016: No Investment Into A 3 FTE Software Company In 2006 Grew To 88 FTE, $12M Sales, $2.2M Profit And Listed On The ASX With A $27M Valuation (Stephen Chetcuti)

australia fte 51-100 podcast sales $20m-$30m aud technology Apr 12, 2020

In this episode, I interview Stephen Chetcuti, the CEO and Managing Director of Protegic, an Australian-owned independent project management delivery and management consulting company. He has more than 20 years of experience in small and medium enterprises, and his work has involved strategy formulation, commercial negotiations, corporate advisory, business development, and project management. His ability to define competitive advantages in new ways is unique, and he works with clients in a cooperative and collaborative fashion that enables them to implement the strategic insights.

Back in 2006, he spotted two great middleware engineers who wanted to close down their company, and he became the third full time employee and shareholder by just leveraging sweat equity. With 17 mergers and acquisitions under his belt, his early decision to strongly focus the company on specializing in one niche in middleware really paid off. By late 2011, after five and a half years of solid growth, they had 88 full time employees, $14 Million in annual sales, 16% or $2.2 Million profit, and were listed on ASX at a valuation of $27 Million. 

Slicing off 20% of EBIT each year into profit share for their team and giving most of them shares, coupled with a big focus on culture and KPIs helped push sales to $20 Million per annum seven months after listing, when the founders’ earn out was completed. Stephen believes the hardest thing in growing a small business is mixing cash investment against your own aspirations, and the advice he would give himself on day one is, “Believe in yourself and stay the course”. Stay tuned to gain value from his valuable insights on small business ownership and growth.

This Cast Covers:

  • The Vanguard Integration backstory, doing mergers and acquisitions, growing companies, and turning them around.
  • How the business made money and the impact the 2008 financial crisis had on it.
  • Managing employees like a sports team and creating a great culture.
  • Overcoming challenges in 2010 and holding on to all their team members despite a 60% staff utilization.
  • How the idea for the IPO came about, the processes they set up in advance to make it a success, and how it all came together.
  • The moment he felt they had succeeded from both a CEO point of view and commercial point of view.
  • Buying out the initial shareholders, financing the business’ growth, and giving some equity to the staff.
  • What he would do if he was in an ideal scenario of being a startup with plenty of funding.
  • Losing 25 billable units in 2010 and not being an advocate for sacking people.
  • Working on himself so he could add value to the business.
  • Working out how to pay wages on every 15th of the month despite some clients paying in 90 days.
  • The mindset shift of valuing the success of others as a team leader.
  • The importance of a small business owner knowing their numbers and metrics.
  • How to leverage the power of networks in having good people bring good people in.
  • Getting his MBA before they took them out of cornflakes packets and investing in coaching courses.
  • The hardship of a small business owner mixing cash investments against their own aspirations.
  • Excel: Stephen’s number one tool for growing a small business.
  • Thriving in business no matter the challenges by believing in oneself and staying the course.

Additional Resources:

…….

Quotes:

“Put one or two people around you that are not afraid to say to you, “You are wrong!” – Stephen Chetcuti

“Seeing success in others is far more pleasing than achieving success yourself” – Stephen Chetcuti

“Believe in yourself and stay the course” – Stephen Chetcuti

…….

Music from https://filmmusic.io “Cold Funk” by Kevin MacLeod (https://incompetech.com). License: CC BY (http://creativecommons.org/licenses/by/4.0/