We recently sat down with Reckon CEO Sam Allert to have a chat about some recent events at Reckon, approaches to selling a business, sharpening your business strategy, and how to invest fresh capital for growth.
Hey Sam, can you tell us a little about how you started at Reckon and your trajectory to CEO?
After filling numerous roles while working in London in my youth, I returned to Australian shores and landed myself a really mixed role with APS, a software startup serving accounting firms.
Back then, there were just six people at APS, and I wore as many hats as possible, including answering the phones when necessary.
When APS was acquired by Reckon many years later, and became part of Reckon’s Accounting Division, I worked my way up through increasingly senior sales and management roles all the way to the CEO of Reckon.
There’s no question that I was in the right place at the right time, but I think jumping in when required has certainly helped my success. I also believe that fortune requires the right attitude, and I think that kind of eagerness — to go outside your role — is key to success in any vocation.
The advice I got from an old mentor was ‘if you want more, then do more’. It’s not rocket science really – work hard, support people, listen, care, strive, and success will follow.
Reckon recently sold its accountants division to focus on small businesses, can you talk about your approach to selling a business?
Oddly, we weren’t actually looking to sell the accountants division at all. We met with Access as we were interested in their business, and they came back and offered to buy our Accountant’s division instead, in a ‘win-win’ scenario.
One, they would offer a very reasonable valuation of the accountant’s division. Two, they would take care of our valued customers. And three, we would be able to channel energy and capital straight into Reckon’s small business division.
In terms of approaching a business sale, I would tell other businesses of all sizes to ‘be clear on your goals and your strategy’, as both underpin almost any business decision you can think of. Write that one down.
So, if you want to sell your small business, first, find a specialist advisor to help you tidy the books and neatly package the business for sale. That part is simple enough.
In the meantime, run your business as though you want to keep it for life. Put some love into it. If you run a brilliant business, and a tight ship, the value of your business becomes immediately apparent to investors or prospective buyers.
It’s a bit like selling a house. If you maintain the property with love and care, as your pride and joy, before thinking about selling, the value is clear for all to see. If you let the house dilapidate by letting the grass grow and the walls get moldy, the value is not obvious at all.
What were the key realisations that led you to focus on creating software for small businesses and to know that catering for the small business audience, was the right thing?
To get straight to the point – the small business market is our origin, it’s our core, and it’s how we got started. Greg Wilkinson, our founder, started the business by serving small businesses. It’s our heritage in a sense and it’s integral to our longstanding DNA.
Although our products evolved over time and we got into the game of ‘software for accountants’, we’re now back to having a tight focus on small business again, and really playing to our strengths.
This should be the same for any small businesses out there. Staying true to your core offering is good advice for growing your business. Don’t get lost in the weeds – continually remind yourself of why you started your business in the first place and who your audience is. Never lose sight of that.
Let’s say you started a business shaping and selling surfboards. Don’t get too mired in the nitty gritty of business ownership – just keep listening to your customers and keep shaping the best boards possible. Test them, ask for feedback, continually improve, and keep the fire stoked. Success should follow.
Why are you so passionate about helping small businesses?
Small businesses are the backbone of the economy. If you look at the GDP they bring in and the amount of people they employ, there’s no greater group of people driving the economy forward than small businesses.
The other thing I love about small businesses is that they’re raw and they have tangible ups and downs. You could be at a BBQ and be chatting to a mate about their business and you’ll notice an enthusiasm and zeal in the way they talk about it.
It’s almost like chatting to them about sport or a hobby. It’s really infectious. Most small business owners absolutely love what they do.
What would you say to other businesses who are looking to refocus their strategy or shift their business model?
Begin with the end in mind. It may sound simple, but you can’t just eke along and allow your environment to shape you. You must be crystal clear in what you want to look like and exactly what services you offer.
I really like to think about this in terms of what your ‘perfect week’ looks like. Picture your perfect work week and then match your plan to it.
If you’re a plumber, do you want to be the tools from 8am -6pm every day? Or do you want to have three plumbers under you, giving you a great return? Or perhaps your perfect week is being half on the tools and half reliant on employing others?
Design your perfect week and work backwards from there and your business model and strategy should be clear. The rest is the nuts and bolts of revenue, cash flow and profitability.
What lessons have you learnt about investing capital for growth that smaller businesses might learn from?
Let’s say your small business has pursued and received a fresh business loan or secured some capital from an investor. If you don’t have a very strict understanding of what you intend to achieve with that capital, you’re going to take that capital and its going to be gone in a flash.
Capital is only as good as your plan and model. I think the biggest risk is jumping at capital because you want a ‘float’, but you haven’t actually mapped out how it will contribute to growth – you need a vision.
Imagine you have a dry-cleaning business. You could sit there and say, ‘if we were able to clean our shirts 10% faster, we could take on more business and make better profits.’ So, the thing you might want to buy is a newer and faster machine. That’s investing capital properly because it’s linked to a smart strategy.
The thinking shouldn’t be ‘I want a new machine because it’s the latest thing and I think it would make my life easier.’ Now, that’s ok, but I think it’s much better to say ‘a new machine will give us capacity to make more revenue and that revenue will link back to my goal’.
Remember that cash is a critical part of being able to execute on your strategy – so you need to be goal oriented with any cash injection.
