Member Case with Sue-Ellen Watts
Scaling a boutique beyond a lifestyle business takes money and commitment. On this episode, Sue-Ellen Watts, Founder & Global CEO at Wattsnext Group, sheds light on how she embraced a lifestyle business to fund a new venture that she can grow and scale.
TRANSCRIPT
Greg Alexander [00:00:15] Welcome to the Boutique with Collective 54, a podcast for founders and leaders of boutique professional services firms. For those that aren’t familiar with us, Collective 54 is the first mastermind community to help you grow, scale and exit your firm, bigger and faster. My name is Greg Alexander and I’m the founder and I’ll be your host today.
And on this episode, we are going to discuss what to do if you’re trapped inside of a lifestyle business. A lifestyle business is something that is a great business. Happy clients, happy employees, decent income. But it’s really not going to scale beyond that. And it’s certainly not going to be something that is a sellable asset in the future and not an asset that can create generational wealth.
Nothing wrong with the lifestyle business. I mean, who doesn’t want a great lifestyle? But if your aspirations are more than that, sometimes a lifestyle business can actually be a trap because things are good and it’s tough to walk away from things that are good. You only walk away from it if you want good to become great and we have a member who’s our role model on the call. Her name is Sel Watts, and she has just about the most courageous story of anybody I’ve ever heard of someone who was trapped in a lifestyle business and was so determined to get out of a lifestyle business, she made some dramatic changes to her life, and I thought she would be a great person to have this conversation with. So, Sel, it’s good to see you. Thanks for being here.
Sel Watts [00:01:55] Thank you Greg.
Greg Alexander [00:01:57] And if you wouldn’t mind, maybe provide an introduction of yourself and a little bit about your story to the audience.
Beginning in HR
Sel Watts [00:02:04] Yeah, sure. Well, I started my first services business in Australia 15 years ago. It’s an HR consulting business, people performance and engagement. Basically, we work with small to medium businesses and fast-growth start-ups in everything relating to their people. And when I started that business, I had really nothing going for me at all. I had no qualifications. I had never been in business or grown up in a family business. I was in a new, new city or new city in Australia. I didn’t have any contacts or networks. It was the start of the global global financial crisis and I had no money and I had a three month old baby.
And so I really if I’d asked a business coach whether I should start a business, I’m pretty sure anyone would have said, “You have nothing going for you”. But I did have two things. One was I had a really clear vision of what I wanted to create. And at the time, I wrote this vision to say that I wanted to build this company to be internationally respected and and to disrupt the HR industry. Because I got into the industry because I really didn’t like it at all. And I felt that it was misunderstood and could be could be so much more beneficial to companies.
So I had – So I had a really clear vision and I had a bucket load of naivete. I just I had no idea at the time that I had all those things going against me or that I didn’t have anything really going for me at the time. I just didn’t realize that it wasn’t actually until five years in when people started asking me to talk about the business, that I was preparing my talks and realizing that I actually didn’t have much, much going for me at the very beginning. So. So anyway, I mean, I think it’s when you have less to lose, it’s easier to be naive. I don’t really have that luxury now, but I always had big plans from day one and I had so many people knocking me all the time saying I’d never be able to do that. I ended up having three sons every time I fell pregnant, ome people would say, “Well, are you going to close that little business now?” No one ever thought that it was going to become anything.
And anyway, for the first five years, I just put everything into it all my time. I really just spent every cent and every spare second outside of raising babies into this business. And I, you know, I really didn’t have any idea, but I’ve always invested in coaches, mentors, conferences, like really addicted to self-development. And so once I got five years in, I was sort of starting to burn out a bit.
And I – and I had this coach said, you know what? You need to start taking something from the business. You need to get yourself a nanny. You need to buy a house that’s more suitable for, you know, a growing family. You need to just get some things around you that will make it easier. And that was – that was the best advice, because it was one of those things where I wasn’t willing I didn’t want to do that. I just wanted to keep putting into the business. But it was taking its toll. And once I did that, I was then able to take it to another level and and that was really exciting. And I was sort of thinking, well, like we’re growing fast. I had another baby and I kept it going. We just grew year on year, but it was always and so.
So what happened then was I started to have a nice lifestyle. So for the first time in my entire life, I could afford to have some nice, nice things. I bought myself my dream car and we started to go on some family holidays and I started to shop in the expensive shops and you know, it was great. I had grown up pretty in a difficult time. I had a difficult childhood. So this was this was starting to be like, oh, this is interesting.
And I remember – I remember a time when I was like, it’s funny because, before, every time, every month, every client, when every time I hit budget, everything was a bonus. Because when I started, I didn’t I didn’t have any idea what I was going to have to achieve anything. But once I started living, the lifestyle every month was I have to get this budget, I have to win this client because I had created this lifestyle and it was it was fine. I could afford it.
But it did change my feeling about the business. And then I hit my ten years and I was just a bit over it, to be honest. I was very proud of what I’d done. I’d built the business from nothing, with nothing, and I’d had three children at the same time. And and as I said, I’d I’d had so many people tell me that I was everything that I was doing was wrong and that I was selfish and I was a bad mother. And like, it just went on and on and on. So I was really proud. But I was – I think now I was burnt out and I felt like I wanted to I wanted to be involved in something that was more exciting, if you like. So I sort of where I got to.
Greg Alexander [00:07:36] Yeah. So let’s let’s jump in there because there was a lot and there was a great story. And your story is very similar to many that wind up trapped in a lifestyle business. They hit that ten year window. I don’t know what it is about ten years, but there’s something about that ten year mark that everybody says, hmm, maybe I want to do something more interesting.
So the next part of the story, as I understand it, I’ll give you a chance to explain it, is, is that you walk away from the nice house, the nice car, the wonderful family shopping in the fancy shops, and you literally get on a plane and fly to New York and start over. So pick it up from there, please.
A new career in a new town
Sel Watts [00:08:13] Yeah. So I didn’t come to New York till I was 35 and I kept coming -was so when I was starting to get really burnt out and sick of the business, I kept coming to New York three or four times a year and stay for three weeks. People were saying, What are you doing over there? I don’t know. I mean, I think I was really just running away from the business, to be honest. And I was here and I just felt like, oh, my gosh, this is the entrepreneurial playground of the world. I want an opportunity. This is the – this is the big pond that I need to be in. This is where I need to be. And so I spent two years commuting.
So I lived in New York, my family was still in Australia, and I would fly back every six weeks to see the kids basically. And then I would come back and try and see if I could get my company – what’s next? Started in the US in New York, and I’d spend the days, you know, going from meeting to meeting people telling me over and over again, “You’re never going to make it here. We don’t need your services here”. And I’d get on the subway at the end of the day, and I’d cry all the way back to wherever I was staying and, you know, and then I’d get back up again and – and do it all over again.
And I did that for two years. And – and at one point, I said to the kids, Look, I really want to I really want to try and do this New York thing. But there’s three things that could possibly happen from this one, I could go and make it, and it’s a huge success and we make lots of money. It’s amazing. Two, I go and I can’t make it and I come home with maybe a little bit less money and amazing experience or I lose everything we have the house, the businesses, everything, and they were like, “okay, have a crack mom”.
So I was like, okay, everyone knows what I’m doing and I walked away. Now an interesting part was putting when I stepped away from the business in Australia is everything I wanted. I wanted to go and get out of it and go and do new things. And at that point, I had invested in another company in an IoT GPS tracking company, which is I’m still in and growing. But that wasn’t that. I still it wasn’t what I wanted to spend all my time on.
But when I left, I stepped out of the business. I was surprised by how I reacted because this was my decision. I wanted this. I was going to New York, but when I would sit in the board meetings in Australia, I was like a toddler crying because someone had stolen my toy. I found it really hard to adjust to being the founder and no longer the CEO and people coming up with ideas and implementing things that I didn’t like. And that was a real adjustment.
And what I learned from that was, you know, people can’t do it as well as I can do it. And I think this is what traps people in businesses. And I realized that if I wanted to go and chase my dream in New York, I had to be okay with them doing 70%, maybe even 60% of what I would do. I either stay in the business and it’s 100% how I want it or I keep the business. It funds me to go and do my dream and it’s not quite as good but get used to it. And I did. And now that I think doing a better job than I was.
And so anyway, I kept trying and I really didn’t think I was going to make it. I, I was constantly with my coach saying, I don’t know if I can do this. It’s just I can’t seem to get any, any runs on the board. And he just said to me, You just got to find another way. You got to find another way.
And this was not just business. It was how do I relocate? How do I relocate my boys? How does the education system work? The finance system? How do I get a visa? It was just overwhelmingly massive. And at the same time, everyone was saying, What are you doing? Don’t you miss your kids? How can you be away from them? You know, just enormous criticism. Anyway, I got them here unbelievably, and they arrived six weeks before COVID hit. So they got here. I got them settled, got them into school. And I was ready to just. Hit the ground running and that weekend everything shut down and they were home-schooled for 18 months.
How to view your business
Greg Alexander [00:12:23] My goodness. The timing of that is just unbelievable. And yet you – and yet here you are. You persevered through all of that.
Sel Watts [00:12:33] Yeah. I mean, there were lots of people saying to me, when you’ve got to come home, it’s it’s irresponsible. And also, obviously, their dad is in Australia and he – he couldn’t fly, was going to come here every six weeks. Those ten months when he couldn’t come, couldn’t seethem. So it was a lot of pressure on the family. And here I was with suddenly three kids at home being homeschooled and- and me trying to get a business off the ground, which had just tanked because, you know, I hadn’t had enough of a runway. And and and I’m not domestic at all.
So I was way out of learning. I had to learn to cook and use the washing machine. And I was nearly every day I was like, oh my gosh, I’m failing. But it was because I wasn’t doing anything that I was good at. But everyone was saying, you know, this is terrible. You need to come home. And I was I commuted for two years. I’m not going home. I’ll never get back here. And I really believed in the comeback. And I have a very romantic view about New York and – and being an entrepreneur in New York. And so we just stuck it out.
And I think our – our Aussie culture made it really easy, made it easy for us. We were sort of very relaxed about everything. And, and the Wattsnext in Australia funded – has funded me to be here. So my core company is the reason that I could do it. And I think if I’d sold that company I wouldn’t have had the funds to do what I’ve done. And you know, it’s a good company to get through any sort of economic crisis because either business is booming and they need staff and they need help with that growth or the world is falling apart and they need to work out what to do with their people. And so we we sort of can get through those rough, rough times. But the two businesses in Australia thrived during that time.
Everything fell apart here. But I knew it was just a matter of time. I knew I just needed to ride it out, you know, deal with the fact that I felt like I was pouring all my money down the New York drain and my counter in Australia was horrified by what I was doing and -and I was like, you know what? I started this business and I, I spent ten years like working nonstop and raising my children so that I could, you know, have the freedom to live, dream – live my dream. And this is it right now. And – and I believe I’d back myself. I believe that, you know, I’ll get through it and, you know, be successful.
But it’s – it’s been an incredible journey. And I think that being able to look at what’s next because there were times when I really hated the business and I was just over it. And so many things that happened in the time that I’d had it and so much in my own life had changed. And I it – it took some time for me to sort of put a different lens on and look at it in a different way and see it.
Here’s a good example. I used to call my business my baby. I’m sure you’ve had lots of people talk about, Oh, my business, my baby. And I remember one day because in 2016 I nearly lost everything. I had a really tragic year and I was sitting at home and I was looking out at my car and I was thinking, You know what? I’ve always called my business my baby.
But babies run your life. They tell you when you can sleep, when you can go out. They are in charge. And I thought, this isn’t right. I looked at my car at the window. I thought, No, this business has to be my vehicle. This is the vehicle that’s going to take me where I want to go. And I need to make sure it’s healthy and running well. And I can bring on passengers and get rid of passengers. But it’s – it’s a vehicle for me. And when I changed, when I realized that that changed everything to me, I looked much more strategically at my lifestyle business and what was possible for me, and I think that helped a lot.
Finding your business courage
Greg Alexander [00:16:34] It’s such a fascinating story. So to dramatically summarize, the way you got yourself out of being trapped in a lifestyle business is you got on a plane and flew to a strange place, brought your kids with you and started over that. Yeah. Fair to say. Yeah. And do advise that type of boldness to other members that might be trapped in a lifestyle business and – and what gave you the courage to do it? Because it would have been easy just to coast.
Sel Watts [00:17:04] Yeah. I mean, it’s interesting because at tough times when I’ve been here, I’ve thought, well, I could go back to Australia and have all the money I need and not really have to work that much and go to the beach. And I’d have a pretty nice life, but. I think most business, most people that start their own business or most entrepreneurs don’t do it for the money.
They do it for the challenge and that ability to see what’s what’s possible and what they can achieve. And I think that that’s never-ending. It doesn’t matter how successful you become or what goals you hit, you always want to see what else you can do so that the whole coasting was just – it didn’t even I didn’t even consider that it was only those few tough times when I burnt the dinner and I was really struggling. And then I was like, I should probably I could go back.
But I think for people that are I mean, I know my story is very extreme and I think people have and also like when I started this journey, I was like 42. So I was like middle of my age. Like my age. My kids are 15, 13 and nine. You know, most days I had a lot of great reasons why not to do it. You know, the kids are in the middle of their school and, you know, I’m too old and all of those things. But I think that I’m a big believer that you should never settle in your life and that you should chase your dreams and you should not think about what society expects of you.
You shouldn’t think about the top, like what how old you are, and just go for it and back yourself. And, and as we say in Australia, have a crack and know that if it doesn’t work out you’ll be okay. If you’ve been able to be an entrepreneur in any capacity, my belief is that you’ll be okay. So when I started I had nothing and I never had anything growing up. Everything I built, I built myself on very shaky foundations. So I was like, Well, if it doesn’t work out or if I lose everything, then I just start again.
And so there’s this just belief that I’ll work it out. But there’s the worst possible thing that could happen is if I just settled and I knew that there was I had so much more potential and I didn’t do it because I was afraid. Yeah. And when I think about, you know, my kids and I, I remember thinking to myself, if I could only teach them one thing, what would it be?
And it was to chase their dreams. It’s like just no matter how unlikely it is, no matter what someone says, just do it. Because even if you don’t make it, the journey will be well worth it. And then I thought, I can’t tell them to do something that I’m too afraid to do. I can’t say go and live my dreams because I was too gutless to do it. So I was like, I’m going to give my kids a front row seat indream chasing and and have a go and and we’ll and we’ll just go for it. And the journey’sbeen incredible.
Conclusion
Greg Alexander [00:19:58] Yeah, well, listen, I could talk to you about this forever. It’s such a great story. And we have the member Q&A. I’m sure this will be an incredibly powerful thing, but we are out of time. But so, listen, on behalf of the members, I just I want to thank you for contributing because I think you’re an inspiration. I think sometimes people settle, and I think it’s a real tragedy not to chase your dreams and to have the courage to do it, which you clearly have so far. So thanks for inspiring all of us.
Sel Watts [00:20:29] Thanks, Greg. I appreciate the time. Greg Alexander [00:20:32] Okay. And for those that are interested in topics like this, I encourage you to pick up a copy of our book. It’s called The Boutique: How to Start Scaling of Professional Services Firm. And for those that might be interested in joining a community and meeting extraordinary people like Sel, consider joining our mastermind community, which you can find at collective54.com. Thanks again, Sel. We’ll talk to you soon. Thank you. Bye bye.