Qantas Talking Business is an Inflight Entertainment radio program, hosted by Alan Kohler. Each month business leaders, entrepreneurs, and innovators are interviewed about their expertise, business, and careers.

How Kerry Boulton’s The Exit Strategy Group Started

The business officially started in 2012. However, decades before that, Kerry had been looking at the whole notion of a business exit. The Exit Strategy Group is her fifth reinvention.

Back in the late ‘80s, Kerry was the first female general manager for Mayne Nickless. She bought the international freight forwarding business out as a management buyer. It was her first time to think about exit strategies as she sought investors to buy the business. The plan was to exit the business between the 5- and 10-year mark. They achieved it at the 9-year mark.

In 1996, Kerry got into business coaching, which she did for 9 years, well before it became the flavour of the month throughout the 2000s.

She and her husband then got involved in a very successful real estate agency, which they sold in 2007.

Kerry then focused her time on family, looked after the kids as they went through secondary school and university. Then her husband got cancer. Having seen through all that, Kerry realised how important it is for business owners to have contingencies around those things.

For Kerry’s fifth reinvention, Kerry decided to do something, to give back. She’d already been heavily involved with community, with a local South Melbourne district sports club.

Kerry didn’t want to reinvent the wheel. She wanted to see what was going on out there. What she learned was that there are about 2.5 million private business owners in Australia. Of those, around 1.4 million are baby boomers. She saw that it was the biggest transition of wealth that was actually going to happen over the next 10 years, and that it was basically a 19-year trend. The first baby boomers turned 65 in 2011 and the peak is 2028 when there will be about 8,000 people a week to turn 65. That’s an enormous wave of baby-boomer business owners coming through who are going to have to exit their business.

The word “exit” is a bit like an elephant in the room because it sounds so final. But there’s quite a few different ways that you can transition from your business. It is fortunate that Kerry learnt the need to have an exit strategy; most people don’t start their businesses with that notion in mind. The sad statistics show only 20% of businesses that actually go on market for sale will in fact sell. Even if you have a really good, strong, viable business, it may still not sell if you haven’t actually managed it for sale.

How Do You Manage A Business For Sale?

Generally speaking, most people have actually managed the business for profit rather than for building value. That’s great because we all need to be rewarded and we do take the profits out of it. But managing it for full value means looking at it slightly longer term. If you look at your business the way a buyer might look at it and say, “Well, what am I buying into? How transferable is what I do?”

A lot of it is in people’s heads. They haven’t actually taken the time to really structure properly with systems and documented processes. And that’s not difficult these days with the technologies that we have available. We’re not talking about things like 20 years ago when you had to have reams of paper with manuals. We’re talking about understanding how reliant the business is on you or any of your customers.

The business has to operate without you as the business owner. This is possible if you give yourself enough time and actually start to structure the business for future sale. It doesn’t mean, though, that every business is going to be sold. You might actually have someone in the business, just like Kerry did as a management buyer, that may actually buy the business out. You probably won’t get the most in terms of dollars out of the business from that type of sale, but that is a viable way of actually unlocking the wealth that you have in the business.

Another potential, of course, is private equity. This is taking in an investor who can guide you and help you create a much bigger business.

How Does Kerry Charge Her Clients?

There is an upfront fee of A$3,500, which would be for an evaluation. Kerry gets a benchmark valuation, not a formal one, as to what you think the value of the business might be. She will take a look at how ready you are for an exit as well as have the business be ready for it.

Kerry would then help the business owners through the full stage if that’s what they’d like to have. This involves taking a look at what the gaps are in terms of value and what they need to do to be able to close those gaps. For this, Kerry takes a monthly fee.

Should the client want Kerry to take them through the exit, Kerry takes a percentage. But she’d work hand-in-glove with the right party, whichever that might be. Part of the process is strategically thinking about who might buy the business, where 1 + 1 doesn’t equal 2, but rather 1 + 1 equals 5. That’s a strategic sale and that’s going to be worth a lot more.

Since Kerry is not a licensed broker, she doesn’t get involved in brokering the transaction. But she will certainly help facilitate the process.

Kerry’s New Book, Million Dollar Pay Day

Published in 2017, Kerry’s latest book is called Million Dollar Pay Day: How To Get Rich And Get Out… Creating The Perfect Exit Strategy and Life After Business.

In it, Kerry takes you through understanding what the drivers are in your business, to make sure you get an idea of what your business is currently worth. She lets you give yourself enough time to rearrange what you’re doing because not every business is ready for sale.

To quote Kerry Packer: “Always have your business ready for sale because you’ll never know when the Alan Bond is going to come along in your life.” And you usually only get one Alan Bond in a lifestyle. So the key is making sure your business is always ready for transition. And then it’s about thinking about life after business, because life without purpose is no life. You need to avoid suddenly going, “What am I going to do now?”

Kerry helps people with that. You can have so many cups of coffee, play so many games of golf, go traveling for a little while as it’s important to be able to decompress for a length of time. But then what’s next after that? Kerry’s book also takes you through giving some conscious effort into creating a life after business.