Welcome to the #CriticalFewActions™ to Improve Your Business podcast. I’m John Downes and I’m here to help you cut through the overwhelm and prioritise what matters most to improve your business. Let’s get started and discover the #CriticalFewActions™ that have the biggest impact.

John Downes: Today I’d like to introduce you to Charles Pratt, [00:00:30] who I met in my 2024 CEO Masterclass in strategic planning and implementation. He is the CEO of Kinder Australia, a 40-year-old mining services business that has recently been acquired by private equity.

Over the last year, I’ve been watching with admiration as Charles navigated the challenges and issues of presenting a business for sale and then negotiating for a successful completion in a way that all shareholders while positioning the business for future success.

Charles, [00:01:00] welcome

Charles Pratt: Good morning, John. Special to be with you.

John Downes: and it’s fantastic to see you down by the seaside. It looks like the Mornington Peninsula to.

Charles Pratt: It is, it’s a, it’s a lovely place and, and it’s my happy place. I’m very lucky today. There’s no wind.

John Downes: Isn’t it Fantastic. So Charles, whilst we’re gonna talk about in the insider’s view of selling to private equity, that journey didn’t start in the last 18 months. It’s a journey that started over five years ago when the founders realised that they needed to prepare the family business [00:01:30] for exit. So tell me a little bit about Charles Pratt and how you came into the business and then ultimately became CEO.

Charles Pratt: Yeah. Thanks John, that journey, uh, began all the way back in 2004, after I finished studying engineering. And,it’s the, the one and only job I’ve had in the industry, so to speak. And,I started off as a sales engineer and I was given a company car and basically told, here’s your box of tricks, and, off you go and see how you go.

And it’s been a, a [00:02:00] mammoth journey. It’s been. So exciting. very rewarding. I love the place, I love the products and, love the industry. So I’ve had a, had a great time and had, lots of success along the way.

John Downes: So what, what sort of products were you selling at the time?

Charles Pratt: Yeah, so I still remember it was, uh,a little, uh, one of those silver Bunnings boxes that Neil gave me, and it used to fall apart on the Convey belt when you arrivedat an airport terminal. and it was full of, some plastic conveyor rollers, we had, some innovative skirting [00:02:30] designs,

we had some, brush cleaning products and and some spiral rollers.

John Downes: Okay,

Charles Pratt: And Charles, when your founders decided to prepare for exit. They did a couple of very smart things. The first was to promote you to CEO from a sales role, but what else did they do that set the business up for success?

So they were very, uh, you know, forward thinking, people, both Neil and Christine and, uh, they recognised that to be able to [00:03:00] successfully sell the business, they needed to, first of all, exit themselves from the business and in, in effect, make themselves redundant.

John Downes: Hmm.

Charles Pratt: you know, that’s, that’s a, I think that’s a challenging process for anybody to go through, especially when you’re so passionate about the business that you’ve created, and, and worked so hard to develop.

But it was successful. And, and I’ll never forget, Neil Kinder always said to me that the ultimate sale that we will make one day is selling the business. We, we achieved that finally.

John Downes: it’ll be their biggest [00:03:30] single asset sale. No doubt.

Charles Pratt: That’s right. I was telling, Hui, our project engineer, that unfortunately he’s been, surpassed in the, the order book value of project sales.

John Downes: Okay, so you trumped him completely. Not that you,

Charles Pratt: We trumped him. So he is got, he’s got a high bar now.

John Downes: Not that you are competitive, so. And I remember you saying something about, you know, one of the things that, um, that happened when you were made CEO is that, that, uh, despite the fact that you’d been such a successful person in, um,engineering [00:04:00] sales, that you’re actually forbidden from participating in sales.

Charles Pratt: And,I, I struggled with it,because,I love it. I love talking to people. I love, I love sales. I’ve been in sales my whole life. ever since I could walk or talk, I think I was selling something. and I found that tough and I, and I, but I don’t think I’m ever gonna let that go. And,you know, I’m mindful of the fact that I think the intentions were good.

I, I don’t, I think they recognized very good at sales, but they. Also what they wanted me to do was, was focus on the bigger [00:04:30] picture, which is what they had to do, is what Neil Kinder did when he employed me, 20 years ago. He was the face of the company. He was the salesperson of the company, and he recognised that he needed to back in 2004, focus on the brand and the structure of the business.

And the marketing of the business that he was always very passionate about, but he was a little bit hamstrung by being the salesperson, driving around, promoting the products. So there was a transition from [00:05:00] Neil to myself. and the transition now needs to, the baton needs to be passed to the next, the next team.

but I’m gonna be a CEO with dirty hands on. I’m back out in the field. And, I think to strike a balance is, I, I never wanna lose that. I love it too much. And that’s where the innovation comes from. If you don’t, if you don’t see the problems, talk to the customers and, and play with the, the products and all the conveyors, you, you are not gonna be able to innovate.

You can’t innovate behind a desk.

John Downes: You’ve gotta be in front of the customer. You’ve gotta see [00:05:30] and love their problems as much as they do. You know, I think this really shows some, some great foresight and business acumen for, for Neil and Christine to start this transition really early because it created a track record for the business being completely independent of its founders when it ultimately came for the sale on that.

Is actually one of the things that actually makes it saleable In the meantime, they earned well as you traded the business exit ready, as I call it for many years. Tell me what were some of the things that you put in place that [00:06:00] really helped lift the performance of the business during your last five years?

Charles Pratt: So our focus on innovation and, and when I, when I talk about innovation, I’m not just talking about from an engineering standpoint. Talking about in innovation across the business. Now that might be within our SAP ERP system. It might be within our accounts department or our warehouse department. we, we never wanted to focus on what everybody else was doing.

I don’t believe that’s sustainable. It’s a very quick race to the bottom if you do that. [00:06:30] And that didn’t, that’s not something we started five years ago. That’s something we started 40 years ago. bringing technology to the market. and you know, outperforming our competitors. And you can only do that if you’ve got something unique, different value adding.

so that’s where the focus has been, and I believe that has, enabled us to, you know, have a, a future sustainable, secure, recurring revenue stream, which enables a, a, you know, a, a great secure place of employment for all our people.

John Downes: [00:07:00] Yeah. And, and as a business, Kinder performs with a high EBITDA compared to most medium sized businesses in the market, and, you know, that’s a real testament to what you’ve achieved. Well done.

Charles Pratt: Yeah, I was a bit surprised. I was somewhat insulated, you know, working in the same company for 20 years. You, you don’t, you don’t really get to see,the other, the other side of the fence. but when you, when you are. selling a company, you do, you do learn, learn more about what, the average EBIT does are, and, yeah.

So we, we, we do perform [00:07:30] very well.

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John Downes: So before we get onto the, uh, decision to put the business onto the market, um, you’ve been in the CEO masterclass, over the last 10 months. Tell me how have you found it and how has it helped you?

Charles Pratt: Well, it’s, uh, it’s been awesome. Absolutely love working with you, John. and, uh,I remember our introduction,we hit it off, very quickly, it’s, it’s been an awesome journey and, and I was in a position whereby, We had lots of, lots of things happening and, [00:08:30] never forget you saying when we first started the CEO course, in, in the first introductory meeting, you mentioned that you would encourage us all to just turn up rock up. Uh, no matter how busy you are, we’ve all got a lot on our plate. but if you turn up, things will happen and that’s.

John Downes: how we actually met.And how has the masterclass helped you develop as a CEO?

Charles Pratt: Yeah, so. at Kinder, before meeting you, John, we’ve, we’ve developed our own strategic plan each year for, for more than 10 years. we meet together as a [00:09:00] company, and come up with the plan. We’ve used external facilitators to help, manage that process.

and so it was fascinating to learn another, method of creating and implementing a strategic plan. it’s amazing. You know, there are so many ways you can skin a cat and, um,I, I love participating in programs like this because it does, it does enable you to remove yourself from inside your business.

Take yourself outside, look back in, and you can be critical, [00:09:30] of, of your own place, and yourself and the way you operate and you learn, you meet a lot of other people with lots of other wonderful ideas. So that’s, that’s a real benefit.

John Downes: Hmm. and you assessed the business using the organisation performance and value diagnostic. While you were going through the, sales process, how did you find that, and what was the most important insight you took away from the OPV?

Charles Pratt: Yeah. So I found that most fascinating,difference. I recognised very quickly that, the journey that you took [00:10:00] us on, was almost in a reverse way compared to our own. So, we worked out where we wanted to be down the road and then figure out how we were gonna get there, and,you know.

You’re always talking about, well, how are we gonna celebrate little Johnny’s birthday and how are we gonna do it? What’s that gonna look like? and that was quite different to how we conducted our own strategic plan. And, I won’t forget the picture of, a horse looking back? And that is so important. I can look back now [00:10:30] retrospectively, that Our own strategic plans were fantastic. There was, there was posters. The, process was great. What we didn’t do as well in the past was the implementation of the strategic plan and making sure, that we met monthly and, and followed up on the actions.

So, your process helped us to formalise that.

John Downes: Fantastic.

So tell me about the decision to put Kinder on the market.

Charles Pratt: it was Neil and Neil and [00:11:00] Christine’s decision. I’ve been a shareholder since 2009, uh, minority shareholder and, Neil tapped me on the shoulder, possibly two years ago and, and said, we’re gonna sell the company. And I wasn’t surprised by that at all. none of us are gonna get out of here alive and, and you can’t take, you can’t take some things with you. and I always knew that, that ultimately we would sell the company. It was not so, it was not a shock. Not a surprise. I couldn’t afford to buy it, however, it was too big. [00:11:30] and so I remember Neil saying to me, Are you surprised? And I said, no, I’m not. I’m not, not at all.

So that was, that was an interesting day. Yeah.

John Downes: And tell me about the sales process. How did you manage that process? Did you use advisors, and how did you navigate that? How long did it take?

Charles Pratt: Yeah. We, we used our, uh,external accounting firm. And, and we set up a, an advisory board. And, as CEO reported to the advisory board and, and they introduced us to potential [00:12:00] acquirers. And, you know, very quickly we realised that,you know, there was interest from private equity firms.

There was interest from within the, the industry. but out of respect to me, Neil and Christine recognised that I didn’t wanna sell my shares. I wanted to grow, my shareholding in the company and, the private equity structure allowed for that to happen.

John Downes: And so how did the process go?

Charles Pratt: Yeah. So over the last two years, I, Had to pitch the, the, the business for sale [00:12:30] to more than 10 different companies. had to develop a growth plan. we met people that liked us. We met people that we liked.

We met people we didn’t like. And ultimately we ended up finding, a PE firm that we all liked. And,that process, you know, took, took some time. And the challenging thing for me was to stay focused and not let the, not let the company down, by being distracted. That was, that was the biggest challenge.

[00:13:00] Because it, it is a big process.

John Downes: Dealing with 10 buyers must have taken a fair amount of your every week for the last two years,

Charles Pratt: Yeah. That, that’s

John Downes: let alone the due diligence process.

Charles Pratt: That’s right. The due diligence process was intense. and I was, I was warned about that by lots of people. And, um,there were, there were multiple times when you just think that you just thought it was never gonna end. And, I had to, I had to keep a very, open mind about it and I had to stay positive, knowing that [00:13:30] ultimately we, we will get there.

and never say die. Yeah, you just gotta keep, keep working the ball.

John Downes: How much time did it actually take up?

Charles Pratt: uh, significant. It was almost like having two, two jobs and. Rocking up to your CEO masterclasses was like a third job. so I was wearing a lot of hats, but I think that comes with the job and you’re not gonna enjoy, being a CEO if you are not prepared to, you know, get involved and, and manage multiple situations like that.

[00:14:00] So you have to enjoy it. You have to, you have to love it. and then it, and then it’s easy. If, if you don’t like what you’re doing, it’s not gonna be rewarding. And, I, I think time has gone more quickly over the last 18 months than it ever has in my life before. And

John Downes: Yeah.

Charles Pratt: that’s because it has been fun.

John Downes: And, and really intense as well. So what did you learn from the process? What were the things perhaps that you thought were essential to a successful outcome?

Charles Pratt: So the, the big one [00:14:30] is, you know, when you, when you meet potential acquirers, you, you get to hear from them what they see as a valuable, in, in your business or in a business that they would like to buy. And that was something I’d never experienced before. and the, what, what most companies are looking for is a, a risk-free investment.

John Downes: Yeah.

Charles Pratt: Um,you know, but it’s not like buying a house. So the risk-free investment is, is, you know, you, you wanna buy a company that has sustainable [00:15:00] future recurring revenue.

John Downes: Yeah.

Charles Pratt: um, we were, we were lucky that we had just been, you know, naturally focused on that for 40 years. you know, even, even what, whilst we didn’t call it that, that that’s what we did and that in our ethos.

So, yeah, that was fascinating to, to see what, what boxes you had to tick, for companies to, be interested in acquiring you.

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John Downes: What were the other ones that were sort of the top of mind for you?

Charles Pratt: Yeah, so the, the structure of the organisation,you know, the, the companies that interested to know, about, [00:16:00] you know, the, the tenure of the employees and the net promoter scores and, the culture, of the organisation. and yeah, so there, I mean, there’s, uh,I had to move a folder full of documents the other day into another space, and I, I saw.

All the files that were created through the process, and it was, uh, mind blowing. the amount of documents and yeah, you’re talking legal dd, financial dd, it’s a real interrogation,of your space. but it’s, it [00:16:30] was always very important to stay very positive about that. The questions, the, you, you had to always justify, why the questions were being asked.

John Downes: Yeah, and, and it can feel both invasive and intensive. And, if you adopt the approach that you’re gonna enjoy it, then that works for you. Otherwise, you could actually become, I suspect quite defensive about it.

Charles Pratt: you’re really being picked on.

Yeah, that, that’s right. So you, you need to stay open-minded about it. you know, when I first, heard that, you know, private equity would [00:17:00] be an option for us, I knew nothing about private equity. in fact, the only thing I knew about private equity was all the horrible things people would say about private equity.

But what I realized that those people that were saying those things had never dealt with private equity. They’d just, it was the big ugly beast that nobody knew about, but nobody liked. And the first thing I did was watch a holiday, YouTube videos about private equity. And,I stopped watching them after a while because they were all so horrible. and then read a few books, about it and found some success stories. And, you could either [00:17:30] focus on the negatives or focus on the positives, but I’ve always been a glass half full kind of guy. And,you know, that’s, um,as you say, you, you, you gotta turn up, you gotta rock up and you get a lot more outta life saying yes than you do, saying no.

John Downes: I think that’s, that’s something that we both share. So how did the shareholders manage themselves to have a united front in that process? Because, you know, the majority shareholders, the founder obviously had had their objectives and, and, and their reasons for selling were, were quite [00:18:00] fundamentally different from yours.

Charles Pratt: Yeah, that’s right. That was, there was a huge amount of trust that was placed on me throughout the entire process, because I was in a very unique position, very challenging position where I was, in charge of pitching and, and, and managing the entire sales process of the company, but I also wanted to buy the company.

So I wanted to, I wanted to sell something. And buy it at the same time. And that, that came with its own set of challenges. [00:18:30] and, you know, at, at times there were some, you know, really intense moments but I played a very straight bat and, and we all got through it and every, everybody won.

And I, and I remember having a very frank, open, candid conversation with the owner of the accounting firm when we were, when he was telling me about the, the new advisory board that was being set up. And I, and I sketched it on a piece of paper and, and I said to him, that, it looks a bit out like I’m outnumbered here. uh, you [00:19:00] know, I said to him, I said, we, everyone has to win out of this.

John Downes: Yeah.

Charles Pratt: And, I just kept following, that,and that, uh, it worked.

Yeah. Yeah. And as you said, you know, you were dealing with 10, potential acquirers. Tell me a bit about the shortlisting process. How did that work? Yeah. So I was, I was lucky I didn’t have to find those. They, they were presented to me, by our accountant, so. the, the meetings were set up, had teams meetings initially, [00:19:30] and then, if there was interest on both sides, we had face-to-face meetings. then, you know, information requests were sent through

data was exchanged, exclusively, NDAs were signed. and yeah, so we had to, had to go through that process. Probably more than 10 times to, to find the one that everybody, everybody liked. As I said before, some Neil and Christine liked and I didn’t like some I liked, but they didn’t like, everyone had ultimately ended up,liking the, the [00:20:00] final one.

John Downes: Yeah, yeah. And, uh, and once you figured out which, which was, the winner, was it as simple as just, uh, banking a fat check?

Charles Pratt: No, I wish, no, that, it was a, an enormous process, but I, I do, looking back, I did thoroughly enjoy it. I learned a lot of new things. I learned a lot of new words. it was absolutely, intense, and,there was a lot of money spent on both sides to get the deal aligned on all, both sides.

key learnings during that process?

[00:20:30] I think if I did it again. There wouldn’t be a lot that I would change because, I don’t think, looking back now we made a lot of mistakes. a lot of money and a lot of time spent, but it was all, it was all valuable. know, at some, I think, and, the book I read about private equity, spoke about someone’s journey about selling a business multiple times.

and, they recognised that what they first thought about contractors and analysts and and whatnot, they didn’t see the value initially, [00:21:00] but in the end, they saw the value in all these contractors. So I always, I always kept an open mind about all the money being spent. ultimately knowing that in the end it was all gonna be all gonna provide value.

John Downes: Yeah. And how did the completion process then work? What were the key issues there?

Charles Pratt: That was, that was very interesting and very more complicated for myself, I believe, because, you know, I had to sign off on warranties as a seller. even though I was, [00:21:30] I rolled over a hundred percent of my equity and I was a buyer at the same time. And so that was a, more, more challenging for me to wrap my head around the, the dynamics of that and the responsibilities as a director of the company.

less complicated for for my business partners who were exiting and, and less complicated for the other investors. on the buy side, there was obviously some comfort knowing that I too was a buyer and, therefore they knew, [00:22:00] oh, I wasn’t gonna buy a, a dead duck.

John Downes: Yeah. Fully committed.

Charles Pratt: that’s right.

John Downes: Yeah.

Charles Pratt: yeah, so the, the completion, um,I had envisaged something more glamorous than I, I had envisaged, you know, champagne and, oysters and, caviar. But in the end, I was sitting on the couch with my dog. my wife and kids were away, and I was, uh, signing a, you know, a hundred page DocuSign agreement, while whilst on the couch with my dog.

John Downes: He didn’t even get to pull out the Mont Blanc pen with a [00:22:30] flourish and then, and then show it up to the masses.

Charles Pratt: Yeah, that, that’s right. I, I just, I had envisaged that we’d all be in a room together and we’d all be shaking hands and all be celebrating, you know, from the, the sell side, the buy side. but the world has changed.

John Downes: It certainly has,

Charles Pratt: The world

John Downes: at least you had your dog for comfort.

Charles Pratt: I did, I did. I was looking for a, I, I remember, um,I remember asking Amber, my Hungarian Vizsla whether she would witness the, the contract and she didn’t have an email [00:23:00] address, so I couldn’t send her the document. So I had to ring, I had to ring a neighbor and, and, uh, get it sorted.

That was, and everybody was ringing me. They, they were worried I wasn’t gonna be able to find a, find a witness.

John Downes: Oh dear. How are you? Could’ve almost called me. No problems.

Charles Pratt: Yeah. Yeah.

John Downes: And, um,you know, one of the things that’s common in, acquisitions is the issue of, warranties and tax implications and those sorts of things. How did that sort of work out?

Charles Pratt: That, um,[00:23:30] we navigated our way through that, and I, I, I think it was, it was very helpful, for everyone. Knowing that I was a buyer and a seller. If I was, if I was only a buyer, both sides would, would have question marks about, some of the, some of the warranty items. and, um,you know, unlike a house that you know, degrades over a period of time and then you spend a whole lot of money renovating in one hit.

A business is continually evolving. there are moving parts in the business that you’re [00:24:00] constantly tweaking and there, there are, are agreements that are in draft format with, suppliers and customers and, through the finalisation, legal dd preparing the shareholders agreement and the share sale agreement.

And, you know, every time I, I, I went to work and changed something, I needed to disclose that and, and then have the, have the legal team update the, the warranty section, because we needed to play a very straight bat because I was gonna be responsible for, for, day one. anything that I had signed off [00:24:30] on, on the 30th of April.

John Downes: Yeah, absolutely.

Charles Pratt: Yeah.

John Downes: So, so now the deal’s gone through, where are you at now?

Charles Pratt: We’re 21 days in and counting and it’s flying. Um, so

John Downes: Into the hundred day plan.

Charles Pratt: That’s right. Yeah.

John Downes: got a hundred day plan now.

Charles Pratt: That, that’s right. And we were talking, is it a hundred working days or a hundred calendar? Day? Day, because I’m all about, as you said, I’m very competitive, so I’m all about hitting the, hitting the numbers, hitting the [00:25:00] targets. so we needed to narrow that down.

so a big one for me is getting back out there, getting back in front of the conveyor, getting back in front of the customers, getting back out alongside our people, helping develop the products, develop the, the customer experience and, and growing the team.

and we’re already back out there, enjoying it. It’s awesome. But there’s lots of, lots of changes as you can imagine. Um, I.

John Downes: Well, I guess with, private equity, they’ve got a, pretty high set of expectations around, how the business is [00:25:30] gonna grow, how to profitability, so that at some point they’re gonna be able to exit their investment. They don’t make any money until they do so. So how’s that changing things for you?

So the, the expectations of growth are significant and, um,you know, but we as we as a company are, are used to that. Yeah.

Charles Pratt: you know, you, you had to grow. You had to, you had to change, you had to innovate. Otherwise, you, you just, you died. and, you know, we, we doubled our business in in the last four or five [00:26:00] years.

Yeah.

and, uh, you know, that’s why, that’s why, uh, the PE firm was, interested in our company because we had a proven track re record. Of delivering the growth that they require and aspire to. So, yeah, so we, we had a town hall meeting the other day and, made it very clear to, to the, to the team that,you know, there, there is, there is gonna be a big focus on growth.

but I’m mindful of the fact that you can’t, nobody can just grow for the sake of growing. You, you need to, you need to grow sustainably, and [00:26:30] you need, you need the right things to enable you to grow. And, if you don’t have the right people on the bus and you don’t have the right products,on the bus or on the trailer behind, it’s not gonna work.

So you’ve gotta package all that up together and, you gotta maintain a, healthy culture in the business too.

John Downes: Yeah.

Charles Pratt: Yeah.

John Downes: I guess that, um,organic growth alone won’t be sufficient.

Charles Pratt: No, it’s, there, there are multiple ways to, to grow a business, as has been organic over the [00:27:00] last 40 years. and, that, that is gonna be different,over the next three to five years. we’ve, we’ve got, um, targets in mind to acquire, Through the, through the supply chain, whether that be the, the customers, distributors, competitors, suppliers.

we wanna all, all get on the same team together and, and, and buy and build. So they’re saying pe and, and bolt on strategic acquisitions. and then, you know, turn, turn out, you know, four or five times the size of the company [00:27:30] today.

John Downes: That’s gonna be one hell of an exciting road, Charles.

Charles Pratt: I’m looking forward to it.

John Downes: Fantastic. So when you step back now and look over the whole process, what was the most important thing that, that you had to get? Do really well? I.

Charles Pratt: So stay, stay calm.

John Downes: Yeah.

Charles Pratt: um,don’t lose your cool. in the, in the heat. At the moment. and you needed to do that because there, there were, there were, I, I was being pulled, left, right up, down, inside out. [00:28:00] and looking back, oh, and people reminded me that throughout the process they, they were amazed at how cool, how cool and calm i, I stayed throughout the process.

You’ve got a, in a meeting the other day, someone apologised for, pushing me a bit hard. Uh, and they were worried that, you know, I might, might get offended by that. And I said to them, you’re gonna have to try harder me. yeah. So that, that was, that was a big focus of mine. not to get stressed through the process and, and balancing managing that. yeah, that was a [00:28:30] focus looking back.

John Downes: And were there any. Things that you felt you had to guard yourself against in the process, either on behalf of yourself or on behalf of the organisation?

Charles Pratt: Yeah, there was, because naturally, and I identified that, very early on. interests were not aligned. but you have to accept that you couldn’t let that frustrate you, you couldn’t let that,annoy you or conflict, myself in, in the way that I went about things. [00:29:00] and it was a bal, it was a balancing act.

John Downes: Yeah.

Charles Pratt: and and that’s why I had to play a very straight bat. and in the end there were a lot of balls, coming over the, the fence and you couldn’t let ’em go through to the keeper. and you couldn’t put ’em in the slips. You had to hit ’em straight back.

John Downes: Yeah. You know, that’s, that’s actually really interesting,because. When you think about it, you’re actually transitioning from conflict to alignment. you know, you’ve got yourself and you’ve also got your founders [00:29:30] in some ways, there’s a conflict there because they’re looking to exit the business.

You are looking to exit the business, but actually be reemployed by the business and also to reinvest in the business. And at the same time, you’ve got buyers who are looking at the business and saying, okay, how do I get the cheapest price for the amount of, how do I get the the best value? For the money I’m gonna spend on this investment.

and therefore there’s, there’s tension there about, okay, so how do I beat the price down? How do I actually set an effective price? And then as you go through the [00:30:00] process, you’ve actually gotta end up with, with hand in glove alignment whereby the buyer is your partner as CEO. To actually grow the business for a future exit yet again.

So, so that transition, probably turns you into a bit of a head case because all of a sudden you’ve actually got conflict or conflicting interests at the very start of the process whereby you actually need to end up with, with this really hand in glove, amenable, coup supportive [00:30:30] arrangement

and relationship where you’re all actually working together for the next, for the next common goal.

Charles Pratt: Yeah, and I, and I, I’ve thought about this a bit and I think being a middle child, gave me, gave me the ability to reason and, you know, diplomatically resolve, tensions. and I, I enjoy that. I’m a, I’m a peacemaker, I’m a deal maker. and, uh,ultimately, yeah, you gotta navigate that, those challenges.

[00:31:00] but I, I, I, I love it. That’s, that’s what I do very well. and, it needed to happen. If, if I was gonna stick around, it absolutely needed to happen. if I was gonna move, move on, or. you know, sell all my shares. it, it would’ve played completely different.

John Downes: Yeah. Yeah, because then it would’ve been very much a cut and run. Just give us a check.

yeah. Yeah. But I’m 44 years old and, and I don’t think about retiring. I love what I do and I’m gonna do it for a lot longer yet, much fun to be had.

Charles Pratt: too much fun living had, got [00:31:30] not enough, not enough hours in the day.

John Downes: No, absolutely Charles. So Charles, when you think about your peers as founders and CEOs of medium sized businesses, what #CriticalFewActions™ do you think they should start tomorrow if they did nothing else,

Charles Pratt: yeah. Focus on the what’s going to sustain what they want in the future and, and figure out how that’s gonna be achieved. looking back, that’s, that’s what we did. have a [00:32:00] diverse, customer base, diverse,product base.

don’t have all your eggs in one basket.

John Downes: Yeah.

That’s a big one. And that really actually covers so much. It’s not just your customers, it’s not just your industry, but it’s not just the people either. And it’s not just your suppliers and your supply chain. You know,

Charles Pratt: And, and I think you, I think what you have to do is constantly evolve your critical few. If you do come up with a critical few things and that’s it. That’s, that’s not gonna work. You, you gotta come up with a critical few every day, or a critical few [00:32:30] once a month, or a critical few each year.

And, and, and the scale of each one of those is different. But you have to constantly reinvent yourself. Otherwise the competition is gonna come in and do what you did yesterday and absolutely destroy you. and that’s, why I get a kick out, you know, being an engineer and having a passion for design.

And not doing what everybody else is doing, pushing the boundaries. and, and hats off to Neil and Christine Kinder. They, they, they never put a leash on me. they allowed a safe space, and, and backed, [00:33:00] myself and the company to do very adventurous things in our, in our space, with our products and, and we’ve all benefited from it.

John Downes: Absolutely. And I guess if you go up sort of a level and look down on the business, you know, one of your critical few for many years was actually to focus on building that sustainable growth and those sustainable relationships with clients. And then I, and, the other critical few I guess, was

to actually build a business that was bigger and independent, [00:33:30] than the founders. and over the last, 24 months, you know, you are well apart from, leading the business, your critical few is to actually get it through this exit gate. so Charles.

Charles Pratt: Absolutely.

John Downes: As always, it’s been an absolute delight to chat with you.

Thank you so much for your time and your insights, your candor, and in fact for also for your friendship. I really look forward to watching your career develop successfully in the next environment.

Charles Pratt: Thanks very much, John. Been an absolute pleasure. Enjoyed it.

John Downes: [00:34:00] Fantastic.

Thanks for listening to the #CriticalFewActions™ podcast. Don’t forget to subscribe and grab the downloadables from the show notes. And if you found this episode helpful, I’d really appreciate it if you share it with your peers and your team. Stay focused at take action.

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