Podcast Transcript

[00:00:40] Sean: G’day everyone, and welcome to the ScaleUps Podcast where we help first time Founders learn the secrets of scaling so they can make bigger decisions with more confidence and maximise the value and impact that they can create in the world. And I'm your host, Sean Steele and my guest today. I'm very excited to have Brad Beer on, from BMT Tax Depreciation. How are you, Brad?

[00:00:59] Brad: Great Sean, and great to be here. Thanks for having me.  

[00:01:02] Sean: I'm very excited to have this conversation. You know from our conversations offline, that I'm a bit of a passionate property investor. And so, I feel like I've had Brad Beer in my life for quite a long period of time, because if I was to go through my inbox for the last, I don't know, 15 years, I'd have a lot of BMT emails in there.

[00:01:23] Brad: There's also a person behind them, not just the email, and you know, 24 years I've been at BMT. So, I've been getting them for a  

[00:01:32] Sean: Indeed, mate. Nah, it's been great and I've connected with many members of your team. And so, for those of you who aren't familiar with BMT, I'll just give a quick bit of an overview. So, if I've got this right, branded the business kicked off in 97, so that'd be 25 years this year. Is that right? You having a bit of a party?

[00:01:49] Brad: Yes, that's 25. So, I started a year later, but yes. it kicked off in 97.  

[00:01:54] Sean: All right. And so, you were a quantity surveyor for BMT in 98, and you became a Director and a shareholder four years later in 2002. So, that would be 20 years ago, I guess, this year. And then you became CEO of the business 7 years ago in 2015. And so BMT, for those who don't know the brand, BMT helps residential investors and commercial owners claim maximum property deductions, I guess is probably the key focus. So, you're actually Quantity Surveyor. You specialise in Tax Depreciation schedules, and you've now got staff in every state, right? So, you cover the whole nation?

[00:02:30] Brad: Yeah, we staff all of the place, there is about 180 of them at the moment. And need a few more at the moment, actually.  

[00:02:39] Sean: Oh, you’re recruiting. Okay. We'll have to put the seek out link at the end of the Podcast. So, do you truly go everywhere? Is there anywhere in Australia that your team doesn't go, like, what about the sort of remote parts of WA or NT, like, what happens when you get a call from there?

[00:02:55] Brad: So, we go everywhere. I mean, we need to make it viable in some way to get this. So, if you are in like, I mean, examples of the Port Hedland, Kalgoorlie, these are areas that we don't go to every week. But we do get to them, because I mean, if there's any one property and it's 20,000 kilometres from anything, then I'm sorry, unless you pay me heaps of money, I’m probably not coming there because I got to cover the guys, but we just put a bunch of jobs together in those distance areas. We always do them with our own guys and girls, our own staff. And so, when someone tells you where the suburb is, and you hear that pause, you know it's probably a long way away, and we explain. And the thing about it is they’re then understanding, they realise they're a long way away. They want to get professional jobs done by people that are experts in fields. There's not one in that area, they realise that sometimes they've got a wait, and we’re getting by with that and they’re understanding most of the time.

[00:03:54] Sean: I'm sure they’re used to it. I'm sure actually, pray Google that was, that sound of the pause would have been somebody grabbing a stack of Gregory's and trying to pull it out and going; “Where where's the Suburb?” Probably a bit faster these days. And so, how many depreciation schedules would your team have done now? Because you've got 180 team members. That's quite a lot.

[00:04:11] Brad: We have, and obviously, you know, we didn't do many of them the start per year. We've done over 750,000 of them, not quite 800,000, somewhere in between this, you know, we've seen a few houses.

[00:04:28] Sean: Learned a thing or two after doing the same thing 700,000 times, I reckon.

[00:04:33] Brad: Yes. And our best ever year was just under 70,000 in one year. So, that's a fair for few depreciation.  

[00:04:41] Sean: Absolutely. And would BMT be number one by a long way? Like who's the sort of number one, what's the closest competitor in terms of size, like in terms of scalability?

[00:04:52] Brad: Look, there's no exact knowledge on that because we don't have some way that everyone shares their numbers.  

[00:04:58] Sean: Of course. Yeah.

[00:04:58] Brad: I do have a pretty good idea. And it's probably about a fifth the number of us. It could be a quarter if they've been doing lately, but it's roughly those sort of numbers. So, we hold about half of the market share is probably the case. And so, yeah, few of them. It's very cottage, lots of operators that do a few, and we sort of gone in and obviously done a lot more.

[00:05:28] Sean: And when you, I mean, was there a…do you remember there being a moment in time where you guys “We have to be number one.” I mean, many people will have heard the I guess the sort of old adage of, you know, "Well, if you're not going to be number one or two in your market, then don't bother. Like, you're just going to be out competed. You can end up with skinny margin. You're not going to get any advantages.” Like how important was being number one to BMT. And was it a very conscious thing to just sort of evolve that way?

[00:05:53] Brad: Well, I think, because the numbers aren't shared around our industry that necessarily, we started in saying that I came in a year later, but with the guys that became my partners, we went in, you know, we just were trying to grow each year, I think. You know, the first year they didn't turn over enough money to pay anybody. And the second year I was actually still at uni, and I think it was about 5x, then 3x, then 3x again, and we were just in there having a solid crack growing and working hard. And in reference to your question, I think, I remember I'd probably, I'll say 7-8 years in going to meet who we thought was the biggest competitor and it might have been 10 years in and having a discussion and we didn't really know how many jobs I did, and then there was all a discussion with an old gentleman. He's a lovely guy about how he liked to maybe merge, teach us a thing or two, and then he tells us how many jobs he did. And I'm like; “Oh, that's disappointing.” It was less than us. And he'd been doing this for 30 years. I did it for six or something, you know? So, then I don't think there was a conscious point or moment, but then we realised we had traction and we'll talk about growth and non-growth, I suppose at some point I'd love to Sean, but for nearly 20 years I had a business that grew every single year without fail. And it was growth on growth and we don't have a recurring revenue. So, on the 1st of July, you know, I get another guy comes back if he buys another property, but the one property is done and its projected, you don't pay me again next year. So, I always say, it's like the 1st of July, we start again. So, we have to go and get what we got last year and grow on top of that. One off jobs, obviously, you know, same referrals do come back when they buy more properties or the account refers again, if we do a good job, but they're not forced to, and they don't need to pay for the same thing again next year, like insurance or other things in relation to your property.

[00:08:06] Sean: I understand the business model very well. Having spent a long time in education and the vast majority in non-recurring revenue models. So yeah, it was always a “Okay, great. We might've got 30 million last year, but how do we get that? We have to get that same 30 million from somebody else. And then we're still going to grow on top of that.” Yeah, it's a …

[00:08:21] Brad: Yeah. It's a challenge, but bring it on, I say.  

[00:08:26] Sean: Yeah. And so, I'm interested in the number one position. I mean, that's number one leader by quite a margin. What practical benefits do you think have occurred to you by being number one?

[00:08:40] Brad: Well, as we’ve grown, I guess. You know, if you looked at some of the reasons behind growth, and there's lots of things that we can talk to around that. But if I looked at one of the very simple things that I remember sitting through a presentation probably 20 years ago or more now, where someone said; You need to innovate and blow them away. So, if you look at those two things, we need to be ahead. We need to innovate. We need to be faster. We need to be better. We need to be more digital in some way. And also, blow them away. We need fantastic client experiences, especially when I operate completely on referrals. You don't have to come and pay me next year. I need to fund another one of you, right. In order to do those things well, we were able to, based on scale, have some money to spend on developing IT services. I had internal IT guys, I think the first one started the best part of 20 years ago when we're a fairly small business, it was a big step, but then having large IT teams, building things that help us to do things quicker, easier, we get these quantum leaps when they build some particular IT thing that saves us one minute per job. It makes a difference. Now, without, I guess our size it's hard to do that from an innovation point of view, from the client experience point of view, I get to spread it across more jobs. And therefore, I'm able to, I guess, spend a bit on making sure that we can be at the front and we can be the best that someone in this industry can be. We can be ahead of the research the most, and we can spend some things, we don't build a system and then use it. We continually evolve it and how do we make it better? And we also get to do a lot of, I mean, I'm a big believer in measuring everything to the T, if we don't measure it or that doesn't get done or it doesn't get managed. And my managers of teams will always say, don’t bring Brad a number, unless you bring same this month, last month, same month last year, year to date last year, and it's pink if it's nice, or green if it's good and pink if it's gone backwards, we’re either getting better or why not. Better, faster, more conversion or whatever it is, in pretty much all aspects of that business when we can.  

[00:11:03] Sean: Well, you've you sort of alluded to my next question, because there are elements to two of my next questions. One, which is about differentiation and the other one, which is about technology and not necessarily the same thing, but of course one might play a part and the other. How has the business thought about differentiation, and I noticed that you have a bit of a brand promise as well. Can you talk to me a bit about sort of differentiation and brand promise and how you've tried to carve out a stronger space for yourselves?

[00:11:28] Brad: Yeah. And look, differentiation. I suppose, on brand promise, that's pretty simple, double the fair, it’s free guarantee, I think is what you're referring to. Like as far as doing what we do well, we are there to find tax deductions. If we don't find tax deductions, then you shouldn't pay us any money. Right? And with a bit of a look at a property based on a few questions, we can work out whether it's worth it. And then from there, given that we've done 750 plus thousand of these things, I should be able to work out whether it's worth it. And I should back my choice on that based on the minimal information that I do have at my fault, like we can see photos of the property, usually, a bit of information, a few questions, are we going to get enough out of it? If we're not, we get it wrong. We'll give you back your money and we'll move on in life. I'd like to work that out as soon as possible, not when I'm finished the job. Of course, and sometimes we give the money back, but we've got to back ourselves, I suppose, is the thing there. And I guess the differentiation thing, that's given that, in my space, we've all got the same rules. We've got tax rules and quantity surveying is measuring and counting bricks and costs estimating. You've got to learn first how to do that right. And do it perfectly. Make sure you apply every rule the way you can to maximise that conduction and do a job thoroughly. Thorough is the word I use regularly. What's different with thorough. I don't care. I'm not the cheapest guy. I don't cut anything out of the process. I don't try to do it without going to site. I don't try to cut a corner. We charge what we do charge in order to make sure we get it right. You're a property investor, you're after money, you'd want to get the maximum deductions. You don't want to get in trouble with the tax office. So, making sure we're actually thorough in what we do is important. The differentiation factors. How do I do that? I employ my own staff to go to site. I make sure they're trying to pick up everything. I go to site all the time. I don't; uh, I can measure it off the plans, maybe. And there's a few changes in the last few years that means that could be easier, but it's not getting everything.

[00:13:40] Sean: Do a lot of competitors do that? Do it sort of virtually or don't attend site?

[00:13:44] Brad: Since COVID, because it’s pretty hard to go to site. I'm not going to say it was fun trying to hold the line and make sure we get everything a hundred percent. We had to ring lots of clients and say; I'm sorry, you know, locked down again. And say we can't do your job, but we want it properly and maximize your deduction. Do you want to wait a little bit more time so we can get it done right, and get more money for you? Or do you want to a half job? So, through COVID, there's always been some that, and you know what? I can make an estimate based on some photos as well. Will it be as good? Most of the time, no. Will I get everything in a hundred thousand jobs we did since the changes in lockdown that we assessed, based on those whole hundred thousand, not a sample of that we visited, we found that 66% of the time, they've had some sort of renovation that can qualify for deductions. If I did it off the original information for some other time, I would miss that. And because we still visited them, we know that we get those deductions, and the client gets more money and they just have to wait a little while and it made my job a whole lot harder or our jobs. So, making sure that we're getting everything has been important to us all the time, through COVID rather than being, one out of five quantity surveyors, your ring will say, maybe would I need an inspection? it's probably more like three out of five now, because it was easier, but we won't get the same result and I have more data on that than anybody else does because I've still been visiting them through that process. Now, I guess, from an innovation point of view, also from a point of difference, we've tried to build things over time that make it easy. I know I'm making things easy as what's been a big part of how we've taken the, I guess or taken or helped to create the market share. Because before we were around, the accountant maybe that needs to refer and get this, it may have been hard, it may have been slow, it may have been, who do we get to do this? We went in and produced good experiences, so that the client, I guess the accountant has a comfort that they get those reports from BMT. They're good. They've learned how to do them properly. And then after that, things like portals that allow them to be easily see all of their client’s stuff that we've built, update reports. Like I sit around and spend my time wondering how I can make depreciation easier for accountants and clients. And. I guess some of those things that we've applied forever and like, how do we make the experiences better? Those are the things that we try to make as points of difference in a world where we have the same rules as everybody else, as far as, how something should we do. We’ve got to learn how to apply them and make sure we do them well

[00:16:38] Sean: And do you feel like the, you know, some services businesses end up implementing technology to enable a better customer experience and then some use technology to sort of lead. They almost become sort of technology-led services, businesses as opposed to services-led technology businesses. How do you think about the business in terms of where tech sits in the mix now?

[00:17:00] Brad: I think that the technology needs to be something that helps us to do it quicker, faster, better, more quality assurance, et cetera, but it also needs to enhance the client's experience with your business. And I think, and this could be a bit rough, but I think so many boardroom’s tables, there is technology implemented in business that's only about the bottom line or only about ease for us. And I think that is lost to the consumers so badly, as a consumer in the world, not just in the property space. In general. Simple things like, I don't know, the coffee shop that I have an account at last week, put a new system in because it's all whatever. I used to go on there. I had four numbers I had to remember and say it’s…thanks Brad. Now I have a 10-digit number to try to remember each time and it's too much. So, I have to pay every time. It's not a major issue, but that piece of technology probably might be easier for them, but I want to buy my coffee somewhere else.  

[00:17:56] Sean: Yep.

[00:17:57] Brad: And I think that that gets lost a lot on like, you know, it might start with going towards the consumer. But I think it often ends up the other way and we've got to run businesses and work out and make them work in this technology world as well. But you know, we can't lose sight of the client experience or we will lose as businesses owners.  

[00:18:18] Sean: And so Brad, over this period of time and we'll talk about the challenges the last couple of years, which weren't obviously just COVID related. You had some big legislative changes that have been swiping through the Australia investment property market. But your trajectory will never have been linear, you know, it's going to have, you know, like everybody's trajectory. I'm sure when you spread it out on a graph and you take it over a long period of time, it looks usually nice and smooth. And like a fast-growing curve, but then when you zoom in, it's like just a set of jagged peaks and troughs, you know, where you have good periods that grows really fast when it goes backwards and up and down and up and down. When you think about some of the things that have really changed the trajectory, you know, decisions, mindsets, investments that you've made, things that are fundamentally shifted the way the business has been able to grow, how quickly it was able to grow, what are some of those things been?

[00:19:12] Brad: So, we’ve done growth on growth up until the legislation change we talking about. Every year. And I look at a graph of that growth some years, a bit quicker. And I guess, if I looked at the GFC would be one challenge I suppose, that we faced. We went through the GFC. We looked at, you know, it was all a bit scary. The world was having financial ruin and we're at a property-related business. The US wasn't doing too well with that. And things like that that could be impacting. We cut expenses to the bone. We worked hard, we didn't cut marketing expenses or business development expenses, and we did one of our best years. We hurt for it because we didn't really have enough people to do it, but it’s, we're going to take this on, and we meant to say, it was one of best years, one of our good percentage growth years with the people we had, and even probably quite good in profits because we didn't have enough people to do it so we all just worked hard and everyone was a bit concerned through that time. So, we did that. I'd have to say that in the early days, the way we grew our business was actually largely through education and creating a market. And it's all… so when we started doing depreciation, it was what we’ve done a lot of over the time is education. I go out and talk to people about tax depreciation and this deduction and the real estate industry, this deduction you can get. And most investors aren't doing it properly. Some of our research shows 80% aren’t maximising the deduction. So, there's the deduction there. There's a government rule that says you can claim it and you leave it on the table for whatever reason. You don't know, you think you've got a good accountant. You think it's too old, you listen to the guy at the pub that told you that. And there was a market that wasn't tapped. Now the accountants know, they knew what was there, maybe didn't know some of the rules as well as they should. And was scared of where to go. So, we went out to the consumer via the real estate industry into the accounts to say, “We're here to do it. There's deductions there that you're missing out on. How about we give you an idea of how much that might be and see if you can go and get something back from the tax office. You can come backline for two years if you've been missing out.” So we went, we didn't take out market share from someone else, we helped to create it, I suppose. So, I guess the market was there, but no one was really doing it because they hadn't really educated the people that it was there, I suppose, because we relate to new buildings that are being built and sold to investors or by investors and transactions of properties between to an investor. So, the transactions are important to us. Back in those days, we had the benefit of finding another accountant who then trusts us and referring us next year, and on the back of when the properties do boom or the investment market booze, you know, back in the days, 45 for 50% of the transactions went to investors, geez, I remember those days. And then there was a lot of opportunity out there. And as we grew and got accountants to trust us and told investors they should stop leaving their money at the tax office for those guys to spend, because I think we like it better. Then we continued to grow through that period of time. As we've gotten bigger, our numbers each year become closer to the number of transactions that happen. And, you know, you start to get towards that, I guess, saturation of that market, and then you back into, like a lot of our growth was making the market saturated, growth gets harder for us as the market got saturated by us, effectively.  

[00:23:14] Sean: Yeah. Brought for your own back.

[00:23:16] Brad: I think the there's certain points where we went from an IT perspective. Like sometimes the IT department over the years feels like the black hole while they build stuff and then they do something and it says five minutes per job. And you go, wow, that's awesome. Look how much quicker we can. So, we can scale up without having to throw ridiculous numbers of people like that. And way own a smaller IT team at the moment, continue to work on the ways and innovate to make sure that we can do something that enhances the client experience or makes it quicker for us to do it. One of those two things.  

[00:23:51] Sean: I love that. And those people go, oh wow, five minutes. Surely that's not really game-changing. Or when you're trying to scale a services business, there's a few things, right. One, you have to do it with quality every single time, otherwise your brand is going to suffer pretty quickly. And you've just talked about a whole bunch of ways that you've continued to focus on the innovation and the client experience to ensure that quality is there every time. And then two, that internal efficiency, as a second point in time, I remember in having large scale contact centres for salespeople. And I remember I sat down and I sat beside them for a couple of days and just watched everything that they did, just because I was like, you know, we could be focusing on conversion rates and leads and blah, blah, blah, but I know this is not efficient. And I just watched for a couple of days and I was literally sitting there with a pen and paper and I was counting how many minutes were happening in between the calls and what was happening after the calls. And what I discovered was, in it must've been 60% of the time, you're leaving a voicemail, and I was like; well, that's a really massive waste of about, probably two minutes per call. And so, we automated personalised voicemails so that it came from the person that was their voice and so on, but that was just a standardised sort of format, which we didn't need to do anything more clever than that. And then it was reducing that time in between those two calls. It wasn't actually trying to improve the time on the phone, we could help them in the same amount of hours with having to work a single extra minute in the day, get connected to a hell of a lot more calls by reducing all of this time. Okay, which screen are they looking at and why do they go to that location and what are they doing in that one? And how do we make that part faster? And it was incredible how big the impact was to your point without having to just throw more warm bodies at the…

[00:25:31] Brad: And we do. we've had our IT people sit next to someone who's actually doing exactly what you're saying.

[00:25:42] Sean: You got to do that.

[00:25:43] Brad: And go, is there anything you can automate in this process? And look you think back, I mean, you know, I remember the days where we had the guys in Perth would go to the site, take photos and then they'd send back their notes and their photo card, and they get lost at the mail after the time or take two weeks to get here. Like we built an app where the guy has gone through site and hits the button down and everything is downloaded, including the number of square meters in the house, straight into the job where it's got to go. Like all those things just to eventually, I guess, save time I also take away mistakes a lot of the time, like anything that we can do that stops a human making a typo, it means less times we get a report back and someone says, how did you get a $200,000 air conditioner? Well, someone put a couple extra few dollars. We build enough things to make sure that doesn't happen. But in the past that was more able to happen because we didn't have as many controls around that, that we can. Like our IT systems and our people sitting beside them and can actually help a lot of our quality assurance process because are they going back to check if you've spelt the name properly. If the street name only comes from where the straight name is come from and it doesn't get a real address automatically by IPI, you can't stuff it up because it wouldn't work, but it’d say it's not a real street. So, it's been interesting, really interesting to watch that, I guess, more of that change over time in the way we did it, and as I talk here, I think of the wise I did stuff. I used to drive out the road to buy a report and lick a stamp, you know, anyway,  

[00:27:22] Sean: We innovate, we progressed on. Brad, for the first, um, I guess 13 years of this business, you weren't the CEO, but you were a Director and a shareholder, in the last seven you've been CEO. What's been the most difficult time you've faced as the CEO of the company in the last seven years.

[00:27:39] Brad: So, I probably had, I think I was a managing director for about 4 or 5 years before that, because my other two partners had got less involved in the business, but the most challenging point without question has to be, a federal budget change in 20017, when the government said, while I'm at a budget night on a table, because there was negative gearing on the table from the opposition at the time. And the coalition was that we're not touching negative gearing and negative gearing changing for our business, let's help them think about the data of what probably investors look like. In their wisdom, they decided to change legislation around what plant equipment items can be claimed or not claimed in a really unusual why that doesn't make a lot of sense that meant, I guess, that market for depreciation schedules, there's now a certain percentage of them that might not be worth it. There's still a lot that are so obviously we're still here. But I had to go back. If I said we grew out our business by, through education and telling people about something they didn't know about, the headline from that thing was, we're getting rid of the travel allowances, which is the one everyone remembered. And also, yeah, we got rid of depreciation on second hand plant equipment items. So, then people just heard we got rid of depreciation and then I'll be having those things that you guys still do that, are you still around? I feel like I went back 15 years in my education of investors and the property industry, the real estate industry, and even some accountants that just heard that as well.

So, also the number of jobs available, people get scared when things change. And even though they probably still need this report because they bought the property last year, they still get scared because everything is negative. And we had to then go from that May announcement to November, it took them to finalise the legislation. I mean, what are we doing with that jobs in between when we're still up in the air? We could be doing them all wrong based on the final legislation, because all we've got is the basic stuff and the draft. So, that was a big challenge. We then had to rebuild and spend a lot of time, I guess IT-wise  because we did such build such great coded systems. And it wasn't a simple Excel spreadsheet anymore. You've got to go ready to build it based on, and we did legislation changes in bits, but that was a big change, complete change of the reports. How are we doing? Are we even doing them right for all that period of time? For ones that have changed after the day or that have exchanged after that date. And then, you know, there's a few years there of re-educated. And if I was starting a business then, and trying to grow, that would have been okay. But I remember I have to maintain…the one July, I'll start again with a new set of rules and lots of people scared and less transactions that have it available. So, declining revenues. I had to learn how to run that over the next three years, a business that declined in revenue and in our best year I said we did about just under 70,000 residential depreciation schedules and then over three years that dropped to the early forties, thousands, and stabilised and back to some growth with a bit of COVID whack as you get to the end of the one whack you've already had, that was basically the substantial change. Think of that as less number of depreciation schedules. How do we rebuild, re-educate with less people because we've got declining revenue because there's less jobs to do? And so, you know, come out with a few battle scars probably, but a few more from COVID on the way, but that was a very, not that I wanted again, but it was a very good learning curve for me and my executive team. Two of them have been with me for 21 and 20 year or 19 and whatever, it is about 20 years each. So, we got back in the trench, and we learnt a lot, which has been great. But yes, that legislation change with the long answer would probably be my single biggest challenge.

[00:32:01] Sean: What advice did you get in that time? You know, because usually in these times where the, you know, there's a bit of a cross this happening and you know, that could be considered almost close to existential, you know, that's a 50% drop over a number of years and that's a huge change to all of your IT systems, off 40%. There you go. Naturally in those kinds of environments, you tend to look for, you either tend to look internally to things that worked in the past or to principals that have held you really from that you're going to return to, or you look for sort of external advice from mentors or people who've been through it before. Where did you go and what did you end up hanging on to that really helped you get through that period in being able to lead the business through?

[00:32:42] Brad: Having been in business for a period of time. There are probably a bunch of people around me that I now trust, have business discussions with. I don't have a specific mentor, I have a group of CEO that I get together with on a regular basis every month or so that we can talk about issues, they were helpful. I've got an exec team that's been working together for 20 years that are all very different, the three of us. And so, you know, we had some very interesting times on what do we do about this? What do we do about that? And at the end of the day, we had to get to the bottom of what the rules were, rebuild what we do and we still have a market of depreciation schedules that slightly shrunk, and so if the pie is shrunk a bit, I just need a bit more of it now. And so, there's a few people I leaned on through that absolutely. I would say from a leaning on people perspective, the pandemic is probably almost worse though because there was so much, like at the end of the day, that changed some legislation. We can't change that. We'll go to get on with the job. The pandemic had so much uncertainty in relation to it, that we have another lockdown, we're out of control of these things, how bad could it get, how many people could, and you know, how do I make sure none of my stuff gets subjected, especially in the early days, subjected to COVID be on my way. They’re going to people’s houses. So, I probably found some of those things harder because, I guess. And lockdowns in this country and lots of painful things. As much as we don't like some of the decisions our politicians have made and, you know, we seem to fight between states, which is a bit embarrassing, but anyway, they also had some pretty hard decisions and they’re dealing with people’s lives. And that is probably the much harder part, especially through those early times. And also, you know, transactions dried up to investors, substantially down to about 23% of the transactions or something early in that. So, we had another lack of transactions that existed the going to investors, my market shrunk as well at the same time. So, you sort of sitting there going, we can't do our jobs, we’re locked down. I've got all this. I've got a hundred and whatever it was staff at the time, 170 or whatever. We've got to pay them. We don't get job keep, because I think we dropped 27% in that night in our revenue, which is just fantastic. And sign that we moved the cost base. We worked together where we reduce people's hours. We got people that could do a different job. You know, we had to ring up every inspection that we had organised and cancel and reorganise it again, didn’t we. By the way that's not good for profits doing the same job, two, three or four times when you get charged $700 and you do a piece of it three times, you should only have to do once. None of those things are great in that respect, but we kind through that quite well and I feel pretty positive, like positive towards our decisions in relation to protecting our staff. Did we make the most money we could have through that time? No, but I think we still did all right considering, and we got the team to reduce hours and things. It was like, let's get in this together. And we most of the way did that fairly well, and not perfectly, you know, hindsight's wonderful. I go back and change some things now, but with whatever information was with us at the time, we needed to make the best decision we can with that information. There's more information that we need to be I guess agile enough to make another decision, even if that's on the top of the last one. And if that change is going to get more information, I'm not scared of that. And, you know, I use the word nimble sometimes that's what I get laughed at for, and we need to be nimble as a large business like a small business, and be able to change our mind on things because we've got better information and maybe make a better decision.  

[00:36:54] Sean: Yeah, which absolutely gets harder as the business gets bigger. And you and your team has been there through quite a lot during that period, how do you think. Oh, okay. I don't want to say the words, the other side of COVID. I'm not quite there. It seems like … But at least on the other side of the the last couple of rounds of COVID, your team has been through a lot. They've been through probably a rebalancing of the business. They've been through stuff where they haven't been able to get out and see customers. They've seen a shrinking of the market, there may be regrowing of the market. So, they've been through a lot together. How has that impacted culture? Like what are the positive things the team has taken out of that? Do they seem now sort of more battle-hardy? Are they more closely connected? Like how has it impacted the team and the culture?

[00:37:44] Brad: I feel negatively, would be my answer to that. You know, I don't know that the team, and I'll say the wider team, like my exec team, we’re close than ever, you know, we're wearing a trench together with some tough decisions and tough things to do, like, you know, up until then the number of redundancies I've done in this business the whole time was counted on one hand, and we had to do a few, and had to go through those processes. Don't like that. And across the board, would I say the culture has been impacted in a negative way based on the last period of time? Yes. And part of that is, I've had to make some hard decisions because we need to be strong enough to operate and have enough cash to pay the people that got something to do. Tough decisions had to be made. So, negative, I don't think like, obviously we've had to shift everybody to working from home. Some people like it, some people don't, without that debate do I think that's good for culture in general? No. We've transitioned backwards and forwards. You know, some people like to, and some people don't like to work from home, as far as good things for people around people, I think there's a lot of negatives to working from home. I'm not completely against working from home. I don't like it personally that much. We're not allowing everybody to work from home full time unless they've got COVID or contact, or in isolation, I don't know if they have another different rules as to whether they can.  

[00:39:19] Sean: A full matrix, don't you of every stage.

[00:39:22] Brad: I get another email from HR with the new rules, where do I have to wear mask, where do I not wear a mask? I don't even know anywhere anymore. We're still wearing them in our office if you're not sitting at your desk. So, we've always gone above the rules of the state that we've been allowed to try to be a bit safer, I suppose, which is one way for me to, I guess, look at the culture and morale as best we can, being, let's try to protect our people. They are number one. Look, I've had probably worse percentage of staff turnover of late, and we're on the back of between legislation change and that pandemic and few other things, you know, you've got to try and keep your wages at reasonable levels. And that's hard, especially in a lot of current markets where we haven't had immigration for a period of time. I don’t think I’m the only business owners saying it's a little hard to get started at the moment. I've got 25 odd available positions in my organisation at the moment on a staff by 180. And so that's a challenge. I try to get through the jobs. But in looking at next year, I'm also adding some additional ones to that for growth, because we've got more transactions coming and we'd like to take it on here where we can. And, if the transaction numbers are there and where we're not the fastest as good as we've been all of our times because of lacking staff and pandemics. And it's not all my fault. But the BMT that got to where it is, we've sorted out some of those difficulties, it's been hard to be as good as we've ever been. We're recognising that, we're coming through that while we're in the rolling into a busy part of the year. We will get to the end of that, and I will take it on harder and make sure we adjust to get the people we need to do adjust. And that will be a bit of an exercise, that might be expensive, but that's okay. I've done it before, been through some hard times like those before, if the transactions are there, the pie gets bigger. I also want a bit more of it, I suppose, on the other side.  

[00:41:36] Sean: Yeah. Geez. What a journey for your team. And when you think back on this journey as a CEO of this organisation, Brad, you've been part of for such a long time, what are you proudest of?

[00:41:52] Brad: I got to a Christmas party. And I look at the number of people that we employ, when I say the families, even though they don’t come to the Christmas parties anymore because it's too big, we can’t find anywhere to fit us all that's that easy or not cost inhibitive. And see, I guess the impact that we've had on so many people's lives and we do, we've given a job, it's been pretty secure on the way through until some really hard times. Well, I mean, we do let golf people if we decide to part ways on the ways through, of course, but we've always been able to maintain paying them all the time, giving them a job, supporting them with their families as best we can while running a business. And I guess my answer is my people probably, I look at some people that started with me X number of years ago as not knowing how to do anything that have done well in life in some way. And that doesn't just mean financially. They've got come from, you know, they've come out of school, or whatever they've done in the past. They might not be the top of the class. They might not be whatever, but we've got them, they've gone through degrees with us. They've got good at that. They're good at something in an organisation and I feel like they're a different person and maybe my organisation and I had some impact on that, I suppose. AI mean, the people would be the biggest, you know, it's been great learning curve familiar as well. I was the first staff member in this business. I didn't own it. Didn't start it. Came in soon and I've learnt so much on the way, how to grow a business out of, you know, rather a shrinking one, slightly tricky one.

[00:43:32] Sean: Well, fundamentally you would have had to have continued to level up yourself, to be able to manage and lead a growing organisation. You know, having a business that's got 5 staff to a business has got 180 staff is a very different leadership job. You have to let a hell of a lot and continue to put yourself out of that comfort zone so that you're in a learning space because otherwise the business stops growing because you stop growing.

[00:43:55] Brad: Yeah. And sometimes I guess, Yeah, you are exactly right. To read, understand, learn, put people around you that know how to do things better than you do as best you can so that you actually get somewhere. And one thing that's been, I guess, pretty important is we've got 3 in an exec team and I may be the boss, but we don't just do everything I want to do. The only time I'll get to make a decision is when they don't want to. Otherwise, we battle out what's best for the business with three very different people and that's a big positive, you know, so, I've enjoyed working around those people as well. And I've got a lot of support around from an industry point of view with people that we do work with or don't work with that have done things that I just try to make sure most of my time is spent outside with clients that I can also learn from, I suppose, clients and referral partners.  

[00:44:53] Sean: So, where do you hope then, Brad, the business will be in three years. I mean, obviously we've been in a very uncertain time and we're still in an uncertain time, but you know, hopefully borders are starting to open back up. We're starting to get, you know, I think there's a bit of sort of tail wind at the moment it feels like in the majority of ways, but what are you hoping the business looks like in three years from now?

[00:45:15] Brad: So, after these couple of things that have been dealt to us, we took that drop, we stabilised and we've actually gone okay through pandemic, some rough times on the way, we need to reset or re-align to make sure we're doing a lot of the things as good as we did before we dealt those challenges. the way got there and got to where we are in the first place and having to, I guess, the market share, et cetera. I've got a bit of work to do on that. That's not three years of work. And I guess, the increasing transactions giving me some comfort in spending a bit on that, probably more than I have in the last three or four years. And so we'll do that. That is I guess, that's not foreign to me and my team, it's just trying to make the right decision at the right time so we get a result, I suppose. And then look, our commercial numbers have had fantastic growth over the last little while. Love to see that continue. It's not, I mean, there's not as many transactions around in non-residential stuff. We still do quite good numbers, like to continue that good growth path. Otherwise, I am going to get to a point with this business as the transactions get to a level and with the changes to legislation that there's only a certain number of depreciation changes I can do. I can’t have a 100% of the market. Growth becomes harder, or probably started to, and then the market shrunk, I suppose. Hence, we shrunk a bit along with it. Now, I think, understanding of that, that probably we started looking at a few years ago, the other things that we can do alongside this, things that don't damage our brand. We don't have conflicts with the channels outside of just doing depreciation schedules. I like doing those, but we can do those, we started showing up a few years ago with some additional management structure in order to keep that to hum along and run as a business with the involvement and look at the other things that we would like to do alongside that. We've been slowed down on that trajectory and the next three to five years, what are those things and let's get moving on them, is what I'd love to do the most.  

[00:47:44] Sean: Yeah, I love that, it continues your innovate or die, like, as you said, unfortunately there is a limit to the market and the amount of that market you can have, but that doesn't have to be that your growth is limited, but it does require some innovation and new thinking and …

[00:47:59] Brad: And it needs to be like, you know, if you had every lone in Australia as a lender, you can't grow. Right?

[00:48:06] Sean: Yep.

[00:48:07] Brad: You've just got to work out the other things that fit alongside that and fit with our business end. You know, there's a few changes afoot that, but we've been in the spot way of conduct comes through a lot of this with some back to growth position. So, I can have a bit more confidence on spending into the future, I suppose. You know, there's a bit of making sure that you can get through uncertain times with pandemics running around the world and, you know, wars breaking out and, you know, it's been interesting.

[00:48:40] Sean: It's keeping you on your toes, mate. Well, I've got one last question for you, Brad. And I ask every Founder or CEO this question, and I want you to go sort of right out, we are out at three years. I want you to go much further out into the future, right out to your, I guess your yearning years, for want of a better words, you know, a bit more grey hair, you've done all the business building that you wanted to do, you've created the impact that you really want it to have in your business career. And you've got the CEO of the global largest community of first time Founders, you know, people who haven't done what they've done before. So, they haven't built a business bigger than one they're in, they're all super hungry and keen to get those real gems from Founders or CEOs who've really been able to take a business and scale it. And she asks you to finish this sentence. She says; what are the three things Above All Else that you've got to get right as a Founder or CEO, if you want to scale your business? What would be those three things for you that you must get right?

[00:49:35] Brad: Three things must get right to scale? To me, the simplest business plan I have, it's almost just my business plan. It's not quite, but it's a little bit difficult. It comes down to Four words, Define, Refine, Validate, Replicate. That's what we've done in our business. Go learn to do a good depreciation schedule. Get better at it. Make sure it makes profits, so you can do it and then do heaps of them.

[00:50:22] Sean: I love that.

[00:50:23] Brad: So, Brad Beer has a very simple business plan. Look, and this is probably not a scale thing. This is a say you’re balanced in your life thing. My family is very important to me. I have four little kids that are seven down to less than one. And if I look at my life from what I grew up, I grew up in a house with np money, you didn't ask for stuff. You know, dad wasn’t a let go, mum didn't work, four kids in the country town. My mates is still my mates from then, and I think the things that are important to you and need to remind important to you and not change those things. I could probably scale up without doing those things, I suppose. So maybe that's not a good answer for this, but if you lose sight of the of who you are, you won't be real anymore. And I think I'm still very real in relation to the mates, yeah, drink nice wine and I go to better restaurants than I never knew existed when I was 15 years old, I suppose. But I still think that I've got a lot of similarities and traits that are still the same me in some ways, even though, you know, obviously you have to change in order to do some things to do things, but I don't think the core has changed too much, I suppose. So, the simple business plan that balance, and I guess that one word is Balance, and balancing the family. Three, looking after your people. The people are the asset in the business. I'm pretty good at pounding the pavement, and I'm pretty good at being liked by people and people often buy depreciation schedules from me because we do them well, but I can't beat a whole bunch of people. I can't be 20 guys on the phone, asking the same question. They're the people that make this business happen. If I don't look after those properly, then you won't have a business and you'll have a job and you'll have something very different. So how do you share with them? How do you make sure that they're happy and delivering the experiences that you need to in order to have this successful business, and helping me with that simple business plan. They're very long answers, but that's one of those.  

[00:52:39] Sean: That's perfect. Thank you so much, Brad. You know, Brad, I'd love to acknowledge the way that you've. I mean, the way that you talk about the business, I've heard you on podcasts and stuff over years, and I've always felt that authenticity from you in terms of the way you engage with the business, the sort of the humanity that exists in this business and that's existed in the culture. And I really appreciate the way that you've been, you've shared with us the challenges that the business has been through because it's very easy for people to sort of just bait and you know, we’re the biggest and where the best, but actually it's been a real journey, both for you and the other Founders and the business and your people. But what I think is not lost on me is the simplicity of that business plan. As you said, if people are trying to build, particularly those people trying to build a services organisation, the Define the Refine, the Validate and then Replicate. We had a similar founder not long ago on the podcast. Marc Meili who built ProTech to 4,000 staff. And it was just as simple a business plan, you know, all my customers care about is having the highest quality person rock up on their site every day. So, you know, they re-engineered the entire business to make sure that happened every single time, just another services business, but super simple business plan but for exactly the same purpose and the same concept. So, I think there's a lot for people to learn in that. And so, I really appreciate your time today. Brad, that's been super. Folks, I'm sure you've got a huge amount of value from the time you've had with Brad. Brad, how should people get in touch or follow along with what BMT is doing if they kind of want to stay engaged?

[00:54:16] Brad: Look, my website has got information, we’re here talk to us about things, you know, how social media has got its things you do, but, you know, I don’t know, the website is about depreciation. It was not necessarily about the journey, you know, Podcasts and things like this are quite different to most of the things I do because I'm normally the depreciation expert. But I like this, I like these things because they also make you go back and think about the previous years. And you know, you look at some of the things that you've done. You also think about how you got there and it makes you rethink your plan going forward a little bit, you know, so it's been good.  

[00:55:03] Sean: Well, thanks for reflecting collaboratively with us today, Brad. Folks, before you go, if you've enjoyed today, which I'm sure you will, a big thanks to Brad Beer from BMT. You can jump on the www.ScaleUpsPodcast.com website. If you want to drop your email, you'll find out about episodes, about to come up if you subscribe. And of course, like or write us a review, our team would absolutely love that. It helps it get into the hands of more people and helps other people get the learnings that you just heard Brad share into new hands. If you like the socials, you can find us on all the socials are on @ScaleUpsPodcast on pretty much anything you'd like, except Twitter. Just can’t get my head around Twitter. Just don't love it enough to spend any time there. And so to everybody listening today, let's just remember one thing before you go today, as you think about Brad's journey. There's been a time here where actually Brad's team could have just packed it in because it got really hard. And it's very easy to want to get off the train when things are getting hard when you're in the scale up process. And the one thing you can guarantee is that if you give up, that's the absolutely only way that you can guarantee that you won't be able to scale up is by giving up. So, you've got to stay unshakable in your faith that you're going to get there. You've got to continue to adapt and evolve, and you know, let's not use the word pivot. But just stay engaged and keep moving, and remain flexible in your approach. You've been listening to the ScaleUps Podcast. I'm your host, Sean Steele. Look forward to speaking again next week. Thank you so much, Brad.

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