How To Sell A 12 Employee Company For 8-Figures

Transcript

James Ashford:

I’d learned about how to systemize with … Again, I went over to the States and worked with a company called Sixth Division and understood systemization. So you seal all the cracks, and people think that if you have really rigid, robust systemization with checklists and automation, et cetera, that you turn your staff into robots. It is the opposite of that. It makes your staff these creative, wonderful people that now don’t have all that crap to think about, and they can now operate at their best creative selves, run experiments, drive the business forward, be entrepreneurs. And that was what we created.

John Warrillow:

Welcome back to another edition of Built to Sell Radio. The podcast designed to help you punch above your weight in a negotiation to sell your company. My name is John Warrillow. Today on the show I think we will deliver against our promise because we have James Ashford. James is based in England, Yorkshireman, as he will tell you. And he built his company to one and a half million pounds in turnover and sold it in a healthy eight figure exit. Before we get to James, just a couple of reminders. The show notes for today’s episode can be found@builttosell.com. There you’re going to find references to everything James talks about on the show, as well as some definitions from some of the lingo and acronyms we use that might be helpful as you approach this conversation. The second thing I want to mention is that James references systems and the importance of systems for building a built to sell company.

John Warrillow:

And if systems are something that you’re interested in developing and implementing in your company, we’ve developed a free ebook for how to do that. You can simply go to builttosell.com/sop. Again, that’s builttosell.com/sop, where you’ll find our definitive guide for creating standard operating procedures. All right, let’s get back to James Ashford. What a great story. In fact, it was so good that our interview went more than two hours, way too long for a single episode. So we’ve decided to break it up into two.

John Warrillow:

In this first installment, we’re going to hear everything that James did to build GoProposal, his company, into a sellable company. So he’ll talk about the things that he structured in his company to make it work without him, how he built the successful business without risking his marriage, which was at jeopardy at one point in his journey, how to shorten your sales cycle, how to stimulate creativity among your employees without necessarily giving them handcuffs and making them feel like robots, how to leverage social media without necessarily becoming the only rainmaker in your company and only pitch person for your company. Also how to amplify your leverage in a negotiation to sell your company. Here to tell you the entire story is James Ashford.

John Warrillow:

James Ashford, Welcome to Built to Sell Radio.

James Ashford:

Great. Thanks for having me, John.

John Warrillow:

It’s great to have you. I had a chance to learn a little bit about your story before we hit record. And I would love to go back to the marketing company that you had, because I understand it did not end well.

James Ashford:

No.

John Warrillow:

Talk about that if you wouldn’t mind.

James Ashford:

Yeah. So I’d always wanted to set up a business. I’m not quite sure where that came from. I think maybe seeing my parents work very hard in jobs for companies and maybe not be treated right and not work the hours that, as a child, I wanted my parents working, and seeing people around me with the businesses who seem to be happier and drive nicer cars and live better lives, seemingly. I’m not from a bad background. I had things, I was good, I was comfortable, but I think that was where the passion came from and always wanted to set up a business, tried many different things, probably like 50 different things from being a close up magician and setting up an online magic course to designing a toilet, to every possible thing you can think of, right?

James Ashford:

And then eventually through necessity, I’ve been made redundant twice during the 2007/2008 recession and child on the way. Needed to set up a business. And so I thought this would be the way that I’d make a load of cash and have a load of time. And the opposite was true. And so set up a marketing agency, frantically learned as much as I could about business. I had some good understanding, I guess, of systemizing processes and various things, but whilst it was a successful business in many ways, and we delivered a lot of great value to our clients, I became fairly distracted on other potential business opportunities. I guess. I was spread too thin.

John Warrillow:

Shiny ball syndrome.

James Ashford:

All that. And failed to implement a full finance function in that business. So I was acting on 18 month old data, making financial decisions based on gut instinct, not really having a clear direction that I was going in. And when somebody came into the business and lifted my blindfold off, we were on the edge of a cliff that I’d not realized and tried to backpedal as frantic as I could and failed to do so.

John Warrillow:

When you say failed, I mean, what was the final moment in the business? I mean, did you shut it down? Did you not make payroll? How did you know when you’d failed?

James Ashford:

Yes. I knew that I made sure the staff were paid up, and I knew what was happening. And also, I’d fallen out of love with the business as well. So I thought I was going to go on to do something else, and that didn’t work out either, but the business was liquidated in the end. So I managed to find a good home for the clients. I managed to make sure the staff were okay, and I managed to try and secure them jobs and help them to get set up afterwards as well. So I could see it happening. I’m from a small Northern town in England. People talk, right?

James Ashford:

I owed a few suppliers some cash, and when I started my next business, I made sure I paid them all back. I leveled everything off, but the difficulty was going back to my wife and saying, “I’ve messed up and mistakenly taken some loans out against the house. We have to remortgage the house.” Affected the marriage. Sitting in front of your staff and having to let them go despite the fact that they’ve supported you in growing the business all that time, very difficult and not something I wanted to repeat.

John Warrillow:

How much were you into the house for? How much had you pledged against the house? How much debt had you taken on with the houses?

James Ashford:

Probably 10 grand on a 170 grand house. So probably not a ton of cash, but when things are tight, just a few grand is difficult.

John Warrillow:

What was your wife’s reaction to learn that you had a 10,000 pound loan against the house that you hadn’t disclosed?

James Ashford:

Yeah, there was a lot she wasn’t aware of with the business. And I think this is a really important thing and one thing that we certainly corrected with the next business. As an entrepreneur, you are out there fighting the good fight, trying to do what you think is right for your family. And you just assume and trust that everyone knows that you’re doing things for the right reasons, but they’re not sure why you’re working ridiculous hours, or when you are back at home, that they’re staring at a little glowing apple on the back of a computer most nights. And so just no alignment really. No idea why we’re doing it, where we’re heading with it. And so that was one part of the difficulties, but lots of difficulties as well. And like I said, we in a very interesting way corrected that with the next business.

John Warrillow:

Yeah. I want to get to that, but I’d love to know specifically where were you when you told her? Did she throw a plate at you? What was her reaction? Yeah, take me into that.

James Ashford:

I can’t remember one big moment. It was just a slow corrosive process as just one thing fell and then the next thing and then the next thing. I think she’s always trusted me. I’m fairly resilient. I’ve never not provided for the family, despite the fact that I’ve never, I guess, not had much conventional stability in the past. I’ve always found a way. So I think deep down she always trusted that.

James Ashford:

I had another business that I was going to be moving forward with that had already been building at the same time. And that was a bit of a distraction. But once I made the decision to close this business within a couple of days, I realized that other business also my heart wasn’t in it. It wasn’t my company. I’d given two years to that company as well. Got paid nothing from it. And there’s a phrase I learned when I set my new business, which is, just because you can do something doesn’t mean say you should do something. And I was doing lots of different things believing that they were all right. And they weren’t. None of them were

John Warrillow:

What gave you the confidence to continue? Here you are, in your own admission, you had 50 businesses like toilets and magic. And now you got this marketing agency that’s failed a couple days later. A lot of people would be like, “Maybe I should look at the writing on the wall here.” Like, “Maybe this whole entrepreneurship thing isn’t for me.”

James Ashford:

Yeah.

John Warrillow:

I mean, did you ever contemplate maybe just getting a job?

James Ashford:

I’d had jobs in the past. I’ve had many jobs as well, so I’ve never really exposed us to too much risk while I was attempting that. I did with that business. But with all the other ideas, I always had a job and I was trying something here. So I was always making sure that we were secure. So yeah.

John Warrillow:

So they were side hustles in fact.

James Ashford:

Yeah. All side hustles. And that was the first full committed, “I’m all in on this business.” Right? And so it’s the only option I ever had from a young person. I always believed I could do it. I didn’t feel I was far off. When the liquidators came in, they said it was such a shame because you had so much. And that was my encouraging thing. You don’t have to be 100 degrees off. You can be two degrees out, and then two degrees over time compounded, unchecked takes you miles away from where you need to be. Right?

James Ashford:

Although it didn’t end well, there were incremental adjustments I could make moving forward. And also through that process, I’d had privileged access to MDs and CEOs because I was doing their marketing for them, right? Right. We managed to land some big projects, tens of millions of revenue companies. And so I got to see the inner workings of these companies, and so I learned so much. It was such a rich learning experience as well. And I felt that with a few tweaks, I could crack this. And so after that, once it all happened, I just went into study mode. I just devoured every book. I went on every course. I did Tony Robbins business mastery course and consumed everything I possibly could. And I thought, “I’m going to make this work.”

John Warrillow:

Where does it go from there? And I’d particularly love to hear how GoProposal came about out of the ashes of all of this learning.

James Ashford:

Sure. So I became fascinated with what connects businesses, what makes them all the same. Everyone thinks their business is unique and that mine’s special because of the service I provide or the location I’m in or whatever. Right? But they’re all the same. You’ve got to get some customers, give some value and get paid for it. So I became really interested in what are the things that connect the businesses and how can we develop models to make it successful? And I love all start with why and all Simon Sinek stuff and all that type of stuff. It’s beautiful. Right? I get it. But at the end of the day, the primary function of a business is to make money. And if you don’t do that, you’re never going to fulfill your why. So I became fascinated with what makes a business make money.

James Ashford:

There’s only two things you can do to make money in a business, which is get more customers or give more value to the customers you’ve already got. And I just was starting to break these simple things down. And what I started to identify was that what people really struggle with is the sale in a business. And we avoid sales because everyone’s had such terrible experiences of salespeople. We don’t even call our team salespeople. We call them business development managers or something. Right?

John Warrillow:

True.

James Ashford:

But in that sale, no value can be given unless a sale happens. And it’s in that interaction there where businesses over promise, they give discount, they don’t charge enough. And if you can just fix that, it solves 90% of the rest of the problems in the business. The reason why you can’t recruit the staff that you want is because you’re not making enough money.

James Ashford:

The reason why you can’t market to the level you want, you’re not making enough money. Let’s fix that. So I started to do that with businesses that trusted me, and there was a local football academy for kids near us that was doing 75 grand a year. And I just started working with them. And I fixed that one thing. And within 18 months they were making three quarters of a million pound a year. Right? All these ideas, all this learning, I help them to build a franchisable model in their business.

James Ashford:

Even despite through COVID, they’re now the fastest growing sports franchise in the UK. Right? So I had this privileged access of a playground effectively, John. So they would pay me as a business consultant. I’m a creative myself. So I’m able to think laterally with these businesses, and all these ideas I was able to implement and see the effect of them.

John Warrillow:

Awesome. So how does that consultancy turn into a software company?

James Ashford:

Sure. So I kept working with different businesses, and it was nearly always the same challenge of how do we fix this sales piece? How do we solve this? There were other things I started to learn about as well about how do we create a great culture and great values? How do we systemize, not only systemize to scale, but systemize to create incredible experiences. So I started being really fascinated with all of these things.

James Ashford:

And then through a mastermind event I was at, I met an accountant, and I went to see him, and I said, “Look, let me just review your sales process and see if I can improve it.” He says, “We’re one of the best around at this.” Like, “We’ve invested a lot of time in this.” I said, “It’s cool. Let me just go through it.” And I went through it, and I said, “This can be so much better.” He says, “Yeah, but we’re better than the other accountants.” I said, “I know, but I’m not comparing you to them. I’m comparing to Uber and to Amazon and to anything I want to compare you to, right? Whether you think that’s fair or not.”

James Ashford:

So I implemented what had been implemented in many other businesses up until this point. We implemented a sales system to allow him to be able to sit with a client and collaboratively agree the fees whilst they’re with them. Right? Everyone tries to do it after the fact, “I’ll send you a proposal over by close of play Friday.” No, let’s do the deal now. Right? Let’s get it done. So I implemented the system and I said, “Not only will you be able to close deals during the meeting, you’ll never discount again. The client will understand what they’re getting from you. You’ll bring them on the journey. And also, you’ve got 13 staff. Why should you be the bottleneck? Let’s empower your most junior member of staff to be able to price and sell your most complex services to your most complex client.”

James Ashford:

My analogy with that is if you go to a restaurant, every waiter and waitress can sell you and your family the most complicated meal you can come up with. They don’t need to go and consult with a chef. They’ve got a menu. They can sell it. Right? So we implemented this into that business. Didn’t think anything more of it. I called it the five minute proposal tool, and it was done. And he said to me, he says, “James, I don’t understand how you’re not a millionaire yet.” And I said, “I know, it’s doing my head in as well.” He said, “You either full of …” I don’t think I can swear on this call, can I?

John Warrillow:

Sure. You can say whatever you want, James.

James Ashford:

“You’re either full of shit and I’ve not figured it out yet,” he said, or, “You’ve not stayed focused on one thing for long enough.” And I said, “I hope it’s the latter.” A week later, somebody heard about what we’d done for this accounting firm. Another accounting firm over the … This was in Lancashire. The other firm was in Yorkshire where God’s from, John, heard about it, messaged me and said, “How do I get this?” And that was the spark. I’ve been looking for this for a decade, right? I’ve been looking for what I believe would be the idea that would get us to where we wanted to be. And I spotted it.

James Ashford:

In all the 10 years of preparation, of failings, and when you’re in the throes of those failings and when you think of a failure, it’s just that it didn’t work out as you expected it to, but it’s not to say it was a failure. It was a learning. And Steve Jobs says, “I was able to connect the dots of everything that had taken me to that point.” And I contacted my programmer and I said, “Do you think we could commercialize this product, but keep the tech so simple, just keep it really simple?” And he said, “I think we can do it for four grand.” I said-

John Warrillow:

Who’s your programmer? Is this programmer as a friend, as a staff member?

James Ashford:

No, it’s an external programmer. I had one in the UK that I’d worked with for 10 years from my marketing company and a guy in Australia that I’d done some bits with as well. So I consult with them both. Between it’s going to cost us four grand to get a minimal viable product out the door and up and running. I got the commitment from three accountancy firms to pay some money towards that. So I had all the cash. I was still doing my consultancy job on the side. So I wasn’t all in on it. I built the product. And to your book title, which I had read your book years previously, when I set that company up, it was built to sell from day one.

John Warrillow:

So many questions about that. I’d love to go back to in what ways it was built to sell. Before we go there, though, with regards to the relationship you had with the UK and Australian programmers, did you describe who would own the IP at that stage? And did you get that in writing? What was that like?

James Ashford:

Let me just go back and just think. I actually offered one of the developers a percentage of the business and to pay them like, “I’ll give you a percentage of this.” To his credit, he has loads of people offering him that. And very few things turn out. He says, “No, just pay me.” And I’ve always looked after the guys that I work with. I pay them their full rate, never question anything. And within five days of invoice, they will be paid because I want them responding to me fast, so I should respond to their payment request fast. Right?

James Ashford:

So I had a really good relationship with them. I don’t think I actually did get anything in place. I think I wrongly assumed that because I’d commissioned the project that I therefore owned the IP. And within a short time after that realized I didn’t. And so got formal IP contracts in place. And so any external developer that we work with signed all the IP overtures. There are some quirks in the UK. If you employ people in the UK, then it’s assumed that all the IP is owned by the employer. But you do still have to ideally get that in place as well. But it was done after the fact, John.

John Warrillow:

Got it. So you spent four grand to get this very crude, minimum viable product built.

James Ashford:

Yes.

John Warrillow:

I’m just visualizing. So I’m meeting with my accountant, and it would basically allow the accountant to choose from a set of menu-based offerings.

James Ashford:

Correct.

John Warrillow:

Productized offerings that they could sell to their customer.

James Ashford:

Yeah. So you go through, you agree together collaboratively. If it gets to an amount that you don’t want to pay that much, not a problem. What do you want to take out? There’s no discounting. You’re going to pay the full rate. And then once you accept it, produce a proposal engagement letter, you sign it on the spot. Now it triggers off various other things. At the time it didn’t. The process ended there.

John Warrillow:

Beautiful. And so how did you finance the beginning? It was the couple clients who agreed to kick in some cash to have it built.

James Ashford:

Yeah. So four grand got me out the door, and when I say minimal viable product, I mean to the point where I can start selling it. Sometimes I think people develop something way beyond what it needs to be. We kept the product really tight. There’s some guys we were following in the States called 37signals. They built Basecamp.

John Warrillow:

Sure. Jason Fried’s company.

James Ashford:

Yeah. Great guy. And he’s got a book called Getting Real. And he talks about that like half your scope, half it again, any feature request say no to them, don’t even write them down. That’s our Bible. Any new member of staff that came on board with GoProposal has to read Getting Real to start with to understand the principles of what we are doing. So we just kept it lean and got to the point where we could start selling this product.

James Ashford:

Now, we had a fierce competitor that turned out to be a very aggressive competitor that had seven years head start on us and $24 million of investment. I had no investment. I’m a tight Yorkshireman, John. I didn’t want any investment. I was determined to build, to challenge the model. And you see all these software companies, they’ll post online, “Just had another round of funding.” Within month three we were profitable. We were profitable ever since then. And my goal was to build a profitable business and never have anyone have to tell us what to do.

John Warrillow:

Music to my ears now.

James Ashford:

Yeah. Just old fashioned. Make money. Have money in the bank. Do what you want to do.

John Warrillow:

Love it. So where does it go from there? You’re profitable. Tell me where it goes from there.

James Ashford:

Somebody rang me. A prominent person rang me and said, “What the hell are you doing? You’ve made a real mistake here, James. You’ve picked the worst industry. They don’t like anyone from outside of their industry. They will question everything you do. They will challenge you. You’re trying to sell them a sales product. That’s not anything that they warm to. They don’t want to sell. I think you’ve made a real mistake.” And I said, “Look, they’re humans with hopes and dreams and fears, and I’m just going to tap into that. And I’m just going to talk to that.”

James Ashford:

And so everything I’ve learned up until that point, and this is where everything started to come together. So I used to be a magician, right? That’s where I learned how to sell, walking up to a group of drunk people at a wedding who hate magicians, don’t believe in magic, don’t want you there. And I had to convince them that magic was real. So I knew how to sell. I’d learned about how to systemize with … Again, I went over to the States and worked with a company called Sixth Division and understood systemization.

James Ashford:

So you seal all the cracks so that you can allow your … And people think that if you have really rigid, robust systemization with checklists and automation, et cetera, that you turn your staff into robots. It is the opposite of that. It makes your staff these creative, wonderful people that now don’t have all that crap to think about. And they can now operate at their best creative selves, run experiments, drive the business forward, be entrepreneurs. And that was what we created. But the way I chose to scale in the business was with all the marketing that I’d learned was give everything away, share everything.

James Ashford:

So this original accountancy firm that I’d built the sales system in, I became a 10% shareholder of that business. And in return, I gave him 10% of GoProposal, right? Now, what that beautifully did was it gave me an accountant on the inside of my business to give me the advice I needed. But it meant that when I gave talks and things, I could say, “Yeah, so I’m the director of an accounting business, and this is what we do in our firm.”

John Warrillow:

So smart.

James Ashford:

I got some credibility. I wrote a book called Selling to Serve. Now, this is the updated version I updated last year. You can see the thickness of this, John. This is the original version that you can see the difference. In fact, there was a version prior to this that it was so thin Amazon wouldn’t allow me to have any texts on the spine. Right?

John Warrillow:

Really?

James Ashford:

I gave myself a week to write the book, but I didn’t care whether it was good or not. I just wanted something in the space. It happened to be okay.

John Warrillow:

So the book was intentional for you to get in front of accounting firms and accountancy firms that would enable you to sell the software.

James Ashford:

Correct. So I thought, “The only thing I can share is what I know, which is the sales process that we’ve implemented into this firm, how you should sell, everything that we’ve done.” I just gave it all away and mapped it all out. The other thing is that through the magic, again, I set up a product called Magic Dad. You can still find it on YouTube. I give it away free now, but I wanted to teach dads how to be magic in the eyes of their kids. Right? But through that, I had to do hundreds of hours of videos of getting it right.

James Ashford:

So I thought, “The only way I can dominate this space in a way that no one can catch me is to just be prolific with video content. I’m going to share everything. I’m going to help as many people as I can. I’m going to produce as much video content as I can. I’m going to do a video a day, and it’s going to be high quality material. And I am not going to try and sell the product. I am just going to try and serve and help this industry.” So when you see a lot of content and it’s fairly flimsy, they’re just giving enough away to try and sell you into their product.

John Warrillow:

Sure.

James Ashford:

I was like, “I don’t care whether you buy the products or not. I’m just going to help.” So produce the book, prolific with video content. I would hazard a guess that GoProposal in the last five years has produced more video content than every other software company in the accounting industry worldwide. We are-

John Warrillow:

That’s competitors like Intuit and Xero and yourself and others.

James Ashford:

Yeah. Stack them all up. They can’t do it. They’re too big. The sign off process that videos have to go through. I’m just going to backtrack one second. We built three components to the product, John. We built the product, the software. We built the education line, which was the book online academy and content. And we built a community. So I built the community with Facebook. It was the easiest way that I could get out there. That generated my content for me. So you’d have people asking questions in there.

James Ashford:

So someone would say, “Hey, a client just asked me for a discount. What do I say?” And I said, “Give me a minute. I’ll answer it.” So I answer it. And this was one of my best videos ever did. I literally turned my iPhone on, hooked it. I’ve got a little lapel mic that I plugged into it. I said, “If someone ever asks you for a discount, this is the only answer you ever need to give, ‘Will stop in its tracks.'” And it always works. Right? So the response is, “Can I have a discount?” “Absolutely not, but I don’t blame you for asking.” That’s the end. You don’t need to do anything else. Right?

James Ashford:

So anyway, share that with him in the community because that’s serving my clients, post it in LinkedIn with the exact heading above that he just asked me, “A client just asked me for a discount. What do I say?” And within 24 hours, it had 100,000 views.

John Warrillow:

You’re kidding.

James Ashford:

Just give it all away. And by the time anyone realized what we’re doing, we were just so far, and people are scared to death doing it.

John Warrillow:

I want to make sure people listening to this heard that correctly, because the example you just gave of a beautiful video response to a very important question is something that you did quickly. However, it probably took you years of videos and thousands upon thousands of hours of content posting every single day to be able to whip that off. I think some people they’ll throw up something on LinkedIn. It won’t get much reaction. They’ll go, “Oh, social media doesn’t work.” And yet what you did was you became a student of it and a craftsman and absolutely dedicated machine at creating content, which happens over time. You have some winners, right? And this was obviously one of your winners.

James Ashford:

Definitely. There was a time when I didn’t do videos. And I do remind people of this moment because people can’t believe there was a moment when I didn’t do videos in my space because I do so much. They asked me why I wasn’t doing videos. And I can’t remember what excuse I gave them, some bullshit excuse about I was waiting for my hair to be done or I ordered some lights or a microphone. He said to me, “Why are you being so selfish?” I said, “What do you mean?” He said, “There’s people out there today that are desperate to hear that thing that you’ve got to say. Why are you preventing them from hearing it? Get it out there. Stop focusing on yourself.” And that was the thing that slapped me out of my thinking.

James Ashford:

And then one thing that Gary Vaynerchuk says is, “Don’t think that you’re producing content. Just document your journey. Just document what’s happening.” Everybody has so much fantastic content sat in your inbox, on phone calls where you’ve helped a client. And so everything that we did from that point was just, “Let’s just serve our clients. Let’s just help them to overcome the challenges they’re facing.” And every time we do it, if we can, we record the content with their permission if they’re involved in the conversation, for example, but normally I don’t need to do that. We then would just share the content, and don’t stress it. Some will land, some won’t, some will annoy some people, some won’t, but over time, they can’t ignore you.

James Ashford:

And I think it was about year three where I felt things tipped where I think people thought, “I don’t think he’s giving in. I don’t think this stops.” I just wore them down, John. That was my tactic.

John Warrillow:

It is like pushing a boulder uphill, right?

James Ashford:

Yeah.

John Warrillow:

It is very slow in the beginning. And then it does tend to create a bit of momentum. So orient me in the timeframe. So you started GoProposal in 2016.

James Ashford:

In 2016.

John Warrillow:

So we’re talking 2019/2020 timeframe.

James Ashford:

Yes. We were growing with video from day one. It was the way we got it out the door, and even I’d go to events and I managed to get speaking gigs. The book landed me speaking gigs at events. We’d go to events. We’d film the event. We’d then use that and dissect that. And then that would be shared over social media for months to come. But I would go to big events by Intuit, by Xero. And I would do a roundup summary video.

James Ashford:

And one thing that people neglect is speed. They don’t see the importance of speed. They think everything has to be of tremendous quality. Right? But I would much prefer to get something out the door 80% today than 95% in three weeks time. Right? So I would go to these events and I would go around and film the stands. And I’d film people talking, and I’d do a summary at the end. So the show would close at four o’clock, 5:00 PM. And my rule was people had to be watching that video whilst they were on the train on the way home. So within an hour or two hours of the event closing, I had to have the video launch. It’d be another month before the organizers of the show would get their beautiful production out, but no one cared because they’d seen the summary video, and it was good enough

John Warrillow:

What’s happening at this point to GoProposal’s revenue. So you’ve written the book, you’re speaking, you’re documenting your journey on video. How is that translating into number of subscribers? Where are you at in this journey revenue-wise?

James Ashford:

So let me just fill in important part here, John. So we built this to sell from day one. When I designed the logo for GoProposal before I’d even announced that GoProposal was the company name, I wrote underneath it, “A Xero product, a Sage product, an Intuit product.” I believed that it was going to be one of these companies that was going to buy this. I think there may be a couple of others as well, but I wanted to manifest like, “This is why we’re doing this. And I want to see that from day one is why we’re doing it.”

James Ashford:

My wife, we went to a financial planner, and we planned out like, “How much money do we need to live until the end of our days and to be able to put deposits down on houses for our kids, pay for them through university, pay for their weddings, et cetera, and live a good life, nice house, holiday home, et cetera, right?” So we did that financial plan exercise and got to a number and-

John Warrillow:

What was your number?

James Ashford:

The number was five million.

John Warrillow:

Got it. Pounds.

James Ashford:

Five million pounds. So if we get a five million pounds, it’s game on. Great life. We never have to work again. And then also we set some milestones along the way, because my wife had a very difficult job as a secure psychiatric nurse, and like, “How much do we need to earn to get you out of that job so you can spend more time with the kids, do what you want to do, et cetera, move house closer to the kids’ school?”

James Ashford:

So we did this exercise and set some very key events for us that made a difference in our life that showed up in our home like, “When can we go to Lapland with the kids for Christmas, stuff that actually makes a difference? I want to pick the kids up and take them to and from school every day. These are important things to me. When can those things start to happen?”

James Ashford:

So we got to that agreement on day one, which then meant that the financial planning and all of the cash flow forecasting and everything that we had to do was really straightforward because we were trying to take it to this point that within three to five years we were going to get to a position where we could hopefully realize that. And if not, we keep going, right? So every month we had a monthly management account, a monthly management report, sorry. And in that report it would remind us of why are we doing this like, “What’s the big goal?”

James Ashford:

But I also wanted something called the stakeholders report, which was the same set of management accounts that I could give to all of my staff so they could see that we were on track. Any member of staff that joined the business, they were told, “You are joining a business that is going to be sold. And you will have a great story at the end of this process as well, and you will be looked after.” So they all knew what they were getting into.

John Warrillow:

Did you give them options or tell them how they would benefit from the sale?

James Ashford:

No. There was no options. They were told at a very basic level they would have a great story, and they would be valuable people in the world if they could help to build and scale a business that then got acquired. Right? I just then happened to look after them, and we came to a great deal with Sage, and we’re able to look after them between us. It was the most heartwarming part of the entire process. Absolutely beautiful.

James Ashford:

But my wife got this stakeholder report every month as well. So she knew that we were on track to achieving what we set out to achieve. We joined bank accounts, personal bank accounts at home. We had a joint account. We had personal bank accounts. We have spaces and money saved to one side. We have so much visibility personally around our finances. So my wife was now able to make decisions about Christmas and holidays and stuff without having to come to me. And she knew that we were on track. All the failings I’d made in the previous business, I needed to get this right at home between us first. I needed to be on the same page.

John Warrillow:

So how did you figure out how big GoProposal needed to be in order to generate a five million pound windfall? Did you have an estimate in terms of it needs to be X in terms of revenue or Y in terms of profit? Did you back into it that way? How did you know you were on track to this exit?

James Ashford:

Although it was built to sell, I will also just clarify that I believed in building not an exit strategy, but an option strategy. Although it was built to sell, selling was one of the options. Other options were also that we were going to scale it, franchise it into other markets, back out of it completely. And by the time I got to sell it as well, and this is important part of the story, it was running entirely without me. I could just let it run and we could have a nice life as well. So exiting was one of the options for us, which meant that when we came to do the exit, there was no major pressure. It was just going to be a great outcome if we could achieve it.

James Ashford:

So the thing that I think was actually more important than that was achieving a personal income each month that allowed us to start to live the life that we wanted. I didn’t want this fictional thing in the future that we’re wholly dependent on. I wanted to start realizing this now. Otherwise, what’s the point of us doing it?

John Warrillow:

Interesting. Because a lot of software people … I mean, you hear these legends. They have a 500 square foot office, and they put 12 people at a room and they eat Kraft Dinner and soda crackers for a year, and they have an exit, but you were more focused on we need to have a certain amount of personal income every single month to ultimately accumulate the net worth that you would feel free.

James Ashford:

Just to enjoy life now really, John. It was really important to us. We’ve got three children. Two of them are young. So Leo and Scarla are 10 and 11 now. They’d have been five and six at the time. And you’re not getting those years back. So whatever we scaled and do with the business, there’s no way I’m missing sports day. I’m going to take him to and from school at least three days a week. I’m not missing anything. And people said to me afterwards like, “Couldn’t, you have scaled it bigger? Couldn’t you have done more?” Yeah, probably, but at a cost. There would’ve been a cost to that. There’s a cost to everything. And you’re always balancing this up.

James Ashford:

And I was always mindful that I could go again or I could do something once the kids are at college or whatever, but I didn’t want this to be crazy. I wanted to enjoy this. I wanted us to have a nice … Because you’re not getting these years back. Right?

John Warrillow:

Sure. And I just want to make sure I’m clear in my own mind. So you sit down with a financial planner and you do all the sums to figure out, “Okay. If we can get this amount of wealth built up, we can do everything we’ve ever wanted. We can do the deposit for the kids and the colleges and the university, whatever.” And that number was five million pounds. I’ve tried to understand though. Draw a line to me as to how you knew you were tracking to that number.

James Ashford:

Sure.

John Warrillow:

You were taking out a certain amount of money every month out of the company. How did you know you were on track for that?

James Ashford:

Yeah. So I guess we didn’t know 100%. We made some very conservative estimates. We had some people around us, and we estimated that if we could get a four times multiple of revenue, then that would get us towards a five million pound figure. And we knew that would be at some point in the future. But as we were doing our cashflow forecast each year, I can’t remember when it was in year two or whenever it was. And I remember I sat down to do the plan for the year. And Paul said to me, who is my partner. He had 10% of the business. He said, “How many clients do we want by the end of the year? We want consistent growth throughout the entire business. How many clients do we want at the end of the year?” And I said a thousand, and he said, “Why a thousand?” I said, “Well, it’s a thousand, isn’t it? A thousand. Yeah, let’s get it.”

James Ashford:

He said, “It doesn’t mean anything.” He said, “What’s going to show up in your life? What’s going to make a difference in your life?” And it was, “Well, if Becky doesn’t have to work there anymore and come home haven’t been attacked by an inmate at work, if I can pick the kids up from school, if we can live in this house near the kids’ school, if Becky can get this … They’re the things. If we can go on this many holidays a year, that would make a difference. Okay. How much money do we need for that? How much monthly income do we need? Right?” “Well, in order to get there, you need 427 clients. So get your ego out of the way, ditch this thousand pound rubbish. And let’s aim for something that’s going to show up in your life.”

James Ashford:

And at the end of the day, whatever we think about our business, the only thing that’s unique about our business, truly unique about our business is, for me, it’s the only business in the world that’s designed to give me the life that I want. This business was built for that. We can all have these reasons why I want to impact climate change. We want to boost the economy. Beautiful. I love it. I wanted to create generational wealth for my family. I wanted to create options and freedoms for us. I want us to have time together, create rich experiences for ourselves. This business was built for that for us, first and foremost.

John Warrillow:

Love it. And again, so if I’m unpacking the numbers roughly, you figured you could conservatively get four times revenue for a software company. So you needed it to be north of a million.

James Ashford:

Yeah.

John Warrillow:

Maybe a million, two million, three million, four times the four. Gets you to the five. So when you’re doing the stakeholder report in 2017 and 2018 and 2019, you’re tracking to that million pound revenue turnover.

James Ashford:

Yeah. That’s it.

John Warrillow:

And you know that’s going to get you there.

James Ashford:

And this is the thing, right? You see all these software companies, and I don’t think there’s enough of these stories being told, John, right? You get these stories of Zuckerberg and Richard Branson or whatever, billion pound companies, billion pound software companies. You’re not going do it. I said, “You’re not going to do this. That will not happen. Right? They’re so rare. Don’t even think about it.” But you know what? You can build a business that turns over a million pound that you could maybe sell for four or five million pound that will completely transform your life. And it’s real and it’s achievable. And I’ve got people around me who are doing similar things in different spaces, John, but just really good people. And you don’t hear about them. They’re not writing books.

John Warrillow:

I think we’re brothers from another mother. I really do.

James Ashford:

They’re not on shows. They’re not being heard about. But I see these people creating great opportunities for their kids, living good lives, being present, and it’s possible. It’s within reach.

John Warrillow:

Yeah. You and I sing from the same hymn book for sure. Let’s get into a little bit more of what you did to build this to sell. So I’ve heard a few things, and let me just reiterate what I’ve heard, because I think they’re all brilliant strategies. First of all, you envisioned from the very early days who the acquirer was, Xero, Intuit, Sage. Even put it in your own mind the visualization of GoProposal brought to you by, which is great. You had the vision of options not necessarily wanting to sell, but having lots of options on the table so they could thrive without you, et cetera. What else did you do that was set up in a built to sell kind of way?

James Ashford:

Sure. So we implemented great values, which I think was very important from day one. So strong culture and strong core values. We recruited around those jobs. So if you wanted to work for GoProposal, we didn’t want to see a CV or anything. You had to send a video in as to how you’d achieve one of these values in your life, in your work before. And we were very strong on them. And when people talk about values, they tend to talk about the cool things like the table football in the whatever kitchen and pizza nights and stuff like that. But with values, what people don’t talk about is having difficult conversations with members of staff and saying what will happen if people don’t live up to these values. We were prepared to have hard conversations and had a culture of radical can-do and giving candid feedback to people with love, delivering it with love, but firm.

James Ashford:

I speak to businesses now. They’ll have a member of staff and they’re repeatedly going against values and stuff. And I say, “This is the conversation you need to have with …” I’ll say to my team, “This is the conversation you need to have with them. And you need to explain to them that if they’ve not done this by this day, the next time you’re going to sit down with them, you’re going to sack them.” And they come out the meeting and I say, “Did you tell them you were going to sack them?” And they’re like, “No, I didn’t dare say that.” I’m like, “You’re not being fair to them if you do not because you will be sitting down and sacking them. Right?”

John Warrillow:

So you may as well be transparent.

James Ashford:

Yeah. Let’s just be really honest with each other. So we had a brilliant culture, and we fiercely defended it with every member of staff that came in. It served us so well now on the other side of the acquisition. In fact, my operations direct said to me last week, “I am so glad we defended that culture.”

John Warrillow:

Let’s talk about that in a moment. One thing that’s curious to me, though, is we talked about how you grew the business. You wrote the book, you spoke, you did all the video content. You posted it on the social religiously daily. One of the things that strikes me is that that is creating a James Ashford dependency problem. Did you think about the dependency your company had on you being the showman, the magician, the guy spinning all the plates? And how did you mitigate against that?

James Ashford:

It’s a great question. And it’s a double edged sword. So there’s a book behind me somewhere called Key Person of Influence by Daniel Priestley. And he talks about this, which is a great way to scale your brand. Have a front person to the business, write the book, produce the video content, speak on stage, et cetera. And it’s a cost effective way. It connects people to your brand. You can easily scale it. Oh, but then, the other side of that is, well, then if you want to sell it, how’d you get out of it?

James Ashford:

So then I had to contact Daniel and say, “Right, I’ve got your first part of the book. I need to know how we do the next part now.” So what we started to do was two things, really. We started to create assets. So we turned all of the content into assets. So the book became an asset of the business, but then also we’ve got the audio version of the book. I’ve got the film of the book. I’ve got the academy version of the book. That’s produced hundreds of hours of social videos of posts that the company can dine out on for years. Right?

James Ashford:

When I sold GoProposal, I sold the book with it. I sold all of the social media, all of the videos. They became hugely valuable assets. And it was, “You do need me, but how can we digitize me effectively?” Another thing that we’ve done from day one as well, I would make a note of this, you may want to make a note of this, is we had playbooks for everything. So all of my thinking and all of my standards were entrenched in everybody’s playbooks because I’m a believer that it’s your standards that are controlling your results. And people would say to me, “Yeah, but as you scale, your standards will slip.” And I’d be like, “Yeah, if you let them. I’m not letting them.”

James Ashford:

So again, we fiercely defended our standards, and they were entrenched. A lot of my thinking we turned into digital assets within the business. As we got close towards the sale, and this was already planned in prior to the sale anyway, that year was called kill the king. It was how do we now start removing me? So everything that we learned about how we build me as a personal brand, we started to get the team to do it. So the next logical person was the operations director who’s Heather. So Heather also happens to be my niece, but she didn’t get the role because she’s my family. She got the role because she’s a brilliant human being.

James Ashford:

Now, she now has been doing webinars. Today, she sent me an email from a feedback of something she’s done a webinar about. And it’s incredible, right? So my belief is, you do need one personal brand, I think, to get it going. But then how do you have an army of personal brands? Now we’ve sold to Sage. I’ve been saying this to Sage. I said, “Look, you’ve got 13,000 staff. Me and Heather have done two posts in the last week, me and Heather alone, that’s had more views and more engagement than all 13,000 staff at Sage for the last year. Right? Two posts in one week, right?” Heather did a post, got three and a half million views on TikTok. It popped off. Right? I did a post. It went crazy, right, because of everything that we’ve learned.

James Ashford:

And so you’re right. It’s a great way to scale, but then you need an exit strategy to the personal brand. And I think we’ve actually done it quite well.

John Warrillow:

I love the year of killing the king. It sounds perfect and a great segue way for us to get into the sale itself. So what triggered you to want to sell? Was there an event? What triggered?

James Ashford:

Yeah. So what happened was we tipped over a million pound revenue, which I think was a key milestone because that’s the point that … My understanding is that when business is looking at you, you think, “Well, if you can get to a million pound, you’ve got to have some things right.” You need certain things in place to achieve that. It’s a good indicator that there’s some good foundations there. We were doing a partnership with a large company and putting a deal together where they wanted to sell our product for us. And they came back with some commercials for that deal.

James Ashford:

I said some very choice words to them. I said, “You have not created a win-win here. You’ve created a massive win for you and a massive loss for us.” And they said, “You want to negotiate?” I said, “No. We done. I’m not going to negotiate now. You had your chance.” And they said, “Would you consider us buying you then instead?” And I said, “Well, that’s a different conversation. And if the money’s in the right ballpark, then yeah.” And I remember what the guy said to me at the time. He says, “Well, look, we all know how this works. How much will your wife accept?” That’s what his words were to me.

John Warrillow:

And what was your reaction to that?

James Ashford:

Well, I just kept quiet. The truth was I knew how much my wife would accept. I knew the exact amount. I kept quiet to that one, and we started a conversation, and we started some discussions. This was around October, November of 2020. And then another company came to talk to us and then another one did in December. So within two months I had three companies come to us and start talking and get me all excited.

James Ashford:

And in the UK we have Rightmove, which is what you use to buy property on, right? You’re trying to tempt fate, but you can’t help but look on the Rightmove and think, “Oh, what could we buy for this much in the area, right?” And they, “No, stop looking at Rightmove.” And then you’re spec’ing up a Porsche on the Porsche, “Stop spec’ing Porsche, right?” So you can’t help but get carried away. And they know this as well. So they’re getting you fired up, and it all fizzled.

John Warrillow:

Let me just stop you there, James. The three companies, were they all accounting firms, software owners? Did they all own software in accounting?

James Ashford:

Yeah. All within the accounting space. Two strict software companies. One software was part of their portfolio.

John Warrillow:

It’s interesting that you’d have no interest from 2016 to 2020. And then you had three in the space of two months. Were you ever able to draw that back to a post you made, a conference you attended, something that would’ve gotten you on the radar of three of these guys in the space of two months?

James Ashford:

This comes back to social media. People are always wanting to know what the ROI is, “Well, what’s the ROI of that post?” I’m like, “You don’t know. You’ve no idea what the ROI of any post is. Just keep sharing what you’re doing.” You could do a post and it could be to attract a new member of staff. It could be a post to attract an acquirer. You just want-

John Warrillow:

So do you think it was a post that they must have seen?

James Ashford:

I don’t think it was one post. I think it was a constant window into our world. We’ve provided a window into GoProposal’s world. We’re constantly sharing milestones, new team members, new innovations, milestone of a number of clients. It’s a good question, John. I’m not sure I’ve reflected on it before. It could have been some post that had hinted towards something. We had Corona hit, didn’t we, that year. And I think that really shaped up the software space quite a lot. And I think people then started to look to buy. Lots of software companies were starting to buy. I think the events in the world I think perhaps maybe affected things more than what we were doing, and maybe there’s an element of coincidence as well.

John Warrillow:

Got it. That’s super helpful. What was your reaction? I know you didn’t actually say anything, but I’d be curious to know what thoughts went through your mind when acquirer said, “We all know how this works. What will your wife accept?” Just take me through the stream of consciousness inside James’ mind when he uttered those words to you.

John Warrillow:

Hey, I hope you enjoyed my conversation with James Ashford. Be sure to join us next week for part two where James gets into the negotiation process that he went through to sell his business, again, for a healthy eight figures. So great story and a great ending to this story. Listen for that next week. For full show notes to today’s episode, including links to everything we talked about, references and decoding some of the language we used, please visit builttosell.com. If you’re wondering how to support the show, a review on your favorite podcasting app is always appreciated.

John Warrillow:

You can also hit subscribe when you’re there, so you never miss an episode. Today’s show is actually produced by Colin Morgan, a brand new executive producer here at Built to Sell Radio. You’re going to hear more from Colin in the coming weeks. In the meantime, he is managing at Built to Sell on Twitter. And so if you want to reach out to Colin and say hi, be sure to follow @BuiltToSell on Twitter.

John Warrillow:

Special thanks also to Denis Labattaglia for handling the audio and video engineering and a special thanks to our entire community of certified value builders who help us bring our message to you. I’m John Warrillow. We’ll talk to you again next week for the second installment of our interview with James Ashford.