, OK, is the offer still open? And they said, absolutely. They were good to their word. And we started on the process of selling Frank to Creston. And then I thought, oh, shit, kind of what do I do next? I'd kind of like manage this whole process myself. I hadn't had any outside advisors or sort of agreed a deal. I thought, you know, and what do I do now?

[00:09:09] I need to get some lawyers, some experts, some accountants, some people to help me through. Because there's going to be like a massive storm of paper and stuff happening now from now on. So I went to my wife, who was our head of finance at the time. And she'd been involved in the city. She knew this guy at KPMG, a guy called David Elms, who funnily enough, I bumped into the other day. But I haven't seen her in a while, but I bumped into him. And he was like the head of M&A at KPMG. So top, top guy.

[00:09:38] But I didn't need him to help me with M&A because I'd done that. I just needed him to help me with the process. So I went to see him. We kind of had a chat for an hour or two. And it was good. I thought, oh, I could really use him. It'd be very helpful. I'm helping with all the paperwork. That's in my corner, fighting for me. And he phoned up a few days later. He says, look, I just had seen an email overnight from our Australia office at KPMG Sydney office. And we got some clients coming into town next week.

[00:10:08] They're a big, inquisitive Australian marketing services group. They just want to meet some agencies. I know you're kind of doing, you know, sort of progressing this deal, but it does no harm if they, perhaps they were interested to have, you know, a couple of people in play. And so I said, all right. So we met for a coffee with these Australians the next week. They're called Photon. And I got on brilliantly with the guy that I met. A week later, the chairman and the CEO of Photon came over. I mean, they moved bloody quickly.

[00:10:36] And, and they made, they made literally got to know the business. We've had a couple of meetings in the space for a couple of days and they made an offer that, that from to the Preston offer by, you know, by a big tractor. And, and that was kind of how it happened. So it was lucky that as it happens, the Preston deal wouldn't have happened because Preston sort of then had gone off the boil a little bit. Cause they'd had a few problems in America. And I think they wants to pause the acquisition of Frank.

[00:11:06] So it all worked out. I mean, yeah, again, got a bit lucky and these Photon guys moved kind of super quick. And, you know, it was, and I think it still is one of the, you know, landmark deals that have been done. And I try and follow these acquisitions in terms of valuations and metrics, but it was, I don't know. I mean, they kind of come across probably more than me, but you know, for me, it was, was unbelievable. And it was life changing. So literally within a month, we've gone through the due diligence.

[00:11:35] We've gone through a bit of, you know, back and forth over the price, sorting out our numbers. And, you know, our, we're about just over three million pound revenue at that point in time. And our profit I remember was about 1.3 million and they bought us on an upfront basis of a six multiple to multiple of six. So plus the cash, all in cash, all upfront, plus the cash we had in the bank. We had some cash that we built up.

[00:12:02] I can't remember how much, but we built up, you know, decent amount of money in cash in the bank. And they paid it all upfront and we had a loan out. So that's what I'm saying was that it was a deal of, of, of unbelievable proportions. Then the deal they did because they were, they were growing. I mean, I've put it in context. It was before the, you know, credit crunch or the global financial crisis. They're a big acquisitive marketing services company from Australia who had got about 40 odd Australian and New Zealand agencies they bought.

[00:12:33] They were trying to go to America and done anything, but in the UK was their next big port call where they could buy agencies and they're English speaking. Obviously, literally they were looking at the, the, the list of independent league tables in different marketing services and then just contacting them. It wasn't, it wasn't, I don't think it was particular scientific approach to it, but you know, because we were one of the top independent fastest growing independent agency or whatever we were at that time, you know, we were on there.

[00:13:01] We became on their radar screen. So they must've been private equity backed if they, if they had, if they had cash. No, no, they were public. They were public company. Correct. They were traded on the, on the, on the, on the, on the Australian stock exchange and they were funded as well by a guy, uh, private equity, Reg Grundy, who was the guy behind Neighbours. Remember Neighbours, the TV show, the Aussie TV show. So it was his money that had started up, um, the business. So they had quite a lot of money.

[00:13:31] They probably had a bit of debt as well. Plus they had, you know, they, they were a bit of the darlings of the Australian stock market at that time because they were so gung ho. We're going to take on the world. You know, they were, you know, this little Australian business is going to go suck up every different agency out there. It was, and the chairman of the business, Skype, was, was, was brash and bold and brazen in terms of his message. So that's where they had that. Sounds strange from an Australian.

[00:13:59] That's where they had the money from. Uh, and, um, so they did the deal. So they paid the cash upfront and multiple of six of our profit. And then we had a deal whereby the faster we grew the business over the next four years, uh, we would get more. So, uh, again, I can't remember the exact metrics, but we had the compound annual growth. If it was over 10% and the multiple went seven over 15%, it went eight and then it topped at nine.

[00:14:30] Um, so what did I do? Well, you do the only thing you would do when you know that if you can, every pound that you make is going to be worth nine pounds a year, you actually go for it. Um, completely go for it. So for the next few years, you know, I went pedal to the metal on terms of growth, you know, I'd kill myself practically in terms of, you know, trying to grow that business. And we grew the business to about just over three and a half million pound profit.

[00:14:55] Um, after four years, uh, they ended up paying just over 20 million quid in total for the business because they were, you know, completely, you know, uncapped. We were earning, you know, we got, you know, I got a profit up to, to, yes, I said about 3 million. So nine times three was 27. That's what they'd already paid us. Um, you know, it started growing rapidly. So the serious numbers, I mean, it grew so well, they couldn't afford to pay it at the end.

[00:15:24] So they had a payment after year two, they paid us. Um, we'd had 15 million quid from them by year two. And then they owed about another 12 million as the final payment four years later, which they couldn't pay. Um, their business, by that time doing deals like they did with me were great for sellers, weren't so great for their business. And a few other agencies as well had knocked it out the park. There was another PR agent called Hotwire who was still going, who they did a deal with, also did very well.

[00:15:52] There was another agency called Naked who was a kind of marketing, you know, quite famous. So anyway, they did lots of these deals with lots of good agencies. And the problem for them was good agencies as well. And they ended up having to pay them lots of money because they'd had open ended air now, which no one does these deals now these days. You know, no one, these deals don't, you know, it shows you that things come around in cycles. Maybe in a few years you will have these sorts of deals again. Who knows? From 2007. Yeah.

[00:16:17] 2007 when I sold to 2011, which was our four years of our own out period. We flew. We just carried on that, that, that growth curve that I guess we've done for the first few years. We managed to keep it going for the best part of 10, 11 years. Really.

[00:16:35] I mean, it was hard, you know, and if I think about how hard I worked then, how hard everyone worked as a team, you know, it was, I don't know, it was probably 2007, 2001 wasn't an enjoyable time to be working the business because it was so, you know, it was so driven from a financial point of view. It wasn't, it's not like that at all now these days. Now we're completely driven by creative and having fun point of view.

[00:16:58] Not that I tried to stop having fun, but in those times, but personally I was driven by that because you had to be when you were given that, that target. I mean, who wouldn't be? Yeah. So, yeah. So they couldn't, they got to the end of the end and they couldn't pay up. Uh, and, um, after about a year or paid the final amount after about a year of haggling, cutting a very long story, very short, a, uh, gave me back 25% of the business for nothing. Really? Oh, really? It's kind of like a, it's kind of like offset payment.

[00:17:28] Only they didn't want to, and that was the kind of deal that I managed to do with them. Otherwise all sorts of things could have happened. It was all very friendly, but, and they wanted me to stay and carry on. Sometimes you get to the end of an earn out and they want the founder or the owners to get out because that's it. They will, you know, they want to do that. I think here they, they can never really get a head around our business.

[00:17:49] They realized it was a creative agency in a very unique culture, which is, that is, they couldn't, they would never be able to manage that as well as, you know, the founder or the founders and the team. So I did a deal with them in about 2012 by the time I'd finished it, um, for another 25% of the business. Um, with lots of protections in it for me so they couldn't touch the business or do a thing for the business without my approval. Kind of worked very, very well. It was a nice sort of, uh, existence together.

[00:18:18] And as I said, they were, they were good owners, good shareholders. I treated them with respect or be transparent with them, which I think is the right way to play these things. Um, and you know, do the right thing by them. And they were, you know, supportive and, and let me run the business. But to be honest, I'd probably run out steam a bit after, you know, after those years of growth, the business probably, you know, I'd squeeze the final pips out of that business in terms of profitability.

[00:18:44] And I guess from about 2012, 13, it's sort of never really reached those heights again in terms of profitability, which is unsurprising. Cause you know, we, we, we, we were, we were pushing ourselves really hard. Um, and then, and so that was the kind of first deal. And the bit of the second deal was the partial buyback, I guess, or that I didn't pay anything for it. Um, then by that 2017, I was, I was completely knackered.

[00:19:12] I actually had an L scare probably as a result of all that hard work. And, uh, as, as the Australian, the CEO at that time of, of an aero, they become photon. Then we'd write and play in aero. There's a CEO said to me once he said, he goes, he goes, Hey Brian, he goes, you've had a, you've had a tap on the shoulder from the man upstairs. Now, haven't you like that? Well, no, I did have a little, you know, kind of problem in my heart. Artery blocked artery, you know, and, uh, and I thought, okay, let's take time out.

[00:19:39] So I spent a couple of years on the golf course, which wasn't too bad a place to be. Uh, let the business get run by Alex and Andrew had also worked with me since the day one. And they were lovely guys, but neither of them were really none of the guys to run a business. They were good people to work with someone to run a business and lovely guys to work with. Couldn't really carry on the success. The business went a bit, a bit flat, started going down the hill a bit. Get to tell 2019, 20, COVID starting.

[00:20:08] The Australians are getting really worried. The business is flat. It's actually starting to lose money some months, which has never done before. It's actually the market. It's still good. Work's still good. But under the bonnet is, is a, is a disaster in terms of being able to make money out of it. That, you know, as I said, the brand presence was good and the work still good, but something wasn't right. Uh, in terms of, uh, the, the, the growth in profitability revenue was tracking down a bit as well. And I start thinking, I don't want it to go wrong.

[00:20:36] I got involved. The Australians said, GG, look at this business, you know, get off the golf course and have a look. And I got off the golf course and I kind of got my mojo back again. And because it was a completely different job before I'd grown a business from scratch to this kind of saw away success. Now I had to, uh, to kind of rescue it really, and, and turn around a ship that was slowly sinking.

[00:20:58] So, um, had to make a few changes, change the management team up, had to make some really hard decisions in terms of, uh, who to keep, uh, had to strip out a lot of things. And as I was getting more involved and COVID was hitting, the Australians were getting more and more nervous. And I thought, well, what's the point of me doing this for 25%? I kind of, you know, like, anyway, yeah, long story, very short.

[00:21:22] I said to the Australians, I said, look, we've had a great time together, but I'd like to get more involved in the business now. It's not doing well, as you know. And obviously I painted the picture. It's probably doing a bit worse than it really was. Or, um, and I said, look, you know, if you want to save this business, I'm happy to do it. Uh, if you don't, and I'm not going to do it and the business will go under. Um, so what do you want to do? Uh, anyway, then that kicked off a conversation whereby I bought out their 75%.

[00:21:50] Um, I didn't pay any money for it, which is, uh, kind of, uh, you know, was, it was a super deal. I, we had about a million pound in the bank and I said to them, you take out your 75%, leave me with the rest. And, um, let's, let's call it a day. And that was it. So we did that deal again. I make it sound a bit simpler than that. Whilst they were a public company, so it had to have a lot of layers of approval with them to sell an asset that they paid nearly 25 million quid for.

[00:22:17] Now they sold it for zero at the end, but they'd had a lot of money out of us because we'd obviously been generating. Well, yeah, that's my, I'm just trying to work out. Did they actually make back their, their initial investment? Probably. I never actually worked out. It's, it's kind of a good question, but I know I have always thought it, but I've always on the back of an envelope calculation. Yeah, we did well. You know, they bought from 2007. Okay. So it wasn't a disaster for them, but it wasn't like strategically, it, it didn't kind of go and make them loads more money on top. Correct.

[00:22:46] And I don't think, you know, we, we were always, you know, we went out of the sort of business that was, didn't have any aspirations to be a global business with offices in each country. We were a very, quite a unique business in terms of our attitude towards creativity and our culture. And it was quite hard to replicate that in other territories. So I did manage to do it in Australia for 10 years. We had a business in Australia, again, which was shut down when COVID started. Managed to do it in Australia, tried in America and failed to be honest. It was, it was, it was, was, was, was.

[00:23:16] Sorry, that business that you had in Australia though, was that, was that an office, a Frank office or was that a different office? It was a Frank office. It was helpful to have an Australian shareholder in terms of setting up, but I didn't do it because they were a shareholder. I did it actually because I had a really good Aussie girl working for me at the time who wants to go back to Australia. But, you know, as these things happen, certainly in our business, I kind of effectively backed her to set up the Frank Australia office out there. And then she left.

[00:23:44] Yeah, we did a very similar thing at my previous business, almost exactly the same. Yeah. And it worked well. Then she left, then it wasn't so good. And we got someone else in who did quite well, but not quite as well as her. And then we used it for about 10 years and made it tick. And we built up quite a good brand name out there and quite a good place in the market. We had COVID hit there, obviously. And then the lady that was running it told me she was going off to have a second baby. It was lovely. And I didn't really have anyone to replace her to come in.

[00:24:14] I couldn't, I'd always taken people from the UK and sort of like let them go out and work in Australia. But they couldn't get there because you weren't allowed in the country because of COVID. So I had no chance of really keeping that business going. So I just sort of gracefully bowed out of the Australian market. But again, that was one of the decisions at MBO time that I had to do. I had to be a bit much more, I guess, you know, I just had the business out and I just had to make more decisions.

[00:24:43] And some of the decisions weren't decisions I wanted to make, but I had to make light with the people we had to replace. And the agency had become very fat in certain areas. We'd had all these, you know, we had like a creative department and a planning department, all these divisions that weren't against really any income line that were kind of nice to have, but weren't really producing the goods, in my opinion. And we couldn't really need in the position we're in. And then I don't mind making decisions if they're the right decisions.

[00:25:12] The previous, you know, we spent a few years where we'd done badly, just not making any decisions. So I did the MBO in 2021. As I said, the valuation was nothing, but they just got their cash back. And now we add the cash in the business. But PR agencies, if they're doing well and we start to do well again, generate cash quite quickly. So, you know, I was prepared if I needed to, to put some of my own money in the business, if it needed for a cash flow point of view, as it happens, it didn't even need that.

[00:25:40] There were also the loans that you could have got at the time from the government. Remember that? None of all the, I can't remember what they call the C-bills, COVID business interruption loans, or whatever they had, C-bills they were called. You get that, so I was going to get one of those. As it happens, we didn't need it because the business was trading fine, you know, and generating cash. That was in 2021. Did that and then was really, and still am, to be honest, but really enjoyed getting back in the business.

[00:26:09] Different challenge, different objectives, built the business up again. And in 2024, again, fast forwarding a few years later, July 2024, sold the business again, this time to the employees, to an employee ownership trust. Okay. Frank PR is now owned by, 100% owned by its employees, and a vehicle called the Frank PR Employee Ownership Trust Limited, I think is what it's called. Yeah. Of which I'm a trustee.

[00:26:36] Margaret is, I had a finance and a trustee, and we have a kind of independent trustee as well, but called Andy Hart, who, because yeah, that's the setup you have to have. So, you know, in terms of an EOT, I don't know whether you're familiar with how those deals work. Yeah, no, I'm familiar with them a bit, but it would be interesting to hear about kind of the specifics of, I mean, my understanding is it's very tax efficient for the owner,

[00:27:02] and what I've heard is that it, you know, potentially has some issues for the employees. Not, well, I don't know. You tell me. You tell me kind of what your experience is. I guess there's a theoretical, there's a theory and there's a practice. Yes. I mean, ask your question, yes, from a seller's point of view, from a shareholder's point of view, it's incredibly tax efficient because there's no tax on it.

[00:27:24] So if you sell your shares to an employee ownership trust, you pay 0% tax on that amount of money. It's not so good from a seller's point of view because it's, you know, you can't get your money up front because it's unlikely that the business will be able to repay whatever you value your shares are on day one when you sell it. So, you know, for those two, three years after I bought it back, I was slowly building up the cash in the business.

[00:27:52] We weren't really taking tons of dividends out, although we were profitable and doing well. I'd rather keep the money in the business. And then when we sold to the EOT, there was, we built up quite a lot of cash. So, you know, quite a big amount could be paid out tax free on day one. And then you spend the next however many years it takes to generate the money back. You end up paying back the sellers. And again, all that money is tax free. So I don't draw dividends anymore out of the business.

[00:28:20] We get repayments from the EOT to the sellers. So it's very tax efficient. I think from an employee point of view, for me, I love this business. I'd started up and, you know, I was 59 the other week. So I'm not going to do this forever as much as I'd love to. It's not going to be possible to do it forever. And I just thought it was a lovely legacy to be able to say, you know, this is its next thing. We were owned by me originally and a couple of other shareholders.

[00:28:49] Then it was owned by this Australian company, public company for, you know, for the best part of 13 years. What next? I mean, then it was owned by me again. We became independent. You know, what next? I just thought it was always lovely for it to be, you know, a business that could have its employees deciding where it goes next. Now, if they want to, you know, they can sell it to someone else if they want to. That's completely up to them. But I've got to hand it over at some stage.

[00:29:15] And I thought it's lovely to be able to hand it over to the people that you do it with every day. You know, those three years that we'd spent turning the business around after the MBO and getting things back on track. I just felt it was lovely for the guys that had been part of that to, you know, ultimately get a reward. I mean, you know, so theoretically it's great. I mean, practically that reward really does come once the shareholders, me, Alex, have been paid back what we're owed.

[00:29:44] That's when that reward does come a bit further down the line. But, you know, they've already seen the reward already because what an EOT does allow you to do is to pay bonuses that are tax-free to staff. So, you know, there is a quick win for staff that even before they are getting the benefits of the dividends, if you like, of the business, they can get the benefits in bonuses that are tax-free in the meantime.

[00:30:10] So, we just paid out, you know, at the end of the last year, start of this year, we just paid out a nice chunk in bonuses to all the participants of the EOT that do that. You make your own rules as to how, by the way, people participate in the EOT. So, our rule was you have to be in a frank at least one year to be a participant in the EOT or a beneficiary is the actual term they use. And as soon as you leave, you cease to be a beneficiary. You know, the longer someone stays with you, the more they're going to benefit.

[00:30:39] And the way you calculate the beneficiaries' share, you have to do this from an HMRC point of view, beneficiaries, their amount, if you like, that they benefit, is calculated by their length of service multiplied by their salary band slash seniority. So, you know, the longer someone stays with this business, the more and more they're going to benefit out of it. And, you know, hopefully as the value increases, then, you know, that increases.

[00:31:04] So, to me, it was, you know, there was a theory and I love this theory and hopefully it comes into practice because these are the guys that made business successful again and they absolutely deserve to reap the rewards. That's amazing. It's brilliant. So, you mentioned some other shareholders there. Like, you've had a huge amount of different experiences throughout the last 25 years. Who else has been involved with the business? And I guess the other question is, like, what help and support have you had to make some of those decisions?

[00:31:34] In terms of the other shareholders, originally, the original founders of the business were myself. I was the majority shareholder. I had two other co-founders, a lady called Nadia and a guy called Andrew Block. And Andrew stayed with me for that until we got into all the difficulties that I explained in about 2017. So, Andrew's with the business 17, 18 years from the start. And the shareholders, since we did the NBA, I did that with Alex Gritt, who was the kind of other guy who'd been with the business.

[00:32:03] And I think he celebrates his 20th anniversary on Valentine's Day. He always reminds me it's Valentine's Day because he kind of always says that's the day that the love of Fed again. Oh, that's some schmaltzy stuff that he does like to come up with. But he's the other shareholder in the business now in terms of, well, he's not the shareholder in the business, but the other shareholder that's sold to the EOT. As I said, now the business is 100%. So, those have been, you know, Alex, Andrew have been key partners.

[00:32:31] We had a fantastic MD for a number of years, a lady called Frankie Corrie, who worked with me and has worked for lots of good agencies before and a couple of good agencies since. And she was, in my opinion, a massive part of the growth of that agency. We accelerated time, that 2007 to 11. A lot of, you know, a lot of that success was thanks to her input as well. You know, I could finance people along the way.

[00:33:01] And I've always worked very closely with the finance people to make sure that, you know, we're making profit from every possible place that you can. There's always been a really good back-end business philosophy to the business in terms of how we maximize things. We're no charge by time. So, a lot of other agencies had always done that. And that was one of the things I always insisted and did when I set up the business was everyone charged by the hour, hourly rates and all that sort of stuff. And when I said that, Frank, I bucked the trend quite a lot and had to fight quite a lot of battles because we had no hourly rates.

[00:33:30] We had no blended rates. We had no day rates. Whatever it was, we just used to, you know, charge clients by value, I guess. And it's become now trendy to be called things like value pricing. I never called it that. We just kind of called, you know, charge what we think the client could afford and what we kind of thought we were worth. It was something like that. Our business was based on coming up with a great idea. And if it took you 10 minutes to come up with a great idea, it didn't mean that that was worth 10 minutes of your time.

[00:33:58] So, I was always insistent that we'd, you know, try and still come up with a great idea in 10 minutes because then that would be a very profitable way to do stuff. And the better ideas that you came up with, the easier they were to implement. So many agencies spent loads of time with phone bashing, just ringing up journalists, trying to send in stories or just spent loads and loads of time doing the admin of the stuff. And just wanted to do things as efficiently and quickly as possible because that would be more profitable. So, that was the kind of business model and the philosophy in it.

[00:34:25] It's kind of pretty much still the same today, actually, as well. But a lot of agencies don't charge by hours. A lot of agencies are dropping over the years. Okay. And so, for you now, now that you have sold it again, you're obviously still involved in the day-to-day. But where do you kind of, where do you see the next few years? What are your plans? My plans are still, I do three days a week. So, I kind of, you know, I have done since I bought it.

[00:34:51] And when I said, when I did the MBO, I didn't want to go back in full-on five days a week. I've been there, seen there, done that and loved it. And I needed a different way. So, I've had to reprogram myself from being, you know, kind of someone that was all over everything and thinking about it the whole time and, you know, obsessed with it into, I'd have to change. And I'm a very all-or-nothing guy. So, it's been quite hard for me to reboot myself in that. But I've managed to do that. So, and I love it. I have to say, I enjoy it. I love it. I, you know, I work three days a week.

[00:35:20] I work very closely with Alex. We've got a lovely other managing partner, a lady called Melissa Robinson. You know, we work very closely together. I've got a fantastic senior management team. So, I genuinely probably enjoy it more than I actually have enjoyed it at any time in the incarnation of the business. And I feel lucky that at my age, I can still be, you know, having an input. And I get involved in the strategy, creative, planning side of things.

[00:35:47] A lot of new business related or new brief related. And I love that. You know, I'm a creative guy at heart. So, I love trying to get under the skin of a brief and working with, you know, our teams to try and come up with a program of activity and campaigns on those nuggets of ideas. Hopefully, that win us the business and win us some awards and do a brilliant job for clients. I love that. And I know I work very closely with the head of finance, Margaret, in terms of the running the business and how we're doing and planning.

[00:36:15] And what we need to do with the business and stuff like that. We're doing a couple of things this year, which is kind of just starting a couple of new things within the business, which are under wraps at the moment, which I'm trying to spearhead and drive through and make happen. So, I kind of sit in that box that Alex and Melissa do everything that's urgent. And I do the stuff that's important but not quite as urgent. And, you know, you can do that classic square box of where you spend your time. And, you know, I guess for 17 years, I spent my time in doing stuff that wasn't very important. It was really bloody urgent.

[00:36:45] Now I spend my time in the box that obviously isn't as urgent, but it's really bloody important. And that's why Alex and Melissa are in the urgent quadrant the whole time. And it works well. And as I said, I enjoy it. I feel it's a gift to still be in this industry, still active and contributing at my age. And now I see how long I can carry on. But I've got no plans to stop just yet. And you mentioned you're sort of looking at some other agencies.

[00:37:14] Are you consulting or are you kind of looking? Yeah, I get asked. When I kind of had that downside, when I spent a couple of years, a few years on the golf course and sort of fell out of love. And with Frank, I'd sort of 15, 2016, 17, 18, that period. I started doing all this advisory work. And you see loads of everyone's an advisor these days. But I kind of was doing that before everyone became an advisor. And I sort of did that. You know what? I didn't love it.

[00:37:43] So I just love being in an office with people and working and focused on something. I guess I didn't love advising lots of companies. And I'd still do it now for just people that I really like or I learn from. So there's a couple of businesses I still do it for. And to be honest, I didn't even probably know. But I learn more from them than they probably learn from me or easily as much. And they're people whose energy I love. That's who I kind of work with nowadays on, you know, maybe my spare day a week.

[00:38:14] And the other day a week, I like to play a bit of golf. So a lot of golf, actually. So that's kind of how I do it. Yeah, I remember that. No, no. Three days a week at Frank, full on. And I probably do more in three days now, people will say, than I did in five days before. Much more focused. A day a week on the golf course. Had a day a week. Bit of advisory work. But, you know, family stuff. You know, elderly in-laws, elderly mother. Kind of lots of admin that goes with that. You know, so that's kind of it. And finally got my balance right, I think, hopefully. Amazing. All right.

[00:38:44] Well, that's a great place to wrap it up. So, yeah. Thank you very much. Thank you very much for listening to the Exit Plan podcast. If you enjoyed it, please leave us a review to help other people find us. If you would like your question answered in M&A Q&A, or are wondering what's next for you and your business and want to chat about an exit plan, drop me an email on barnaby at foxcogroup.com or get in touch with me on LinkedIn. See you next time. Bye. Bye.