Scott Evans

Transcript

Introduction

Brett Kelly:
Great to see everybody. Scott’s a really wonderful guy who I wanted everyone to meet, so it was a good excuse to bring him along today to share his story. I always like to start at the beginning, Scott—where did you grow up, what’s your family situation, and how did you end up farming birds?

Scott Evans:
Okay. First of all, thanks for having me. It’s great to see everyone, and lots of familiar faces, and thanks for the kind words. I’m not sure who wrote that bio, but I owe them one! So, I was born in Penrith, and at the age of two, we moved to the US for two years. Dad got transferred there; he was with BorgWarner Australia, so we spent two years in the US, then two years in the UK, and then two years in Port Elizabeth, South Africa. By the time I was eight and a half, I’d lived on four continents, and I’d learned to embrace change at a young age, which has been a great attribute and experience to have in later life.

We came back to Australia, obviously went through my schooling, and I used to play a lot of golf. We lived in North Rocks when we came back. I joined Muirfield Golf Club as a cadet at 12 years old, and I purposely played with different members every week because I just loved meeting new people. Even back then, golf was a game where mainly executives or business owners played—primarily family business owners. And I just loved learning from them, even at 12 years of age. I met some amazing people, and fast forward to when I’d finished my schooling and studies, a gentleman I’d known for all that time and played golf with many times, tapped me on the shoulder. He was the MD of a large international family trading business, and he said, “Mate, before you talk to anyone else, I want to offer you a job. Come and spend some time with me.” So I did. He was a good bloke and gave me a great opportunity.

That company was called Craig Mostyn & Co. They’re still very dear friends of mine today, many years on, and we still do business together. They’re now based in Western Australia and are one of the biggest firms there, doing incredibly well. Ironically, this goes back a bit because I was lucky enough, or honored, last year to be asked back to my primary school as the guest speaker for their hundred-year celebration. I was the school captain, and they wanted me to come back. Sitting back and reflecting on my life, I thought it would be good to talk about my time at school and what I’ve done since, which, mind you, has been 42 years since I’ve been back to that school. And so, reflecting on my life, it led me all the way back to Muirfield Golf Club, where every single aspect of my life, every door that’s opened for me, has come from.

First of all, this gentleman who took a liking to me gave me my first opportunity and introduced me to international trading, which is my absolute passion. I also met my wife there, because she’d had a fallout with her father and left the family business. She went and worked for Craig Mostyn. Two and a half years after meeting, we got married. Obviously, we went on to build a family together. Through meeting her, I met her parents, both of whom had immigrated from Portugal. They came across to Australia separately. My father-in-law, at 17 years of age, with a shirt on his back and an empty suitcase, ended up in the Snowy Mountains Scheme. He was a cabinet maker by trade, but he had a real passion for hunting. He used to go hunting every weekend.

Now, I’ll try to wind this story up pretty quickly, but he had a fire on Christmas Eve in his warehouse. He’d just bought out his business partner a month earlier. He was uninsured, and everything went up in smoke. He was devastated. He spent the next 12 months fulfilling orders just to make enough money to pay off his debts. But in the meantime, he had this hobby in his backyard aviary at Bondi Junction, where he used to raise quail and guinea fowl. He’d process them in the kitchen, mainly for their own consumption, but then he started doing it for relatives as well. So, he had this little side business running on the go. He’d lost his mojo for cabinet making after the fire and decided he wanted to explore the game industry. Everyone he spoke to thought he was a bit of a raving lunatic—how was it going to work? But the benefit of his furniture manufacturing experience was that he already supplied all the restaurants. And mainly restaurants of the Spanish, the Portuguese, the Italian variety. And because of the Snowy Mountains experience he had, he could speak about seven different languages and had a great rapport with a lot of these people through years of supplying furniture. So, he then embraced them as customers as well. So, the kitchen became the abattoir, the Volvo became the delivery vehicle, and this all started from about a hundred birds a week.

So, when I met him in 1993, the business had been running for almost 20 years. It was turning over a million dollars at the time. It employed 12 people, of which eight of them were family. And he asked me if I’d consider coming on board and giving him a hand. And that was mainly because I’d sit around the dinner table trying to wave the white flag and get them to stop fighting because they were... Arminio's wife, Olivia, worked in the business. Linda was back in the business by this stage. Her brother Mark, my brother-in-law now, was in the business as well, and they just couldn’t see eye to eye.

And because I always tried to talk them through it and give them ideas and systems over the course of 12 months, Arminio said, “Look, why don’t you come in?” And I said, “Look, Arminio, I’ve been around family businesses. I’ve worked for a family business.” I hadn’t married his daughter yet, but I was engaged, and I said, “As much as I’d love to help, I just don’t think it’s the right thing to do.” And he just persevered and persevered. Anyway, I got married and two months later I joined the business, but I joined on the proviso that it was only going to be for a couple of years, that I’d come in, and I’d help set up the systems, processes, and disciplines.

My father-in-law, Arminio, was an incredibly hard worker. He was very good with his hands, but he was very old-school. His father passed away very early, and he had a mum and three sisters who doted on him. He was very rough around the edges but an incredibly hard worker. And it’s not that easy building a business when you need a team around you, and you’ve got to embrace them, empower them, and take them on a journey. Well, he was just old-school—screaming, yelling, swearing, and occupational health and safety? That was just a barrier. “What do you mean? You’re kidding. By the time you get the ladder, you could jump from that roof to this roof.” All these types of things.

So, we had this deal and I said, “Look, let’s not waste the last 20 years. Let’s knuckle down, do everything we can for the next two to three, professionalize it, and let’s sell it. Then you can get on with your next venture.” Because he’s a real entrepreneur, and he’s one of these guys who arrived in this country with nothing. Even when he established something, because while the business wasn’t large, not only did he have a million-dollar turnover, I don’t know how, but he also had a million dollars worth of debt. Payroll tax had never been paid, and it should’ve been.

So, there were some issues that were deal-breakers that had to be fixed before I came on board. Anyway, to cut a long story short, about 18 months in, he came to me and said, “How good is this?” He said, “Now the business is growing.” In 18 months, we’d grown it to a $4.5 million business. We’d employed 20 people, no exaggeration. There was not a family member in there other than Linda, myself, and her brother, because all the family members who’d been working there were either ripping the business off, driving trucks unlicensed because they’d lost their licenses and hadn’t told anyone. It was just that. So I was off the wedding invite list, the christening list, and the Christmas party list for a while.

My brother-in-law, Mark, ended up leaving the business, not through my doing. He just couldn’t get on with his dad. His ideas were deemed stupidity, and two weeks later they were his dad’s best ideas. After being there before school, after school, and during school for so long, he just thought, “Enough’s enough.” So, he left.

Anyway, when my father-in-law said, “How good is this? This is great, we’re growing, we’re profitable,” I said, “Yeah, I think it’s time to take it to market.” And he said, “No, no, no, no. Let’s not take it to market. There’s so much potential here, and together we can do so much.” I said, “Hang on a minute, that wasn’t our deal. This is your dream, not mine.”

I should preface by saying that where I was employed at the time, I was 20 years younger than anyone else at my level of management. So, I could see that there weren’t going to be a lot of opportunities coming my way anytime soon. I loved the international trading side of things, but I was running a division rather than running a business. So, while Game Farm was a much smaller business than the division I was running, it gave me the opportunity to test my skill set. So, it was a win-win. It wasn’t like I just did it out of obligation. And I said to him, “Look, Arminio, that’s not the deal. You need to honor your deal.” And he said, “Okay, but I just feel like the pressure’s all gone.” I said, “Yeah, the pressure’s off you, but it’s on me, and it’s not where I want to apply my time.”

So, he understood. And at this stage, we’d also just gotten our export license. So we were embarking on that export market, which was where my passion lay. So we went out to market and we had quite a bit of interest because we were vertically integrated. We had the breeding operation, the hatchery, the processing plant, the distribution center, and the export license. And we were only operating at about 35% of the capacity of all the facilities we’d built. So, the blue sky was great, there was no further CapEx to spend, and we had a good team around us. The systems and processes were in place. Obviously, I hadn’t been through such a process before of selling a business. I was only 27 at the time, and I didn’t realize that there was going to be a lot of interest. But the biggest challenge that I didn’t think of was that they wanted to handcuff me and two others in the business for three to five years to ensure that they protected their investment before they actually took complete control. And I turned to my father-in-law and said, "Hey, I was willing to take a bullet for the family, but there’s no way I’m going to spend the next three to five years of my life working for someone else while I’ve got so many things to do." And this went on. We met with other people. It was just this common theme, so it wasn’t going to work. And he said, "Where do we go from here?" I said, "Well, we’re between a rock and a hard place." So then he threw a real curveball at me and said, "Well, I understand you can’t work with me because of my ways of doing things and your ways of doing things." And I said then, "I don’t want to ruin our relationship because I’ve always been brought up to respect my elders, but there’s been times where you’ve challenged that moral in me, and I don’t want to go there."

He said, "Well, why don’t you buy it?" And I’d never thought about buying it. It wasn’t my passion, it wasn’t my baby. But by this time, I’d actually built a good rapport with the team we had, and we’d achieved amazing things together. We’d celebrated a lot of wins together, and we were on a real roll. So again, this sense of obligation hit me, and I just couldn’t do this wrong by the people and hand them back to my father-in-law because he would’ve crucified them. So, in April 2004, over 20 years ago now, we bought the business from him, and that wasn’t without its challenges because these conversations had taken place many years prior to that. And unfortunately, there were some personal issues within the family that slowed things down. My father-in-law didn’t appreciate that when you buy… And we bought this business at arm’s length, based on valuations, bids we had from third-party buyers, and the structures, etc.

I didn’t have the funds to buy the business outright. So, there was an element of hurt money, but there was also vendor finance. Interest rates at the time were 8%. From a business funding point of view, we paid 10%, so there was 2% on top of the 8% because there were no assets to underwrite it, which I was fine with. The thing I wasn’t fine with was the rent we were paying on the core property where the abattoir was. That was essentially what my father-in-law needed to live on, and it was a considerable amount of money. He was meant to look after the upkeep and the ongoing maintenance of the site, which, to this day, up until when we bought that site, he never did. So there was still friction and tension for many years after.

Anyway, we took this business and, as I said, in the first 18 months to two years, we grew it to $4.5–5 million. Within 10 years, we had it to $15 million. And at its peak, together with my Commtrade business—which I’ll get onto—we had it at $30 million at one stage, before I split the Commtrade business from Game Farm. I started Commtrade in the midst of negotiating to buy the business, remembering I didn’t really want to buy it. I felt obliged to, but I persevered through all the challenges.

One of the reasons the business almost fell over is because my father-in-law didn’t think it was fair that the staff entitlements that had accrued, and his company cars and all this type of stuff, weren’t normalized off the purchase price. He thought that was all a gift. There were a truckload of personal loans and things like this. And in the end, we just bit the bullet. We knew we could back ourselves and the potential, so we just let him have his way, which wasn’t good because then he had his way with everything, and we’d set the precedent.

So, I set up this international trading business because one of the benefits of being in a vertically integrated agricultural business is we get to deal with agribusiness bankers. We’d been with NAB for the entire duration of my 30 years with the business. We had a great relationship with them, from credit all the way through. I always made a real effort to get to know the head of credit and bring them out to our operations. If they were head of credit in agribusiness, it was important for me that they understood agribusiness and that ours was different. I built a really good rapport with them. They were great support, and they’d introduce me to a lot of their other clients, knowing that I had this background in international export and trading. I got to meet some amazing, passionate producers, very similar to us, that were producing the best beef in Australia, whether it was Wagyu beef, grass-fed beef, or grain-fed beef.

And I’ve always had this philosophy that I want to be diversified in my product base, but I only want to deal with the best product within each category. These farmers were amazing. The work ethic was second to none. We just found common ground so easily. The fact that I was a primary producer in my own right—albeit I’d fallen into it rather than grown up in it—I understood feed costs. I understood droughts. I understood floods. I understood that there’s an entire carcass that you need to sell, not just the fillet, the striploin, or the wing of the bird, but the leg of the bird. You had to balance it out and sell everything.

So, we built great relationships, and those relationships are still going today, up to 25 years old now. Some of my oldest principals I’ve worked for, one of them was producing 10 head of cattle per month. It was chocolate-fed Wagyu in Millicent, South Australia. We now have that in 32 countries around the world, on the best menus, in the best five-, six-, and seven-star hotels in the Middle East. Amazing story. We’ve grown that business together, and we’ve duplicated that with many other brands. And again, it’s all about surrounding yourself with like-minded, hard-working, passionate people.

They were scared of exporting because of the freight costs. Would they get paid? They didn’t understand foreign currency—all these types of things. But it had been my nature because of the background I had at Craig Mostyn and Company in trading from a very young age, and I just loved it.

I do want to go back to the very beginning, Brett, because this is what got me absolutely hooked on international commodity trading. When I started at Craig Mostyn in 1987, the fax machine hadn’t even been invented. We used...

Brett Kelly:
Telex. Yeah, Telex machines.

Scott Evans:
Telex machines, right? Telex machines. And I didn’t operate the Telex machine. We used to just have one, we'd draft something verbally and give it to the PA, and she’d get on them. And you'd use these almost books that you'd go into and research. I was after Potato Flakes for Arnott’s.

Brett Kelly:
What the terms were for the Telex machine.

Scott Evans:
What the terms were for the Telex machines, and also Arnott’s were about to launch Nik Naks. And I met Mark Phelan, who was the head of procurement at Arnott’s, at the driving range at Strathfield during a lunch break. I just happened to be standing next to him hitting golf balls. I was a decent golfer back in the day, and he asked me if I’d give him a few tips. Anyway, we struck up a relationship. Little did I know how powerful he was. And we built this relationship and he wanted to buy 400 tonnes for the launch of Nik Naks and Potato Flakes. So we had to research who the worldwide producers were, before the internet, of Potato Flakes, and it was Oregon and Idaho and all these different places, but you were doing this all through books, research, and libraries, all that type of stuff.

So then we found these producers, sent it all through Telex. Anyway, while we were doing this, one of the companies came back, and it was a trading house on the 4th floor of a building in New York City, and they wanted two containers of cranberry beans. So, okay, no problems. We did our research. You won't believe this, and this is what absolutely gave me a taste that I’ve never, ever lost. I found a company on the 12th floor of the exact same building in New York City that sold cranberry beans. I bought two containers from them, sold it to the guy on the 4th floor. I’m sitting in an office in Milsons Point. I made 5,000 US dollars on this transaction, and all I had to do was get them to send the documents to me, which took a long time in those days, take the invoice off, put my invoice on, and that was international trading. I thought, "If this is how easy business is, international trading’s my go."

And so when I had the opportunity to start Commtrade, I did, and I did that as a fallback. I’m one of these guys that never has just one plan. I’ve always got to have A, B, and C. If the first plan fails… And when I could see things turning to custard with my father-in-law, especially when he backed out of the first deal when there were lawyers, accountants, paperwork this high all around the boardroom table, that was the day we were going to party, sign off on everything and move on. Properties, business, everything we were buying, and he walked out of the meeting, over his car and some staff entitlements and said, "You can shove it." So it took a little while to get back. So I just didn’t want to leave the team. I didn’t want to do the wrong thing by my mother-in-law, who was a beautiful woman.

And I set up Commtrade just as a side hustle, so I had something to fall back on if I had to walk. I should say there was a time where I stood up to my father-in-law because he wanted to do something that was completely immoral and against my ethics at all levels. And I got a phone call half an hour later from our accountants at the time, our lawyers, and our banker saying that he'd had a call from my father-in-law to say that I had been sacked and that they’re no longer to communicate with me, et cetera, et cetera. I said, "Okay, no worries." So, that's all. I’d already started…

Brett Kelly:
How do you go home and tell your wife that you’ve been sacked by her father? This is the beautiful world of family business.

Scott Evans:
Well, no one knows their father better than the daughter. So I really tried to keep a lot of this stress to myself. Because I knew exactly what he was like. As I said, my father-in-law was a hard worker. I mean, he built the foundations of what we’ve turned into a great business. Without that, it wouldn't be where it is today. Some of the things that he did back then, the relationships he built, are still rock solid today. So he’s definitely left a legacy and a testament, no doubt about it. And to this day, at 85, he still flogs himself working hard in other ventures, but that’s another story.

In this instance, I knew that he was going to come back very quickly groveling to me because, and I don’t mean to be disrespectful, but he left school at the age of 10. He couldn’t even write his own name. So back in those days, everything was paid by cheques. There weren’t EFTs and all the rest of it, and he needed someone to help him. So he called me two weeks later, asked me to see him, he apologized. He said that I was right and that he was wrong, and could I help him because he had a meeting at the accountant’s today, and we needed to go through all the returns and sign off on tax cheques and things like that. So I did, and, yeah, we moved on from there. It’s been a very interesting journey.

Brett Kelly:
So it is an amazing story. And when you think about, I guess, the early part, you took your love of golf and met a single guy, and I've known you for a long time now, you're great with people. Do you think that’s the trait that’s helped you so much in everything you've done?

Scott Evans:
I truly do, Brett, because I value relationships. I always try and give more than I get because I always prefer the sense that somebody owes me more than I owe them. Not that I make that public, it's just in me that I want to give people more than they feel that they’ve given me. So much so that that gentleman that opened my career in international trading, he actually, we got bought out and he got moved on about two and a half years in, and he went to a new company and I loved Craig Mostyn. Seriously. They were the company that not only did my parents teach me morals, ethics, and values, but this company was all about morals, values, and ethics. And I just loved every single part of it.

And where my previous boss had gone, didn’t have a good reputation, and he rang me up and he said, "Mate, I really need your help." He said, "I’m not getting the support of the team here. I want to set up a food division, which is your background. I really need you to help me." I didn’t want to leave Craig Mostyn, but I owed it to this guy because he gave me this opportunity. And he didn’t state it that way, but I just felt obligated. So I went across there. It was the best thing I ever did because it taught me all the things not to do at this other company. In the end, we both only stayed there for two and a half years, although we hit every target that was set in front of us, but it just wasn’t a company I wanted my name associated with. So I got headhunted and moved across before joining the family business.

Giving Back

Brett Kelly:
Where did that ethic of giving come from?

Scott Evans:
I don’t know, I just like to think I’m fair, Brett. We all have our weaknesses, don’t we? From a very young age, I recognized my weaknesses and knew where my strengths lay. So, every day I worked on improving my weaknesses, and I’d make the most of my strengths.

One of the best skills I’ve been gifted with is the ability to negotiate. A lot of people think negotiation is just about putting yourself in the other person’s shoes, understanding what they want, and finding common ground that benefits both parties while trying to get the upper hand. I think it’s one step further than that. People often make the mistake of putting themselves in the other person’s shoes but still thinking with their own mindset. You've got to think with their mindset, not just your own, otherwise you're wasting your time.

Golf teaches you a lot. It’s a competitive game, an individual game, and it’s 90% mental. But the relationships I’ve built through golf have opened so many doors for me. Without a doubt, relationships are key. I always try to over-deliver to people who’ve given me their time. As a 12-year-old kid, who at 40 or 50 wants to play with a 12-year-old?

I think it’s because we travelled a lot when I was younger, and my dad always entertained dignitaries and executives at home. We were raised with a lot of discipline, structure, and values, and I guess that helped me mature faster and interact with older people. They took a liking to me, and that’s worked with customers.

I’ll never forget a customer I had at Craig Mostyn. I got handed this file and they said, "Be careful with this one, mate, he’s a real firecracker. We haven’t done business with him in five years, but he’s the biggest Lebanese wholesaler and one of the biggest importers of food products into Australia." So I went to see him. I must’ve caught him on a good day because he really took a liking to me. He gave me an inquiry, and two days later, I came back with an offer, and he placed an order for 10 20-foot containers of Chinese peanuts.

I said, "Tony, why do you want to support me like this?" He said, "Mate, I just liked the way you turned up here. You didn’t chase me for business. You took your time to learn about my business, about me, about my family. I saw you like a son. And if you were my son, I’d want someone to give you a crack, so I’m giving you a crack."

I said, "Okay, beautiful." So I went back. The business was shocked that I got the order, but they said, "Be careful, he’s known for not paying his bills. We need him to pay 25% up front." So I went back to see Tony that afternoon. I said, "Look, Tony, the business is absolutely stoked with the order. But I didn’t realize that we’re supposed to get a 25% down payment." He said, "Mate, I knew that already." And then he handed me a cheque. It was from Barclays Bank, but it was post-dated two months.

I was pretty proud of myself for spotting that. I turned to him and said, "Tony, I can’t take this back." And he said, "Yeah, okay." So I took it back. We developed a really good rapport after that, and he set me on my journey with Craig Mostyn, giving me so many opportunities and so much support.

When I told him years later that I was joining the family business, he asked me what the business name was. I told him it was Game Farm. He asked where we operated out of. At that stage, we were only at one site in Galston – we’re now across five. He said, "Okay, no worries. Best of luck, mate, but I’m sorry that we won’t be doing business anymore." I said, "Tony, never say never. There’ll be opportunities down the track."

Anyway, I walked into my first day at Game Farm, halfway through the day, and while I was meeting the team and going through some documents, someone mentioned, "Does anyone know Tony Isaac from Harkola?" And I said, "Yeah, I do." They said, "He’s just placed a $10,000 order for Game Farm products." I was like, "You’ve got to be kidding me!" So I rang him up and said, "Tony, what are you doing?" He said, "Mate, it’s the Lebanese way. You’ve got to impress your in-laws, so I’ve placed an order. That’s my way of saying thanks for all the help you’ve given me." I said, "But Tony, what are you going to do with all this stuff?" He said, "I don’t know, mate. I’ll put it in the chiller. If my customers don’t buy it, I’ll put it in the freezer. If they still don’t want it, I’ll eat it myself."

So, again, it’s all about the strength of relationships and the support you have. Unfortunately, Tony’s no longer with us, but he taught me so much. When people believe in you, it gives you the strength to dig deeper, especially during tough times. That kind of support and positive thinking has become part of my DNA, and it's been a massive contributor to my journey – being fair with people and maintaining strong relationships.

Family Business

Brett Kelly:
Now, you’re in a family business. Linda’s your amazing wife and mother to your great kids. How have you both managed that relationship through the ups and downs of an intense business that you’ve grown together?

Scott Evans:
Looking back on everything, I’ve only really learnt this since my kids have had their own kids, and I see the way Linda interacts with our grandkids. Linda doesn’t work in the business anymore. She hasn’t for five years, although she does help with some bookwork for my Commtrade business. But she never had the chance to be a full-time mum, because we were building the business together.

I remember when we had our second child, Ashley, and about an hour and a half after giving birth, Linda was doing the payroll on her stomach in hospital. That was just the work ethic we had. We did what we had to do, and we built the business together. There’s no way I could’ve done it without her and the team we had around us. I was just setting the direction, getting the best out of the team, and showing them the vision. It was truly a team effort.

Reflecting on it now, that’s one of my biggest regrets – that Linda didn’t get the chance to be the mum she deserved to be. But thankfully, she’s a very young grandmother now, and she spends her time looking after the grandkids, which is awesome. Our adult children also work in the business.

Daniel’s our eldest. He’s 35 this year, and he heads up sales and marketing. He spent seven years at Woolworths before joining the family business, which was mandatory. We didn’t want them to join straight out of uni. They had to be the best person for the job, and the job had to be available. More importantly, we wanted them to come through the ranks and earn the respect and trust not just from Linda and me, but from the team as well. We didn’t want our executive team to think that the kids were being fast-tracked through the business.

Daniel did incredibly well at Woolworths. He was promoted almost every year, from social media to marketing, then eventually a buyer. He was there for seven years. I didn’t push him into the family business; I wanted him to pursue his own passions. But he pulled me aside one time while we were on a family holiday and said, "Dad, I’ve been here for seven years, you said five. When are you going to give me a shot?" I said, "To be honest, Daniel, I thought you were doing so well there, building your own identity. I didn’t want to take that away from you. And I figured if you were still interested, you’d come to me."

He said, "No, no, I really want to come into the business, but I’ve been trying to be respectful." So we planned his exit from Woolworths, and he joined the business. The challenge I had was that Daniel wanted to come into the business with a focus on logistics and operations management. But as parents, we know our kids better than anyone else. I told him, "Dan, don’t take this the wrong way, but you’re not an operations guy. You’re a relationships guy. You have this incredible gift for connecting with people – whether it’s a 90-year-old or a two-year-old. That’s a gift, and you need to leverage that."

I said, "The biggest challenge we have in the business today is that I don’t want to be the face of our business. I don’t want to be at the forefront of it. I prefer to be setting the direction, the strategy, and driving the vision through the business, but I don’t have the patience." This might sound a bit silly, and I hope there aren't any customers in the room, but I just don’t have the patience to deal with customers, especially in a fully vertically integrated business like ours, which runs 365 days a year, 24/7. There’s no off switch.

So I said, "I really would love you to leverage your relationship skills and become the face of our business because every 10 years, our salespeople, who have been so successful for us, get poached by bigger companies, and we can’t afford to keep them. And it never works. You offer more money, they stay once, but then they get poached again and they leave. You’re just setting a precedent. So I don’t believe in that, and I’d love for family to take on that role."

I said, "Think about this. You go into any customer—whether it’s an airline, a hotel, a shipping company, a chain of restaurants, or even a place like Tetsuya’s restaurant. You walk in there as the grandson of the founder—that melts people’s hearts straight away. Then, with your knowledge, your passion, and the fact that you've been involved in this business almost since the day you were born, certainly since you could walk, because you were here before preschool, you’ve worked here during school, and during uni holidays, mate, it’s a shoe-in."

And I said, "Anthony Puharich from Vic’s Meats was the benchmark in our industry. I want you to be the next Anthony Puharich, but better." And reluctantly, he took on the challenge. The reason he didn’t want to take it on is because he doesn’t like conflict, and chefs can be very challenging people to deal with. Anyway, six or seven years on, he’s absolutely blossomed, and he is now the face of our business. He’s earned a huge amount of respect.

We’re in every major establishment. That’s everyone's dream. So much so that now, understanding that our Game Farm business specializes in game birds, game meats, and specialty poultry, we’ve got some of the most famous beef and lamb brands in the country coming to us, wanting us to distribute their products, because we’re not in those products. They don’t want to deal with meat wholesalers who carry 2,000 SKUs and many different brands. They’ve surveyed restaurateurs and chefs, and asked, "We don’t want to deal with the meat wholesaler, but we want our brands in the market. Who should we deal with?" And nine times out of ten, our name comes up.

So we’re now building our business on the back of our brand reputation. We’re hitting 50 years next year, so I think we’ve more than proven ourselves. We’ve been around long enough now, and we’re getting brands that complement what we do. And when you’re selling beef, our average invoice value for our core products might have been $200. Bring beef into the mix, and it jumps to $1,500 easily, even with the smallest restaurants. So Daniel’s done an amazing job.

My daughter Ashley had no interest in coming into the family business. She wanted her own identity. She didn’t want to be known as someone who succeeded just because her grandfather laid the foundations, and her mum and dad worked hard. She didn’t want to walk in and have it be a piece of cake. She wasn’t having any of that.

Ashley is very different to Daniel. She’s very savvy, and while she can be quite direct, there’s a soft side to her as well. She’s got a great business mind. A bit like me, she doesn’t have the patience for the small talk with customers. So Daniel and Ashley complement each other really well.

Ashley had this vision. She did a Bachelor of Business, then followed that up with a second degree in psychology. She’s always had a passion for HR, people, and culture. So she had this vision of setting up a consultancy business for family businesses that couldn’t afford to have their own people and culture or HR team, and she’d go in and advise them.

I said, "Ash, I think that’s a great idea because there’s a real opportunity in that space, and HR is so important. It’s getting more and more important. So I fully support your idea. But how are you going to pitch yourself to a family business when you’ve never worked in one? Why don’t you come and experience our family business? Our family business is different to so many others."

Brett Kelly:
And Scotty, just share with the guys the size of the workforce, but the difference in terms of the people you’ve got—because you've got salespeople, execs, lots of people processing birds—just for people to understand.

Scott Evans:
Yeah, that’s our biggest challenge, actually, because our workforce covers everything from A to Z. We could have our own Olympic Games with the diversity in our business. We’ve got almost every nationality covered. We’ve got almost every culture and religion covered. From highly educated people to those who can’t speak English and have never been to school, and everything in between. And today, that’s across five sites. So, it’s even harder. Try breaking down that ‘us-versus-them’ mentality. Try educating people from different languages and cultures. How they interpret things has been a real challenge.

That’s why I was so keen to get Ashley involved, because this was a real passion for her—bringing people and cultures together. We have bilingual signs throughout our entire operation for safety reasons, and we make sure that every aspect of communication is bilingual so we’ve got everyone covered.

We even have translators when we hold meetings. We go to great lengths. Every Christmas party we have celebrates a different culture, with different cuisine, to embrace their heritage. We have an international day where everyone brings in their favorite dish from home, from their culture, and they’re so proud to present their homeland food to you and share it. It’s fantastic.

We’ve done all these things to try and embrace the different cultures, because it’s not easy. And with our locations, we were only operating at the Galston site when I first came in. Now, for those who don’t know, Galston is in north-western Sydney, on the fringe of the metropolitan area. It’s a bit out of the way for couriers who don’t like coming there. The closest public transport is probably two and a half k’s away. And try employing younger people these days—they want trendy cafes, access to Instagram-worthy restaurants, and they want their coffee spots to be close. Galston’s just not that place. It’s a beautiful area, with amazing properties, and even our property is gorgeous. But it was difficult.

So now our head office is in Strathfield, right in the heart of Sydney metro. We get a much better caliber of person now, which is great.

Anyway, getting back to Ashley. I convinced her to come into the family business. She quickly went through all the business units, saw the challenges, but Ashley’s very much like me—she saw them as opportunities rather than obstacles. She got so involved and passionate about helping people, and she saw an opportunity from an operations point of view. She came to me and said, 'Look, Dad, I want to be given the opportunity to run our processing facility at Galston.' I said, 'Are you sure, Ashley? It’s an abattoir.'

Brett Kelly:
It’s a messy job.

Scott Evans:
It’s not the cleanest of jobs. But she said, 'No, no, I’m good with that. I can deal with it.' Then she said, 'It’s a great way for me to earn the respect and trust of everyone. If I can do this, it doesn’t matter who you are.' And I loved that, because that’s what I did in my first six weeks. There’s not a single job in this business that I haven’t done, whether it’s shoveling manure, putting live birds on a processing line—whatever it is, I’ve done it for two reasons.

One, I wanted to earn their respect and trust, to build a rapport with them. And two, so that nobody could ever pull the wool over my eyes about how things work in our business. I may not have been an expert at every role, but I’ve been through every single process. So Ashley really got involved and went from not being involved at all to becoming the first person she consulted for, to now being a full-time employee. She’s now the general manager of our operations. She still has a passion for going out on her own one day, but I got her involved in a family business forum group, which I’ve been part of for 24 years.

It’s a group of 12 CEOs from family businesses, from fifth-generation to founding business owners. It’s been such a great support network for me. And I encouraged Ashley and Daniel to get involved in these groups as well. I was very strategic about the groups I suggested they join—they were businesses that could really give them confidence and support, and help them understand where their dad was coming from at times.

For any of you with family in your business—whether you’re second generation and your parents are still involved, or if you’re the one running the show and your kids are coming through—it’s an interesting dynamic. I’ve been through both: first buying the business from the founding generation, and now, dealing with the third generation who are heavily involved. I’m at a stage where I want to step aside, so we’re going through the process of how that transition is going to look.

I also have the privilege of sitting on a number of family business boards because of that succession experience.

And albeit in my early fifties, I've seen a lot in the 30 years that I've been involved in Game Farm as a family business, but also in the 23 years that I've been involved with Family Business Australia as an organization. I've heard the war stories. I've heard the success stories. And the absolute benefit is that you're not alone. It doesn’t matter how big your problems are. I can guarantee you, you can walk into a room, and your problems will feel insignificant when you hear others’ stories. And that’s another thing I learned—never stress over a situation you've got. Just go to your advisors and seek advice. Don’t feel alone. Go to other business owners you know.

Honestly, every challenge that’s ever been put to our forum group, and we meet monthly and have done for that period of time, there are at least two or three people out of the 12 in that room who’ve been there and done that—two, three times over. And you learn from their hindsight. We all know in life that the best way to learn is by making our own mistakes. And I'm a firm believer in that. You've got to let people make mistakes, as long as they don’t make the same mistake twice. That’s what we lived and breathed.

So yeah, both kids are in the business. We're working through a succession process at the moment. We haven't quite formulated how that will look, because our industry is quite challenged at the moment. We’re at the top end of town. Any foodies in the room? Anyone who loves eating out? A lot of the top-end restaurants are struggling. Landlords are being unreasonable with their rent reviews, the cost of business has gone through the roof, and the profits just aren’t there anymore. Even the best restaurateurs work on low single-digit returns. And you only need the slightest bit of disruption in the marketplace, and it’s pretty challenging.

So it’s been a tough five years, Brett. I mean, COVID was a real hit to us. You never would’ve thought the world would shut down the way it did. We lost 80% of our business overnight. We were booming. Business was going gangbusters. We’d just embarked on the biggest capital expenditure in the history of the business—$7 million to build new hatcheries, breeding operations, and growing farms. We were about 20% into it when COVID hit. As I said, we lost 80% of our business.

I always prided ourselves on how diversified our customer base was. We had restaurants, hotels, pubs, clubs, airlines, shipping companies, Coles, Woolworths, David Jones, Harris Farm, export, import, caterers—everything. Every single customer you could think of. And I never allowed retail to make up more than 10% of our business. Because you just need a change of buyer, and if they don’t like your products, they’ll just kick you out.

So when we lost 80% of our business, Coles were 10%, Woolworths were 10%. Well, they were probably about 16% combined. The other 4% was Harris Farm, the independents, IGA, and so on. They were the only customers we had left. We had 100 tonnes a week of livestock coming at us for 16 weeks, because that’s how long it takes to turn the tap off. We had very little income and full operational costs. It was the biggest challenge I’ve ever faced in business.

And it was the first time in my life that the negative gremlins that never existed in my head became stronger than the positive ones I’ve always prided myself on. At three o'clock in the morning, I’d find myself awake thinking, “How the hell am I going to navigate the 130 employees and their families through this disaster?” So I didn’t sit there and toss and turn and think. I got up and I just stamped the pavement. I only live five minutes down the road, and I was walking 20 k’s a day, seven days a week—some days 30 k’s. It was just the energy, the fitness, the breath of fresh air, and the time to think.

The Saturdays I had with you, Brett. I mean, Brett would ring me every Saturday during COVID and brainstorm with me, “Where have you been? What have you done? What about this? What about that? How are we going to do here? How are we going to do that?” And it was awesome. To have that support was instrumental. Some mates of mine whose businesses were booming during COVID were a bit embarrassed, but at the same time, they were there to support me. And you realize who’s really in your corner. That inspires you and motivates you. And we did everything in our power.

I believe cash is king. So, I told our guys to go out there and just get rid of stock—80% of its value, get rid of it. Woolworths basically turned around and said, “Give us your best offer. We’ll see what we can do.” Coles said, “Let’s sit down and talk about this.” The next day, Coles came back and said, “We want to buy $100,000 of your product, and we’re donating it to OzHarvest. There’s a lot of people doing it tough.”

And they filmed the whole process—packing the order, loading the truck, and delivering it to OzHarvest. The most embarrassing part of all this? They made it out as if Game Farm donated the product when we didn’t. Coles paid full price for that product and donated it to OzHarvest.

That afternoon, the COO of Coles went on the 6:12 primetime Channel Nine news, interviewed in one of their stores. And he finished the five-minute interview by saying, “We’re all locked at home, wondering where life’s headed. But can I encourage you to come out to your local Coles supermarket? Challenge yourself. We stock Game Farm quail, Game Farm spatchcock, Game Farm duck, Game Farm corn-fed chicken. Come and buy some of these products, maybe products you haven’t tried before. Go onto the Game Farm website, check out the recipes, and try something new.”

Beyond me. I hated retailers because they used to bully us. Woolworths continued to do so, but Coles were just unbelievable.

So, very quickly our retail business became 50% of our business. We lost 50%, instead of 80% of it. But because none of us had been through a pandemic before, and we had no idea where the government was going, and we certainly didn’t expect the government to come with the level of handouts they did, we went out there and liquidated our stock and turned it into cash.

The other foresight I had was that we weren’t the only primary producer with this problem. Australia was going to run out of freezer space. It’s one thing processing a product you don’t have a sale for, but it’s another thing processing it and putting it in the bin. And that was the alternative if you couldn’t sell it—because there wasn’t any space.

So, we liquidated most of our stock and turned it into cash, albeit at a 20% gross margin loss. Then they came out with JobKeeper. Well, I think you had to be 70% down or whatever it was. Well, we weren’t, because we’d sold all this stock, and it was based on sales, not profit. So, we missed that first round of JobKeeper, which made it even tougher.

Brett Kelly:
Which was completely unexpected—that the government would ever come out in the way that they did?

Scott Evans:
Yeah, and none of us can run our businesses on the expectation that the government will save us, because nine times out of ten, 99.9% of the time, they don’t. So, you’ve just got to run it as if no one’s there to help you, and do what you’ve got to do. No use having stock if you need cash.

So, I presented this to my forum group. And I’ve got a very close mate, who owns Stowe Electrical, and they employ two and a half thousand people. They’re electrical contractors. He said to me, “Mate, I know you’re the last person to accept help, but we’re about to be shut down for two weeks. Up until now, we haven’t been shut down, but we’ve been told that’s what’s happening, and my guys are going to do it tough. Any chance you can do me a favor and put together care packs?”

I said, “Explain to me what you mean by a care pack?” He said, “Mate, some spatchcock, some duck. If you could get us some beef, and some sausages. Just put together a pack to the value of a couple of hundred dollars. And if you know somebody in your industry—like a providore—that can do the vegies and fruit, align yourselves with them. We want to spend $300 per employee, and we want to send a care box out on the Monday, the first day they’re at home.”

And I looked at him and said, “Mate, are you serious?” He said, “Mate, I’m dead serious, and don’t think about this as me helping you. You’re actually helping me, and in turn, I’m helping you.”

And I’m thinking to myself, “I’ve got drivers sitting idle. I’ve got pickers and packers cleaning the freezers and cool rooms, reorganizing what they’ve already reorganized. This is a great opportunity.”

So, I went back to the team, got them all together, and said, “I understand everybody’s nervous and concerned. This isn’t one of those discussions. We’re going to work through this together. This is the opportunity that’s been given to us. And from 2:00 this afternoon, we’re going to start packing orders.”

I spent the next week on the production floor with them, rallying them. We had the music going. We set up a production line, and every 10 minutes we found a better way to do it. It was awesome. We smashed out all those orders and delivered them. We only serviced New South Wales and the ACT, and then we distributed some to a distributor in Victoria.

I then said to Chris, “Mate, how about not just doing this? How about we run a competition?” So, we want you to not only receive this produce, but cook it and share what you've cooked online with the community.

And it was the greatest thing we ever did, because we went from only having 50% of our business, after having only 20% of our business when the retailers kicked in, to having Stowe Electrical with that many employees posting all over the internet what they were doing. Not only did they have this sense of pride in sharing their family meals, and their kids were involved in the cooking because everybody was at home—it was teamwork. So, it was the videos of the process: them opening the raw meat, the process of preparing it, the process of cooking it, and then the family sitting down and enjoying it. And these videos, mate, it went viral.

Our phones ran off the hook from businesses wanting to do the same thing for their staff. Kelly Partners, again, it was great support, Brett and I.

Brett Kelly:
Yeah, we sent them out to everyone, and the feedback we got from our people was amazing, because we wouldn't have thought of it, and none of our people would've thought that we would've thought of it, and they would've been right, because we wouldn't have thought of it.

Scott Evans:
And it was amazing. So, you can imagine all these people sitting at home, worrying about where their next paycheck was going to come from.

Were they going to get their job back? And suddenly, we found a way to keep them embraced. And these boxes that we sent were enough for a family of four, for two main meals a day, for seven days. So, they had seven days of just cooking and collaborating as a team.

Brett Kelly:
And Scotty, we sent them to everyone. So, there were many people who were either living by themselves, who were lonely, or just a couple. And they said to me, "The food lasted weeks", which was amazing.

Scott Evans:
Yeah, so it was amazing, and suddenly we were back in business. And not only were we back in business, doing right by our staff and by our brand, but we were helping out so many other businesses help out their staff that were concerned about where things were going.

The other thing that we did—a young Nepalese sales guy came to me. He used to call me Boss, I used to hate it. It didn't matter how many times I told him my name was Scott. He said, “Boss, I need your help.” And I said, “What can I do for you?”

And he said, “All these chefs, they've lost their jobs instantly. They've got no direction. They haven't even been paid the money they were owed. They've just been stood down indefinitely.” And he said, “Mate, you know what chefs are like, they live from week to week?” And he said, “What can we do to help them?” And I said, “Well, give me an idea.”

And this was before the care boxes started with Stowe. He said, “Can we put together a box? We've got all this stock coming at us. I know it costs. It’s not a false economy, it costs, but can we put together a care pack for these chefs?” And I said, “Mate, that’s a great idea.”

Hand on my heart, never in a million years did we do it because we wanted to have the upper hand and make them feel like they owed us something. We did it because these people have supported us through thick and thin, and we wanted to support them through one of the toughest times.

Not to mention, as naive as this may sound, I didn’t know what I was going to do with this stock. So, if I had to write off stock, I’d rather write it off in the right direction, and put it down as a marketing investment.

So, we sent out, I’d say, 700 customers, these care boxes. Same thing, two meals a day, seven days a week for families of four. The interaction, the collaboration that we got was unbelievable.

When COVID hit, we had, because of the 16 weeks of 100 tonnes a week, we'd only sold what we already had in freezers and cool rooms before that happened. So, we had the biggest stock levels we’d ever had in the history of the company.

And chefs usually wouldn't buy frozen product, especially the high-end chefs that we deal with. These chefs came back, and if we could have sold them tables and chairs, crockery and cutlery, they would've bought it. And they cleared all of our dead stock at full price within six months. So, doing good by doing good comes back ten times over.

So, getting back to the story with Stowe, this is another area that we had a challenge. Every other electrical contractor in Australia wanted to do what Stowe was doing, and I wouldn't allow it to happen. As much as we needed the business, and I wanted it to happen, there was no way I was going to encroach on this brilliant idea that Stowe had come up with, and make it an industry-wide thing. I wanted this exclusive to Stowe, so they could own it.

Even though Chris rang me up, and he said, “Mate, you're nuts. What are you doing?” I said, “Mate, I know you didn’t ask me to do this, but to me, this is the right thing to do. You've stuck your neck out. You've invested this money.”

You should have seen it. We took a picture of it. There were 28 pallets, 1.8 meters high, straight down our production line. The most amazing picture we’ve ever taken. And that was the day we were loading out all the Stowe deliveries.

So, you can imagine the uplift that that gave our entire team, and our business. And then what we did with the chefs, and then Kelly Partners.

And so then we just started targeting other industries. So, anyone that called us from a non-competing, non-conflicting industry, we just embraced it, and we moved on, and worked our way through it.

So, it was, you live and learn, and even in the deepest, darkest moments, you think, “How am I going to dig myself out of this?” And if you dig deep enough, and you just believe in yourself, and surround yourself with good people and great advisors.

I mean, and I’m sure most of you in the room who were in business or clients of Kelly Partners during COVID, the processes that you sent out so quickly—“How you can assess your business, how you can look at different aspects.” We didn’t have to recreate the wheel. Every day, we were getting templates we just had to populate.

Brett Kelly:
And it was amazing to see in our business, our teams getting together, working together for the clients. And it was one of the best things I’ve seen in the history of operating our business, was how our people just thought about the client and got together.

And we ran a group every day, because every day they were putting out new things. So, we were meeting in the morning, meeting in the afternoon, working on processes, getting them out to the clients.

The amount of clients we got from clients who were like, “Oh, my mate’s in the same position, but hasn’t heard from his accountant.” We got hundreds. At one point, I counted over 400 additional companies in about six weeks, because their accountants didn’t send them anything, or couldn’t explain it, or wouldn’t explain it, or wouldn’t take their call on a Saturday, or wouldn’t call them at night.

So, it’s interesting how very difficult times can show you so much about yourself, about your team, about your business, and about your clients.

I really want to thank Scott for his time today. The group that we’re pulling together here, I wanted you to meet Scott. He’s a really tremendous person, and great in business, as I think you can all tell.

We’ve got an opportunity to ask some questions. We’ve got the Slido set up. There are some there, which is great. And as we build out this community, I really want you to have access to people like Scott, who I know can add so much value for you.

Relationship Building

Brett Kelly:
So, what are the rewards from the job for you, other than the money, that you really see in the business? You've mentioned relationships.

I think Scott's one of the best people I've ever met at establishing and building and investing in relationships. I think you've shared a fair bit about that. I see now the kids coming through. I think it's incredibly rewarding. I've seen so much. How do you think about it?

Scott Evans:
I mean, this is going to sound like a cliché, but I’ve never in my entire life chased money. And I truly believe that anyone who chases money will never succeed to their absolute full potential.

I’ve always embraced what I do and given it 120%. And one of my weaknesses is, I burn people out because I've got such high expectations of myself. My expectations on others are unreasonable. So, I’ve got to be very mindful of that. I don’t expect them to operate like me, but I do expect them to operate at 100%, when really 80% is probably fair.

I’ve just always followed my passion, given it my best, and the money comes. Anyone I’ve spoken to who has failed in business has failed more often than not because of their desire to chase money. So, I don’t.

The money is the by-product. This is the cliché bit that some people can roll their eyes at – the money is the by-product of doing what you love. And if you give it all you’ve got, your focus, your attention, you surround yourself with the right people, the money comes.

So, what do I get out of it other than money? I love being able to see people develop. We’ve got people in our business who started off as drivers. They’re now operational managers. As a driver, they were earning 60 grand. Now they’re earning 200. Seeing them grow.

The deals that you do. I mean, one of the deals that I haven’t spoken about is when we ventured into export, I met this Singaporean lady who was running a business in Singapore, an import distribution business. I met her at a trade show in Singapore, and she said, "Look, we’d love to represent your brands. What can we do together?"

So, I went and visited her facility. Everything looked great. Gave them an opportunity. Two years later, business was going really well. She introduced me to a mum and a sister who owned a business in Hong Kong. Business continued to grow. They started sending me inquiries.

This is where Commtrade was born, because not only was I selling them game farm products, that’s where it started, then they wanted me to, because they built trust in me and understood my ethics and values, they then wanted the best of the best that Australia offered. That’s when I started reaching out to all these contacts I had, and building this Commtrade business.

And then they came to me two years later again, and said, "Look, we see a great opportunity to open up a business in the Middle East. We’d love you to be our partner, because you bring so much to the table from a procurement point of view, and the relationships you have and your understanding of primary production."

And this was back in 2002. So, Dubai was very undeveloped at that stage. We went to the Middle East. We did 12 months of due diligence. Cut a long story short, 15 years later, we had an amazing business. I was a third partner in that business. They were my biggest customer. Singapore was my second. Hong Kong was my third.

So, not only was I a shareholder, but I was dealing with two very, very driven female businesspeople. It just gave me a great insight into how women think. And quite often or not, it’s different to men, but it’s so important and critical what they bring to the table.

And we built this amazing business in the Middle East, albeit we went through challenges. We put general managers in jail for corruption, and so many different things. But in the end, we sold out to a public listed company in Thailand for multiples that I’ve never seen or heard of. And it was another amazing experience, again, through relationships, and the rest of it.

So, just the relationships you build, the friendships you make, the journeys that you go on, and the sheer sense of achievement.

One thing I do every night before I close my eyes is I think about my day and what I’ve achieved, what I could have done better, but what I should be proud of. And it’s part of my discipline every day.

Other than the number one rule, and people laugh at me when I tell them this one, the number one rule I have for myself and anybody that asks me for advice, is the most important thing you can do every day is when you get out of bed, you make your bed and you make it with pride. It gives you a sense of purpose, and a sense of achievement from the very minute you start your day. And that’s something I’ve done every day of my life.

Succession Planning

Brett Kelly:
That’s a great call. Now, a couple of great questions here. "Best things you’ve learned from your father-in-law." And another one, similarly related, "Best time to implement or document a succession plan."

Scott Evans:
Best things I’ve learned from my father-in-law. In some ways, and I say this with all due respect, how not to do things. In other ways, he’s an amazing entrepreneur. Honestly, he would bamboozle me with a hundred ideas a week. Ninety-nine of them were completely out there, but one of them was brilliant. So, the ability to think 360 with no blinkers, and really open your mind.

And he was a dreamer. He was an absolute dreamer. But if you focus enough, and you surround yourself with the right people, you can believe it. And if you believe it, you can achieve it. And so, yeah, he’s really taught me that.

Brett Kelly:
How many birds are processed today?

Scott Evans:
Currently, production’s down because of the general state of the economy and the shift that we’ve had in business. But at our peak, we were processing 150,000 birds a week.

Brett Kelly:
And when you first got into the business?

Scott Evans:
10,000. But back then it was 10,000 quail. So, then you start adding spatchcock, corn-fed chicken, and bigger birds. The actual kilos that we were putting through was significantly different as well.

Brett Kelly:
Guys, to see the operation is really a wonder of the world. It’s amazing. And succession plan, in terms of thinking through it, writing it down, working through it, what’s your view of the best time to think about that?

Scott Evans:
The sooner, the better, because I’ve learned from the mistakes of other family businesses. I’ve got, again, a very, very good friend of mine in one of Australia’s iconic brands. His father passed away last year at 92, and that was their succession. It was the estate in the will. And my mate’s in his late fifties. He’s still got plenty of mojo in him, but his prime is behind him.

So, I’m 54, and we started thinking about it a couple of years ago. We’ve started. We used to, obviously, like most of us in the room, if you get good advice, when we used to pay out the dividends and distribute them through the beneficiaries of the trust, we used to use the kids to assist in minimizing our tax. And we’d run spreadsheets on what we’d given the kids, and we’d offset that against their school fees or whatever. So, it was all structured, a hundred percent legit. But from two years ago, we actually started, we continued to do that, but they get the money now.

And the aim of us doing that is... And we’re not talking about $10,000 or $20,000, we’re talking about reasonably sized lump sums of money. We started small and worked our way up. Linda and I want to see how they handle it and how they spend it. Do they just go on holidays, buy a new car, or put it towards investing and paying off mortgages? We’ve helped our kids, I’m not going to lie, in the sense that we were the bank of mum and dad until they got on their feet, but that was only because we could see where property prices were heading. If we’d waited until they could afford it, they wouldn’t have been able to. So we jumped in and bought them their homes.

And without us asking, when they got to a stage where they were married and both of them had stable jobs, they went out, saw mortgage brokers, got mortgages, and paid us back—minus the portion we said was a gift. They have mortgages now. I’m a firm believer, even though it’s not necessary for them to have mortgages since we could have helped them outright, what’s that teaching them?

So there’s a constant succession happening all the way along—training them, managing them. Most of us went through it. I remember the first property I bought... I got a company car at 18. So, with what I saved to buy my first car, my dad made me buy an apartment in Parmelia. The interest rates were 15.5%. My dad convinced me to lock it in for five years. I didn’t know any better. My dad was very risk-averse. He said, “It could go to 18%. Let’s lock it in at 15.5% so you know exactly what you’re in for.” Well, by the time that five-year fixed loan finished, the rate had dropped to 7.5%. I ended up selling the unit and investing in Telstra One shares instead. I made more money in a month from those shares than I did in five years with that apartment! But anyway, that’s another story. It taught me that you need to teach your kids from a young age how to manage money and responsibility.

If they inherit the business after you’re gone without going through a journey of managing money, dealing with reasonable sums, and taking responsibility—saying no to certain things because they simply can’t afford them—you’re not being a good parent, in my opinion. So, we’ve taken them on that journey, and so far, it’s been working really well. Paul’s been great, spending time with them. They don’t come to me for advice anymore because I just tell them, “Well, you’ve often told me, ‘Dad, you don’t understand,’ or ‘Dad, how would you know?’ So, okay, fine. Go and speak to Paul.”

Brett Kelly:
Just for everyone to hear, a lot of what we’re doing as partners these days, I’ve got a number of large family groups where I did a catch-up a few weeks ago where the mum and dad are in their early 70s now. They made time. We got on Teams. They said, “Brett, you need to tell our son A, B, C, and D. What do you think about that?” I said, “I agree.” “They’re not listening to us, so can you make that call?” I had a meeting with the son to say, “It’s probably not great for your parents to give you a $10 million block of land because they’ll have to do the same for the other three kids, and they don’t want to do that.” That’s something we’re doing a lot of now, and it really helps change the voice. Same message, but it has more impact.

Scott Evans:
It’s so powerful. You learn so much about your kids, and you give them that level of independence. You give them that trust and respect. Not only that, but because we’re sharing the profits of the company, they can see the cash flows, the taxes— they actually feel like shareholders because they’re getting a distribution. So, before real succession—obviously, there’s management succession, then ownership succession—but that buys you more time while you take them on this journey. To me, succession should start as early as you can make it. Because I also want to be around to mentor and guide them. I had one foot and one arm out of the business before COVID. Then COVID hit, and I had to jump back in because my kids hadn’t been through that yet, and the executive team hadn’t either. Another thing I did with the kids, and I learned this from Brett, was when they came on board, I paid them about 60% of the market rate. Now, that’s because I wanted my executive team to see how hard they worked, the skills they brought to the business, and how poorly they were paid. Linda and I were topping them up personally, but my executive team didn’t know that, right? It was a great way for years for my executive team to have the utmost respect for them.

It got to a point where my CFO came to me and said, “Scott, I love working with you, you’re so fair, you’re so reasonable, but the way you treat your family... how can they survive?” I said, “Well, Beata, you make the call. You’re the CFO. Do you really think I want to be the one setting my kids' salaries? You deal with it. Whatever you think is fair. You don’t need to ask me for permission. You do what you think is right.” So, I empowered her. She went out, did all the research, and came back to me. She said, “Scott, I’ve done the research, here’s what they’re earning now. It’s like a third of what they should be getting.”

I said, “Well, why don’t we start with double?” And we worked it out from there. It worked a treat.

Now, honestly, I’m no magician. I’m not the smartest guy in the room, but I’ve surrounded myself with people much smarter than I am—great advisors, great people in family business networks, the forum group I’m part of with amazing facilitators. I’ve met some of the most successful business people in Australia and around the globe. I’ve always made an effort to introduce myself, grab five minutes of their time, which often turns into an hour, and then catch up for a coffee a couple of days later. I’ve learned from the best. Everything I’m sharing today is mostly from those key learnings. I’ll never forget the first time I met Brett. He really challenged me.

We’ve got a mutual friend, Mark Halford, who said to me, “Mate, I want to introduce you to someone.” He’d met Brett at a Liberal function and thought we’d get on. We met down at Bella Vista at this Italian restaurant. Brett said to me, “Tell me your biggest problems.” So I told him, and he immediately had solutions. I said, “Brett, you don’t get it.” He responded, “No, Scott, you don’t get it. Stop putting barriers in front of yourself. Stop doing this. Stop doing that.” I walked away thinking, “I love meeting you, Brett. This has been fantastic. I really respect people who challenge me more than those who just tell me what I want to hear, because that’s how I become a better person.”

But I said to him, “I wouldn’t be where I am today if it wasn’t for the accountant I’m working with. I owe him so much for the journey he’s taken me on. But if there’s ever an opportunity, you’ll be the first person I call.” Three years later, my accountant decided to semi-retire. I said, “Mate, I’m not happy with that. Who am I going to deal with now?” He said, “Oh, you’ll deal with Bart.” I said, “Mate, with all due respect, I don’t want to deal with him. I want to deal with you.” He said, “Scott, my time’s come.” I said, “Okay, I respect that, but after 20 years, I need to move on.” So, the next call I made was to Brett.

And the reason I made that call was because of exactly what I’ve just explained. How many advisors would you find who are willing to challenge you so much that you’re almost ready to tell them to take a hike? What that showed me was that Brett wasn’t after my business just for the money. He genuinely wanted to make me better off. And as a result, we are.

Brett Kelly:
I appreciate that, Scotty. I really want to thank Scott for his time today. I encourage everyone to try and catch up with him during the break. I appreciate Scott's kind words. What I love to do is work with really sharp people who are passionate about what they do and bring out the best in their advisors. I always say you tend to get the accountant you deserve. And look, it makes our lives a lot better, and business is just one part of that. So, I really appreciate it, guys. Let’s have a break. Thank you, Scotty. Thank you, thank you.

Cancer Battle & Raising Awareness

Scott Evans:
Sorry, Brett. Just before we go, and I know we’ve probably gone over time, but I was actually meant to talk about health rather than business today, right? So, I do have something I want to leave with you all because it’s an absolute commitment I made to myself. Eighteen months ago, completely out of the blue, with zero symptoms, I was diagnosed with cancer, and it absolutely shocked me. The first thing that came to my mind was, "Oh shit, this isn’t good." But my positive mindset kicked in. I thought, thank God it’s me and not my wife, my kids, or my grandkids. And then I thought, how can I turn this around and make something good of it? So, I decided to be an ambassador for men’s health cancer, prostate cancer in particular, and it was well beyond my years to be diagnosed with such a cancer.

It was the diagnosis process I want to share with all the men in the room. I had no symptoms. I just had my annual blood PSA test, and it had gone from 0.5 to 1.3. They don’t care unless it’s four. My GP had been my doctor for 35 years, and he said to me, "Scott, this is a little bit of a concern, but it’s well below the average. There’s no way it’s cancer, but we need to keep an eye on this velocity of change." My business mindset kicked straight in. I said, "Mate, it’s almost tripled in 11 months. We need to dig deeper." He said, "Mate, I think you’re overreacting, but I’ll introduce you to a urologist." Thankfully, a very good mate of mine lives next door to the best professor of urology at St. Vincent’s Hospital. He got me in. We all know it takes at least eight weeks to get into these guys, but I was in there at 9 am the next morning.

He looked at me and said, "Mate, you’ve got nothing to worry about. I’m telling you, 30 years of doing this, it’s not cancer." And I said, "Well mate, what would you do if you thought it was?" He said, "I’d do an MRI." "I want to do an MRI." He said, "Mate, you’re wasting your time." I said, "Doctor, I want to do an MRI." So we did the MRI, and they found a lesion. He said, "Mate, I’m telling you, even though they found that lesion, it’s not cancerous. It’s impossible. It can’t be." He said, "Even if it was, prostate cancer is a slow-growing cancer and we’ll have time."

So I asked him, "What would you do if you thought it was cancer?" He said, "We’d do a biopsy." This was on the 23rd of December. He said, "Mate, I’m not doing a biopsy. It’s invasive and it’ll muck you around for a month." I said, "Mate, I’d rather be mucked around for a month than have a regret." My mantra is no regrets. So if I’m in business and I get a whiff of a problem and I see the numbers pointing to something, I scratch the surface, find a problem, and I want a biopsy. He said, "You go away for Christmas"—I was off to New York for Christmas and New Year with a bunch of mates—"When you come back, we’ll see." I said, "When do you come back from holidays?" He said, "Monday, the 16th." I said, "Do you operate on Monday the 16th?" He said, "Yep." I said, "Well, book me in."

I turned up there. As he was putting me under for the procedure, he looked at me and said, "Mate, in a couple of hours’ time, I’m going to win this debate." I said, "Good. Hope you do." Anyway, I woke up from recovery, and he came in to see me. He had this look on his face and said, "Mate, I owe you an apology." I said, "Why? What happened, doctor?" He said, "Not only was there one lesion, but there were three, two of which the MRI didn’t pick up. They were smaller but very aggressive, and they were within five millimeters of your nervous system and pelvic floor." He said, "If we’d left this 12 months, it would have been in your pelvic bone." And he said, "The good news is, robotic surgery can get within three millimeters without making you incontinent, and I’m confident we can make this work."

So obviously I had a bit of doubt in this doctor because he hadn’t listened to me, and then I pushed him, and suddenly we got the worst-case scenario. I sought another opinion. I rang him back and told him I’d sought an opinion from someone else who’d done twice as many operations as he had. He said, "Scott, if I was you, I’d have done the same thing, mate. Honestly, this is groundbreaking. I haven’t seen this in 30 years, and you’ve changed my whole outlook on how we deal with these things. I’ll be completely different in the way I look at this in the future."

He said, "But mate, he might have done twice as many operations as me. He’s a great surgeon. But you’re not a number to me. I owe you one. And I believe I’m the best in the business, and I’m going to make this right for you." And he did.

The key takeaway I want to share with all the men in here is: We’re not bulletproof. I thought I was. I had so many people around me who had cancer, and I felt for them, I supported them, but never in a million years did I think it would be me. I eat well, I train every day, I’m very disciplined in every aspect, and it happened to me. If it can happen to me, it can happen to anyone in this room. And it’s not just men. Women are better at going to the doctors than we are as men, but make sure you go every 12 months. Even if your PSA reading is low, focus on the velocity of change from one year to the next. Never leave the GP without asking them to print out your results and give them to you. It’ll always have your prior tests and your current tests so you can benchmark them yourself. GPs are so under the pump these days that they don’t have the ability to keep up to speed like they should. They're like accountants—things change, and we need to rely on our GPs and our accountants and advisors to keep up with the latest information to provide us with the best advice.

That’s what happened. So please learn from my experience. I was amazed that not my closest mates, but the next tier of mates and acquaintances, when I spoke about my story, I found two others out of 20 who had been through prostate cancer and never said a word. I had no idea. They were embarrassed, they were ashamed, they didn’t want to talk about it. And I thought, stuff that. If I’ve got to go through what I’ve gone through, I’m going to make it for the better good. I’ve probably told 100 people this story now, and I’ve just added quite a few to that. Out of those 100 people, I’d say that 60 of them were shocked, went and got tested, and out of those, 5 have been diagnosed with a form of cancer they had no idea they had. Three of them with prostate, two with bowel cancer, one with advanced bowel cancer. He had pains, he had all the symptoms, but he did nothing. He was a tradie, just worked through it. His body got used to the pain, didn’t take much notice, didn’t share it with his partner. He’s just finished five months of extensive chemo, and he’s touch and go. The other four have gone through the procedure and they’re healthy.

So the positive from this is, I’m actually glad I got it because I’ve been able to save five people’s lives. And hopefully, by sharing this story with you today, I can save a few more. The stats are pretty high.

Brett Kelly:
And guys, it’s a very important story. Our business supports Cancer Schmancer as well in the US. Fran Drescher, The Nanny, had a similar situation. She had pain. She went through eight doctors. The last doctor told her she needed a psychologist. Often women with health issues are told they’re emotional and need counselling. Anyway, she finally found a doctor who took her seriously, found that she had advanced cervical cancer, had a radical hysterectomy the next day, and started a cancer charity.

My daughter had a heart condition. She was in hospital premature. My wife had had a similar general heart condition. And we had said to the doctors, we can see she’s in neonatal intensive care, we can see her next to the other kids. My wife is like, there’s something with her heart, you can tell by the DSAT.

And I literally had a doctor come to me and say, "Look, I think your wife has PTSD from her own medical condition. She needs counselling. She continually harasses us about the state of Audrey." And we took Audrey home. About seven weeks later, she went completely grey, collapsed on the floor as a tiny seven-month-old. We called the emergency, the ambulance. The paramedics came in. An older paramedic just grabbed her, knew exactly what it was, stuck her head in ice water, revived her, took her to the hospital, and he walked in, found that doctor, and poked him in the chest and said, "This child’s got a heart condition. Now you work out what it is."

We went through test after test until finally, she got big enough that they could diagnose it. So we all have medical professionals, accountants, lawyers, and other professionals who give us advice, which you should listen carefully to, but your intuition is almost always right. If you're not 100% certain, no professional should ever belittle you for asking another question, and you should ask another question and keep pushing until you get an answer.

So I really appreciate you sharing that today, Scotty. It was the reason I asked Scott to share today under the topic of health, because without your health, you don’t have much. And so, it’s a great story, and I know it’ll make a difference. So, Scotty, thanks for your courage in sharing what is a huge story.

Scott Evans:
Thank you very much. Thanks for having me.

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