Episode #649: Building A Business That Can Run Without You

From ScaleUp Radio · 01:04:53

Show by ScaleUp Radio

In this episode of ScaleUp Radio, host Kevin Brent is joined by entrepreneur Rachel Hill, whose journey takes us from building and selling a multi site childcare business to breathing new life into a closed model village and launching a new consumer brand almost by accident. Rachel started Hillside Childcare at just 26, converting a granny flat into a 16 place nursery as a way of helping to pay a new mortgage. That first nursery eventually became a four site operation looking after 299 children. What makes Rachel's story particularly interesting is not simply the growth. It is what she learnt about making a business repeatable, creating a strong culture, managing one of the largest costs in a people intensive business and, ultimately, building a company capable of operating without her. That last point became particularly important when Rachel decided to sell. After years of being the person everyone turned to when something went wrong, the pressures following COVID left her questioning whether she still wanted to be the one responsible for fixing every problem. The decision to sell came remarkably quickly. During a dog walk, Rachel decided it was time. Rather than formally taking the business to market, she approached an established buyer directly through LinkedIn. Five months later, the deal was complete. Rachel handled much of an intensive due diligence process herself because she wanted to protect her staff and families from unnecessary uncertainty. She also rejected the first offer, negotiated a price she was comfortable with and ultimately achieved a clean exit with a one off payment and no requirement to remain with the business. One of the standout lessons from the conversation is this: A business that can operate without its owner is not only easier to run. It can also be considerably more valuable when the time comes to sell. Rachel had developed systems, policies, procedures and a management structure that meant Hillside was not completely dependent upon her day to day involvement. That independence became an important asset during the sale. But selling Hillside did not mean Rachel stopped being entrepreneurial. While the sale was taking place, she bought Bondville Model Village, a closed and run down one acre attraction containing around 200 miniature buildings. Rachel saw the potential in an underdog. After months of renovation, Bondville reopened, but the first version of the business model was not right. Trying to operate throughout the year meant the winter numbers simply did not work. Rather than persist with the original plan, Rachel changed it. Bondville became a seasonal attraction, creating a business model better suited to customer behaviour and the economics of the site. That willingness to change direction appears again in Rachel's latest venture. Unable to find the right candles for Bondville's gift shop, she created her own. The result was 45 by Rachel Hill, a range of candles inspired by the model village, each incorporating a miniature keepsake and its own story. They repeatedly sold out, leading Rachel to explore how the range could grow beyond Bondville through a dedicated Shopify store. In this episode Kevin and Rachel discuss: • How a 16 place nursery became a four site childcare group serving 299 children • Why replication and strong operating systems were critical to growing Hillside • How Rachel maintained consistency as the business expanded across multiple locations • Why staffing became one of the toughest challenges in the business, particularly after COVID • The importance of culture and creating genuine buy in from the team • Why Rachel closely monitored staff wages as a percentage of turnover • The pressures that come when the founder remains the organisation's ultimate problem solver • What finally prompted Rachel to sell Hillside • Why she chose an off market approach rather than putting the business openly up for sale • How she approached a potential acquirer directly through LinkedIn • What five months of due diligence looked like from the seller's side • Why Rachel kept the sale confidential from the wider team during the process • How she valued the business using profit multiples and property values • Why being prepared to reject the first offer mattered • The value of building a company capable of running without its owner • Why Rachel bought a closed model village while simultaneously selling another business • How Bondville was renovated and relaunched • Why Rachel abandoned the original year round operating model • The importance of accepting quickly when the economics of an idea do not work • How a product created to solve a problem in Bondville's gift shop became a new business opportunity • Why Rachel believes entrepreneurs should benchmark themselves against the best rather than simply comparing themselves with local competitors • The value of hiring people who are stronger than you in the areas where you are weak The one key thing Build the…

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