Small business stories: growing the Gild Group

Intro:
Hello, and welcome to the CPA Australia podcast. Your weekly source for accounting, education, career and leadership discussion.

Mo Almull:
Hi everyone, my name is Mo Almull. I'm chair of the SME committee at CPA Australia. Today we'll be speaking to Brenton Ellis, director of the Gild Group. And we'll be talking to him about his journey from public practise to industry and to public practise again and now his merger with the Gild Group. So Brenton you used to work at The Practise, and I reckoned that's for about eight years as a tax manager.

Brenton Ellis CPA:
That's correct. So I started off in public practise with a firm called The Practise in Parkville.

Mo Almull:
That's a catchy name.

Brenton Ellis CPA:
Catchy name, good firm, well established. When I first joined The Practise I was the first graduate accountant that they hired. So there was 12 people in the business, and I was there for eight and a half to nine years. Worked myself up to tax manager.

Mo Almull:
Yeah.

Brenton Ellis CPA:
And by the time I left the firm there was 40 people there, I think now there are about 60 to 70 people. So got to experience a whole lot of growth and a merger, which subsequently I then did in my own journey. But experienced that and a lot of growth through that business.

Mo Almull:
And from The Practise, you moved on to PubCo.

Brenton Ellis CPA:
That's right.

Mo Almull:
Where you ended up being the CFO of quite a few pubs under portfolio. Can you talk to me a bit more about that?

Brenton Ellis CPA:
Yes.

Mo Almull:
And what made you make the decision to go from public practise to industry.

Brenton Ellis CPA:
Sure. So I guess I was at The Practise for eight or nine years, whatever the time was. And I always had in the back of my mind when I first went into public practise that I was going to start my own firm.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
And going through and doing the CPA programme and having experience and meeting other colleagues or associates in the industry, feel always wondered what it would like on the other side, if you like. And I guess I was just lucky enough that I had a really strong relationship with the directors of what is now PubCo and Black Rhino Groups. They were a client of The Practise.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
So I've worked on their file for a good part of five years, a better part of five years.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
And they're previously in building, quite big in building Australia wide. And back in 2012 there's legislation changes in the hotel industry and the guys bought a parcel of five hotels.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
I had the relationship with the CFO that was in the business at the time and she asked me to come on board as a group accountant.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
So yeah, follow that path through building the relationships in public practise, jumped on board and within 12 months I was promoted to the CFO position.

Mo Almull:
Why PubCo? Did you have an interest in the hospitality industry?

Brenton Ellis CPA:
So with PubCo, the reason that I fell into that was because of the relationship I had with the directors of that business when I was in public practise.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
Hospitality is always been a part of my life from when I was younger, the nightclub days in early '20s to then becoming a father and now it's more breakfast at the cafes with the baby chinos. But hospitality has always been a big part of my life. It's something that I have an interest in. And when I started my own, when I became a tax agent and started my own public practise firm, my clients started as friends and family that I grew up with. A lot of my friends had hospitality venues. So hospitality was something that I naturally had a passion for, but also fell into.

Mo Almull:
Mm-hmm (affirmative). PubCo had quite a few acquisitions during its growth period. Can you talk to me about your role in ensuring that the acquisitions and funding or the due diligence and applying your public practise skills to that need.

Brenton Ellis CPA:
Yep.

Mo Almull:
And what did you gain from them?

Brenton Ellis CPA:
So I guess, good question. It was a whirlwind. I was at PubCo for six years and it was a whirlwind. We started off as I said, the directors bought a group of five hotels, and within five years we had 21 hotels.

Mo Almull:
Wow.

Brenton Ellis CPA:
So by the time we'd settled one we'd bought another one. And linking back to your question, my public practise skills... When I was at The Practise I was lucky enough to start when there was 12 people. So from day one as a grad, I was always in the meeting with the directors of The Practise, and fantastic accountants and really good advisory skill set. So I built my advisory skills in public practise and also went the compliance. When I was with PubCo and stepped into industry, the main skill set that I transferred from public practise was around the advisory skills that I had built up from the time at The Practise, and also around do usual day to day, the compliance, making sure that cash flow was managed, things were lodged on time, planning, tax planning, a lot of strategy work. When I moved into the CFO role 12 months later, that's when I really took on a lot of dealing with the banks.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
So our main funder was the ANZ bank, and the team in there are fantastic.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
So the team at ANZ and the corporate team in Melbourne, there's not many of them, like 30, and for the amount of wealth that they look after those guys are fantastic. And that's how I actually met you.

Mo Almull:
Yep, yeah.

Brenton Ellis CPA:
Because you're in the emerging corporates-

Mo Almull:
At the time. Yeah.

Brenton Ellis CPA:
And we were also introduced through CPA.

Mo Almull:
Yeah.

Brenton Ellis CPA:
So dealing with the ANZ guys... The due diligence process was, it was really applying a lot of skill sets to be able to look at a set of financials on a new hotel that we were looking to purchase and make sure that the numbers made sense.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
Because when you're buying and selling businesses there could be numbers that come from any direction.

Mo Almull:
Yep. And there's a soft skill that you would apply to that sort of stuff and that could include your negotiations or verifying things beyond the numbers. I wouldn't say anyone can look at a PnL balance sheet and say, this is what it looks like but there's other drivers to the hotel.

Brenton Ellis CPA:
Yeah.

Mo Almull:
And things that you don't necessarily see in a set of financials. How did you gain those skills? Because I reckon a lot of accountants who are in a public practise, especially on a graduate level, they're sort of taught to do the compliance bit and they sort of miss out on the soft skill or the street smart component of things, unless they have that interaction with the directors and working on side, seeing the things that are not understatements.

Brenton Ellis CPA:
And I guess that's where I was lucky in both my roles up to this point in my career where when I was with The Practise I had a lot of one on one time and built a really good relationship with the directors of The Practise. So that's where I built my advisory skills.

Mo Almull:
Yeah.

Brenton Ellis CPA:
When I went into industry, again, I had a really strong relationship with the directors of PubCo and Black Rhino and that's where I really learned the negotiation skills. So the directors would hit that up. So typically with the hotels it's done through an agent.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
So there's one particular agent in Melbourne Cropley Commercial that sells 90% of the hotels.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
Working in with the agent and also with the directors, I would sit back, especially in the first couple of years, sit back and take in all of the skills that those guys had. And these guys aren't accountants. So very good business people, but no accounting background. So as I would come at it purely from a numbers perspective in the first instance, these guys would come at it more of a... For example, we might buy a hotel and pay an extra million dollars for it. And looking at it for the long term, yes, we pay a bit more now but we have this thing for the rest of our life to make the money back. So those kind of skills that I guess coming from a traditional accounting background you might say, oh, these numbers don't stack up. Want that completely off the table because we're looking at the bigger picture here. So more commercial skills that I learned dealing there. I guess particularly then from an accounting perspective, the way that hotels are purchased are multiple profits are multiple of EBITDA, depending if it's a lease or a freehold. And my main role the whole time that I was there was to provide the information to the directors so that they could negotiate and make a comfortable offer to buy a hotel.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
So it was things like looking at the profit and loss, do the margins make sense. If I got 30% cost of goods, have I got 30% wages? What is my rent as a percentage of the turnover? Understanding those industry benchmarks.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
Obviously every industry is different, but particularly with the hotels.

Mo Almull:
Yeah. And there's a gaming component that you have to get across.

Brenton Ellis CPA:
Yep.

Mo Almull:
And the legislation and the tax component of that. So in pubs and the ones that are you sort of were involved in, there was also a gaming revenue component which some would say it's a niche and that requires a lot of due diligence and understand of what that represents and managing the risks as well. Can you tell me more about that?

Brenton Ellis CPA:
It's definitely a niche area with the pubs. And I guess I was lucky enough to have the experience there to be able to transfer that I guess, and also apply my skill sets that I had learned in public practise.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
So I guess, through the due diligence process, the traditional accounting skills that are brought over that really assisted the directors with the negotiations were to do all the checks and balances, to make sure that the numbers in the financials that were provided were all stacking up. And there's a lot of publicly available information as well, whether it's industry benchmarks or VCGLR data that we could cross check to make sure that all of the numbers stack up.

Mo Almull:
So the reason I asked that, I had a bit of exposure with pubs. And that relates back to my restructuring/insolvency days or my accounting days. We had a group of two pubs that we were appointed by a bank and we had to sort of trade it on, introduce new menus, restructure staff, look after the gaming compliance and returns and also build a cash flow and effectively get the pubs and the leaseholds to a stage where we can sell it to a third party. It was probably the most exciting job I've done because there's a lot of moving parts in a pub that not a lot people appreciate. Things like staff, your liquor licence, your compliance. It's a living, breathing thing that's definitely taught me a lot in the way I approach business even now.

Brenton Ellis CPA:
Yes. The pubs, did you save the pubs mate?

Mo Almull:
There were sold. Yeah.

Brenton Ellis CPA:
They were sold?

Mo Almull:
Yeah.

Brenton Ellis CPA:
Great.

Mo Almull:
One was sold to the landlord, and one was sold to a third party.

Brenton Ellis CPA:
Right.

Mo Almull:
Private equity firm.

Brenton Ellis CPA:
That's good. Good experience. And I guess from my interior, I love the pubs. I love the pub industry and the hospitality industry in general. And I remember when I first went over to the pubs, I would come to work... So most of these venues are 23 hour licences, closed for cleaning and then reopen back up. Sometimes I would come to the office, which our head office was above one of their hotels, and there would be people sitting at the bar at 7:00 in the morning having a beer. At first I was like, whoa, how does this work? But it's people from night shift who are finishing their night shift at 7:00 in the morning or 6:00 in the morning, coming to the pub having a beer and then sleeping all day.

Mo Almull:
Right.

Brenton Ellis CPA:
There was a lot of intricacies like that of the industry. But I guess that was one of the things that was attractive to it. Or going into any industry that you get to specialise in an area, which is what I've done subsequently, I guess we're going to talk about in a minute. What's happened since I left the pubs, being able to specialise in a particular industry.

Mo Almull:
That's great. So when did it first occur to you that you would set up your public practise or firm and why?

Brenton Ellis CPA:
So as I said, when I first went into public practise I always had the intention one day to start my own firm. I always wanted to put my own stamp on something. I guess I was lucky enough to come through the... I started my career when I was 19 years old. Went through all the changes of the online accounting systems, how that all changed the way that we work, paperless office. I guess with The Practise I was very much at the forefront with embracing all of that technology, those technological advances that came through. And I always thought that I wanted to put my own mark and see how I can do that. Actually leaping out and starting my own firm, which was Network Financial Group. I started that on the 1st of July 2018.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
I was assisted with the directors of PubCo and Black Rhino. So after going through the whirlwind of purchasing all the hotels, two directors in business for a long time decided to split the two groups in two.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
We did that. They essentially said to me, "Mate, you can have a job with us for the rest of your life. But we know that you wanted to start your own business one day, so now's the right time, go ahead and do it. You'll become a bit stale with us and as a sign of good faith we'll come on and be clients." So I'd built a handful of clients as well during my time with them, which they are aware of. So that's what really pushed me to kick that off.

Mo Almull:
Apart from lack rhino and PubCo, you said you acquired a few clients by yourself along the journey. How did you do that? And who did you reach out to to, I guess have a trial on the side of what your future firm could be?

Brenton Ellis CPA:
So I have never done any marketing or advertising whatsoever.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
All of my clients have come from word of mouth referrals.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
So my very first client was a friend of mine that I grew up with.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
We went to kinder together, we went to primary school, high school, and we're still friends. Now our kids are friends. And he started his own carpentry business years ago. And he was my very first client, I remember we were at a party somewhere and he said, "Hey, can you do my BAS." Set me up, no problems. I remember the first time, I think I sent him an invoice for $150. And I had to build myself up to call him and say, mate, this is how much it's going to be. From there it was all just word of mouth. So naturally from their friends and family.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
And then it just gets bigger and bigger. I guess I've always prided myself on giving top level service to anyone. Whether they're 100 grand client or $100 client, which has been beneficial to me but also being detrimental, having a big workload. But it all just started from word of mouth.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
All just started like that.

Mo Almull:
So often in public practise or having your own firm, you will have some clients that seem to be quite difficult to deal with or argue about invoices or anything like that. When you're first starting out you want to have, I would assume, every client that you can get your hands on because you're new. Where do you get to the point where you say, this is my proposition to the market and this is what I want to do. And maybe, I wouldn't call them bad clients, but the people who waste your time or don't pay your money. When do you get the confidence to do that? And how you able to do it? Because not a lot of people do that. One of my clients was an accountant, and I remember he had 10 clients that he knew really well that they were always late with paying. And they would question the time on certain engagements. And it was causing him a lot of grief and cash flow and he didn't need that. Because your time is money sort of thing. He took a point and he said, "Well, that's it. I'm not going to deal with these people again, even though I'm going to lose the revenue."

Brenton Ellis CPA:
Yeah.

Mo Almull:
Did you ever go through that experience?

Brenton Ellis CPA:
Yes. I'm going through it right now. So what I found with me, I always, always had a wage. So when I was with the pubs, I had a wage. It started off with friends and family, very close, I knew everyone. Even if people were a little bit late with paying, they will always pay. I would never chase that hard. As it got bigger and bigger, the group of clients grew bigger and bigger for people that never imagined being introduced to. And to overcome that, two things. Engagement letters upfront, being completely clear with the services that we're offering.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
This is what we're committing to you. This is what you're committing to us.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
And also embracing technology that requires clients when they sign their engagement letter to enter their bank details. So we will direct [inaudible 00:18:55], when the job's finished or when the service is finished. Now that's where we're at now. So when I first started, as I said, it wasn't a big problem because I wasn't relying on the cash flow. When I took the leap and started the business full-time, there were people that did pay with difficult, that were using a lot of my time. We go through the process now of shedding five to 10% of our clients every single year to enable new ones to come in. Now, relationships change over time.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
So some clients that we've had great relationships with when I was just me to then having 10 staff to now having 25 staff, the relationship has just naturally changed as it does in life. So I think it's just identifying when things aren't going that well, trying to rectify it, trying to put new people on the file. And if it doesn't work, you got to go unfortunately. So the first time I 'sacked' a client was about six months ago, and it was a massive weight off my shoulders.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
And at first I was really concerned about what's my reputation? What impact does it have in my revenue? Is the whole thing going to tumble over?

Mo Almull:
Yeah.

Brenton Ellis CPA:
And I think it's just all the natural running of a business, things that go through your head. But it's very liberating to be able to move a client on and just say, hey, we're not right for you.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
There's someone right for you out there and it's not us. And it just frees up the time to enable a better client to come in.

Mo Almull:
As you grow in your firm, one of the challenges that you just touched on, the relationships that you have with your clients can be quite tight when you get started, but then you have too many clients just for you to work on. And you have to get qualified staff that aren't just good with the numbers, but are good with relationships and perhaps and trust them with dealing with the client directly. Some people find that hard to let go and letting someone else manage their clients. How did you, I don't know if you had that issue but if you did, how did you manage to go through that?

Brenton Ellis CPA:
So when I first started on the 1st of July 2018, Network Financial Group, I started with me and one qualified accountant, a guy that I worked with in a previous life. And I remember saying to him at one point, I'm like, mate, if I can't pay your wages, don't worry, I'll be good for it, you'll get it. And it was nothing like that because the business just exploded. So within a month I had four people working for me. Fast forward 12 months and I had nine people and three offshore staff as well.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
So all word of mouth, no advertising. Now, sounds great but it was hell. The first year of business was absolute hell because-

Mo Almull:
Did you get any sleep? It doesn't sound like it.

Brenton Ellis CPA:
No. And I had a newborn baby at home as well and a two-year-old, which didn't help.

Mo Almull:
Wow. Okay.

Brenton Ellis CPA:
So, it was challenging. We're getting through it now. But the biggest problem that I had is I didn't have the right people. So I had nine people, sounds good. All these numbers, all this business and this revenue, but I was still working 80 to 100 hours a week.

Mo Almull:
Wow.

Brenton Ellis CPA:
Anxious, didn't want to look at my phone, constantly on silent, just waiting for the next person. So I'd grown so quickly and I didn't have the right people around me. And I actually struggled to pass on the relationships.

Mo Almull:
So how did you fix it? Or how did you overcome that?

Brenton Ellis CPA:
So to overcome that, merge my business. So my current business partner at the Gild Group, Paul Luczak, another CPA member. We've known each other for about five or six years through mutual clients. And we started talking and Paul was talking to me about the model that he had in the Gild Group, which was around the onshore managers offshore processing to effectively have your key staff in the country that are client facing, managing the relationships and the works in processed offshore. And at first I was like, no, no way. I will never offshore. We dabbled in it at The Practise in the early years and it didn't really work. And you hear all the horror stories. And I got to the point where I was like, look, I'll give it a go.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
We'll try this for three months if it doesn't work. And it's the best decision that I've ever made. So two things to answer your questions. Number one, the way I overcome it was merged my business in with the Gild. So automatically we had a business partner to bounce things off, which was really good. Being on your own is difficult.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
You basically deal with all the problems, all the stresses, everything that comes with it.

Mo Almull:
You don't have a bouncing board.

Brenton Ellis CPA:
You don't have a... No.

Mo Almull:
Because you know you can't where you can go junior staff. Can't be, what should I do here?

Brenton Ellis CPA:
Correct. Yeah. So I started with qualified, I had bookkeepers and I had practise manager and a graduate. And long story short, going into the merger all of this stuff came and went.

Mo Almull:
Mm-hmm (affirmative). So can you tell me Brenton, when you had your firm and now you've gone through the merger with the benefit of hindsight, what are the two things that you would have done differently?

Brenton Ellis CPA:
Two things I would have done differently? Taking my time to make sure that I had the right key people around me. So, because I grew so quickly, as I said, within a month we had four people by six months, by Christmas time there was eight people. I was just grabbing people left, right and centre, the clients coming in the door. Because of my experience in the hotel industry, I was lucky enough to be given some pretty decent referrals in the first year of Pub Groups. And so I was growing rapidly. And I would hear someone, oh, my friend is looking for some bookkeeping work or a graduate accountant wants to get in the role. My graduate accountant that started with me, he was actually from the house managers from one of the pubs. So I was just grabbing people left, right and centre as I was growing. And looking back, it should have been take the time to get the right people around me so that we can deliver the right service.

Mo Almull:
Okay.

Brenton Ellis CPA:
Also, having a business partner is great.

Mo Almull:
Yeah.

Brenton Ellis CPA:
Some things you get caught up in your own head because there's a lot of stress that all sits with you. Having a business partner, even since the merger it's been three months now since we merged and I'll wake up some days and be like, oh look, this is a problem that's playing on my mind. And my partner will be like, well, this client's got this issue and he's like, don't worry about them, let them go. And I'm like, okay. It's just like that. Because sometimes things seem so bad to you but from an outsider's perspective it's not that bad.

Mo Almull:
Yeah.

Brenton Ellis CPA:
Sometimes you just need that in business.

Mo Almull:
Correct.

Brenton Ellis CPA:
It's like anything, it's like any friendships, relationships, all of that kind of stuff. You think things might be going good or bad or however it rolls and yeah, it's definitely good to have that partner, that sounding board there.

Mo Almull:
That's good.

Brenton Ellis CPA:
But the right partner.

Mo Almull:
Yeah.

Brenton Ellis CPA:
Because I've also been in businesses outside of the accounting industry where we've had the wrong partners.

Mo Almull:
So the right partner for-

Brenton Ellis CPA:
The right business.

Mo Almull:
... the right business. And it really depends on the person. And people can be on polar opposites and still work great together. And they could be very similar, but then clash. So the right partner for you. Did you specifically reach out to that person or did you just kind of jelled? How did you know he was-

Brenton Ellis CPA:
We had a mutual client.

Mo Almull:
Yeah.

Brenton Ellis CPA:
And he actually reached out to me. He could see how quickly I was growing.

Mo Almull:
Yep.

Brenton Ellis CPA:
So I had quite a presence, I guess you could say, in the hospitality industry, particularly around the pubs.

Mo Almull:
Yeah.

Brenton Ellis CPA:
And my business partner Paul, he's predominant in the music industry.

Mo Almull:
Yes.

Brenton Ellis CPA:
He works for a lot of the biggest touring bands and acts in the country. So we both had a niche in our two different industries. That was one reason to put the music and the hospital, works really well together. I've also got a lot of building and developing clients.

Mo Almull:
Yeah.

Brenton Ellis CPA:
So that that tapped on as a third to our business. So the niche of the hospital and the music worked really well together and it made sense for us to put that together. Now also have a lot of clients in building and construction industry. So I guess there's those three niches that we really target. But Paul and I are quite different. He's a lot more conservative than I am, which is great from a business perspective. He's always throwing APES and CPA requirements and all these kind of things in front of my face. But for the longevity of the business, I'm all for.

Mo Almull:
Yeah.

Brenton Ellis CPA:
Its just in my experience that we grew and which I'm all for. One big thing that we both said to each other from the start is there's no ego.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
And that is really been key for us. It's so new, but I think you can tell early on when you meet someone what their personality is like. And one thing that we both said to each other from the start was, leave the egos at the door.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
We're here to run a business and we're here to build an awesome business that everyone wants to come to work every day and high five each other and do the work. It was like at the end of the day we're going to do the work but have a really good environment. And I think the fact that we both were pretty clear on, I'm not better than you, you're not better than me, we're here to do this together.

Mo Almull:
Yep, yep.

Brenton Ellis CPA:
We're partnering, essentially. What does the nature of the word or the meaning of the word.

Mo Almull:
Yep, yep. For our listeners who are listening in, when I jumped on the website and looked at the Gild's group and saw that they're managing one of Australia's, a lot of Australia's famous musicians and touring bands and Brent has experience with hospitalities and pubs, and I don't think there's an accounting firm that does that. I haven't come across one.

Brenton Ellis CPA:
No.

Mo Almull:
And I remember telling you, like is that the coolest firm.

Brenton Ellis CPA:
That's what we're going for Mo.

Mo Almull:
Okay.

Brenton Ellis CPA:
That's what we're going for. But no, look, there's definitely firms out there that specialise in particular areas. So whether that's in medicos or-

Mo Almull:
Oh, absolutely. But music and hospitality-

Brenton Ellis CPA:
Music and hospital, look, I'm not aware. As I said, there's definitely firms that have hospitality clients, there's definitely firms that have a few music clients. But for us to put that together with the size that we are now I think that we're pretty unique. And we have the industry skill set. So Paul started in a band, I've worked in the pubs. I own a cafe myself as a side business as well. So we've got the industry experience and the industry contacts.

Mo Almull:
So can you tell me about your cafe and how did you get involved in that? Was that during your practise years or was it during the PubCo?

Brenton Ellis CPA:
So towards the end of the pubs.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
Obviously being in the pubs every day, come to love the industry, love just being around the staff the noise, the atmosphere of it all. And yeah, opportunity presented itself. So we have The Turtle Cafe in Elwood. And in hindsight, doesn't matter what business it is, every business needs a lot of time. And we started with those four partners. Long story short, three years later, there's me left with now a new partner. There's been pressure on different kinds of relationship which has been challenging. Staff, getting it right. My focus was starting my accounting firm when this business also needed, it was a new business as well, so it also needed a lot of time. So in hindsight, it probably would have been a good idea to look at, I guess a side investment after the accounting practise was established or a bit more mature. So yeah. But again look, it's from my clients perspective, part of the reason I wanted to go in was to have a venue to be present in the industry and it also enables me to service my clients better because I've got a lot of hands on experience. Not that I'm pouring coffees, but I definitely understand the industry benchmarks and the kind of advisory work that I can do with my clients buying and selling businesses. Who do you deal with? Where do you go?

Mo Almull:
Yep. And so, Brenton throughout your journey you've had your firm, had a café, I'm just curious about, have you ever thought or I'm sure you have, about succession planning and how does that fit in to what you're doing? For example, if you have an interest in a cafe, how do you ensure that this cafe will keep going without your input or not waste your time on the smaller stuff and for more business continuity.

Brenton Ellis CPA:
So I guess so. Succession planning, definitely something I talked to my clients about, depending on the stage of their life cycle or their business cycle. For myself personally if something was to happen to me, it's more so to make sure that my wife and kids are looked after. So succession planning from that angle is making sure that I've got the right legal structures and unit holders and shareholders agreements in place to make sure that my family is looked after. But from the cafe's perspective, it's making sure... So it's been a journey to find the right business partner, is there, she's on the ground. She's an awesome operator, and she runs the place on the back end. My guys at the office pay the bills and do the payroll and do the monthly reporting and all that kind of stuff. But again, it's having the right partner to make sure. From the Gild group side of things, I guess it's a little bit different. Again from succession planning, it's building the right team so that the clients have relationships with some key people that can look after him.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
So clients are looked after. From my family's perspective, again it's the legal structures that make sure if something happens to me, my interests are going to get paid out to them.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
And with our unit holders agreement, the existing partner Paul will take over my interest and run the business.

Mo Almull:
Mm-hmm (affirmative). That is good. More on the succession planning, a lot of accountants or like a one man shop accounts who have been doing it for 20, 30 years, there might have 50, 60 clients that are very loyal to them. And they get to an age of retirement, but they've been running the firm or the practise by themselves and they might have one person. They find it really hard to either sell their book or get someone to buy it because the business is so heavily reliant on them, sometimes it just doesn't happen. And do you have any tips for people like that, who are going through that experience? How do they get around it? And how do they ensure that the firm continues in some shape or form.

Brenton Ellis CPA:
Give them my number mate. We're actually bringing in a new parcel of fees at the moment. And similar to exactly what you're talking about Mo is the key person there, the director of that business has all the relationships with the client. So it's integrating into the Gild group at the moment where again, the people will then take the relationship off that key person. Who knows what's happening long-term, she may retire in 10 years, may stay on, who knows. But by that point, those clients would be absorbed up and that person would exit the business with some kind of reward for their work over the years.

Mo Almull:
And for accountants that are facing the same sort of situation, apart from giving them your number, what's a good avenue for them to reach out to or contact to see what their options might be? Because often, they're very stuck in their own workload and they don't have the time to think about it until it's a bit too late.

Brenton Ellis CPA:
I guess I can only speak from my own experience and it's, my network is always been key to me.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
I was involved with CPA, being the chair of the Emerging Leaders Committee is essentially why I'm sitting here.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
Knowing you and couple of the other guys from the organisation. And for those kind of people I would say, build your network and get out there and keep yourself active and keep yourself current because like how I merged with the Gild group, didn't happen like that.

Mo Almull:
Like that?

Brenton Ellis CPA:
Like that. And if I didn't know Paul from putting myself out there and going to industry events, and we just got talking and it just happened. And if you're a sole practitioner from out in the far suburbs of the country and you're coming to a CPA drinks event or something along those lines, you might meet someone that they're looking to get out and someone like me, we're looking to acquire we're in a massive growth phase. You could just meet someone there.

Mo Almull:
Yeah.

Brenton Ellis CPA:
Or the stars can align.

Mo Almull:
That's a good point. Because I often hear from accountants who have their own practise who are thinking, why would I need to network with my competitors. And I think that's a very close-minded view.

Brenton Ellis CPA:
Yeah.

Mo Almull:
Because we do have a lot of great accountants including yourself that talk to people and attend discussion groups and things like that, and they meet people and they make the most out of the network. But there's a lot of accountants that don't do that.

Brenton Ellis CPA:
Yeah.

Mo Almull:
Just don't see the point. So if you were working, and I'm just making it up, if you're working for Grant Thornton in tax, why would you hang out with a guy from [crosstalk 00:38:41]?

Brenton Ellis CPA:
Yeah. I think the mid-tier and the big four are a different beast in their own. And there's no doubt that our business at Gild group is definitely heading towards that mid-tier, so I'll probably have a different answer if you ask me back in 10 years time or however that works. I definitely want to find out what every competitor is doing. Because I'll find out, if you're making a million dollars, I want to find out what you're doing because I want to make a million dollars. And if you're doing something that's market leading and firm of the future type stuff, I want to find out because I want to see, can I replicate that my own way or can I do it better?

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
And that doesn't matter whether it's in the accounting industry or any industry, it's like even with the pubs I still know who's buying the pubs, who's selling the pubs, are there any newcomers into the industry, what's their background, how did they do it. And then applying that to myself personally, but then also in the business and then with my clients as well. So I'm all for networking and finding out. And it's been really beneficial for me in my career.

Mo Almull:
So you'd definitely recommend people to jump on the CPA Australia website and find out something that's close to them and just get into it.

Brenton Ellis CPA:
100%. Sometimes it's painful. It is really painful. One thing though is just always show up. Always show up and you just never know. You never know, you could spend a year going to networking events and going, God, I just wasted my time. And then go to one and meet one person or one client like, I know you now, like I know you from various events that we've been to, and then we start to run into each other. And then we go to events. And I'd come up and say, hey Mo, how you going? And all of a sudden, bang, you're with some person. I think that networking is key.

Mo Almull:
That's awesome. Now that you mentioned the Gild group, what are the future plans for the group and Paul?

Brenton Ellis CPA:
So we are in significant growth phase. We haven't started any marketing strategies. Again, because of our industry contacts, clients are naturally coming to us again, through our networks.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
We are really building long-term sustainable firm, where everyone loves coming to work, they're massive advocates of business. I guess we're pretty progressive when it comes to technology, the way that we do business, the way that we deal with our clients. I'm the most formally dressed in the office, and I still just wear my jacket and my pants every day. But we really dress for the clients. I guess, flexible working arrangements. There's one guy in particular comes to the office once a week because he lives over the other side of town, but delivers to his clients A plus standard.

Mo Almull:
Awesome.

Brenton Ellis CPA:
Like he's a gun. So we're looking to acquire. We're looking for organic growth, we're looking to acquire businesses. The next 12 months is really defining our role. So myself, because of my experience with the pubs with basically flipping all of the systems and processes on their head, it's looking at that in our business.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
And my partner is really looking at managing the HR and making sure that the staff are really engaged. And onshore and offshore, we've just got an awesome team that everyone loves.

Mo Almull:
Mm-hmm (affirmative).

Brenton Ellis CPA:
And then in turn, the clients are happy.

Mo Almull:
Yes.

Brenton Ellis CPA:
And they will be advocates and we'll just continue to grow.

Mo Almull:
That's perfect. Yeah.

Brenton Ellis CPA:
That's our plan for now.

Mo Almull:
Awesome. And do you have an article coming up soon?

Brenton Ellis CPA:
My partner has an article actually. Yeah, about the Gild group. So yeah, we'll come out and talk in a bit more detail about the business.

Mo Almull:
Okay. Look forward to it. Well, thank you Brenton for joining us today. And thanks to our listeners for tuning in as well. It's been fantastic. I've learned so much about you that I haven't done before. But I reckon there was a lot of lessons in what we spoke about that people in either SMEs or firms or public practises or just regular business takeaway and learn from.

Brenton Ellis CPA:
Thanks for having me. And I really appreciate it, it was good to share. It's been an exciting and a short journey. But made that with many more mistakes to be made and many more lessons to be learned. So appreciate having me on mate.

Mo Almull:
Thank you.

Outro:
Thanks for listening to the CPA Australia podcast. For more information on today's episode, please visit the show notes at www.cpaaustralia.com.au/podcast. Never miss an episode by subscribing to our podcast on Apple podcasts, Spotify or Stitcher.