The hum of a steam train, the rhythm of blues and roots music and the energy of a live audience. These are the ingredients @Hugo T Armstrong mixed over 30 years to create and grow the legendary @The Blues Train in Queenscliff, Victoria.
Now it's time for Hugo to move it on and he's currently in the market to find a new owner for this iconic business . We cover a lot of ground in this episode and Hugo talks about;
- growing up in the music-soaked town of Queenscliffe
- making mixtapes and DJing school socials
- dreaming of a life centered around the magic of music
- #communityradio
- the revitalization of the @QueenscliffMusicFestival
- #bellarinetourism
- how he honed his skills in marketing and promotions
- yearning for more and how that led to him kicking off The Blues Train
- transforming an ad-hoc event a thriving business
- the bumps (technical mishaps and operational challenges)
- perseverance
- preparing a business for sale and the importance of having;
- an exit strategy (at least 5 years in advance)
- an operations manuals and compliance to make a business more attractive to potential buyers
- a team of professionals to assist in the selling process
- a focus on maintaining the business's performance and value during the sale
Timestamped summary of this episode:
0:00:00 - Introduction,
Michael introduces the podcast and welcomes Hugo T Armstrong, the owner of the legendary Blues Train in Queenscliffe, for a discussion on business sales and exit planning.
00:01:13 - Hugo's Background in the Music Industry,
Hugo shares his extensive background in the music industry, including his early days at PBS FM and his passion for broadcasting and DJing. He also talks about his involvement in the St Kilda music scene and his role in saving the Queenscliffe Music Festival.
00:05:29 - Saving the Queenscliffe Music Festival,
Hugo explains how he took on the challenge of saving the bankrupt Queenscliffe Music Festival in 1996. With the support of the local community, he successfully transformed the festival by adopting the PBS FM model and showcasing a diverse range of Australian music.
00:10:15 - Growth and Success of the Queenscliffe Music Festival,
Hugo discusses the exponential growth of the Queenscliffe Music Festival under his leadership. He mentions his proudest moments, including the launch of the first digital radio platform in Australia and the festival's partnership with the ABC.
00:12:47 - The Blues Train and Other Ventures,
Hugo briefly mentions the Blues Train, his other successful business venture that started in 1994. He also mentions his involvement in curating other festivals and his past roles in Ballerine Tourism and Queenscliff Council's financial advisory.
00:15:09 - The Beginnings of the Blues Train,
The Blues Train started as a small winter concert series with a variety of musical performances. It was an organic and unplanned venture that gained popularity through word of mouth. The immersive nature of the show and its ability to provide a unique experience to repeat customers contributed to its success.
00:17:14 - The Evolution of the Blues Train,
The Blues Train initially had no intention of becoming a business. It was a DIY project with limited resources and technical difficulties. However, over time, it grew into a successful venture, attracting investment and government support. The internet played a crucial role in expanding its reach.
00:18:52 - Ownership and Infrastructure,
The Blues Train operates on railway tracks owned and managed by Victrac, a division of the Victorian government. The rolling stock is maintained by the Geelong Steam Preservation Society. The vintage trains, some of which are over 100 years old, add to the unique appeal of the experience.
00:22:56 - Saving the Blues Train,
When COVID-19 hit, the Blues Train was the only business worth saving for Hugo Armstrong. Its positive impact on the local community, including economic benefits and music tourism, made it a priority. The investment in the railway infrastructure and government support helped ensure its survival.
00:27:45 - Music Tourism in Australia,
Hugo highlights the lack of focus on music tourism in Australia's tourism industry. He believes that showcasing Australian music and leveraging its global success could
00:30:41 - The Local Economic Benefits of the Blues Train,
The Blues Train has brought in $3.1 million of local economic benefits and has the potential to attract more tourism with its new track. The Byra Bay blues and roots festival is a prime example of the economic impact of the music scene, generating millions of dollars. The festival could be complemented by an annual music festival featuring larger bands of various genres.
00:31:37 - Framing the Business as a Saleable Asset,
The Blues Train is positioning itself as a business that appeals to a range of potential buyers. While there is a limit to the number of people the train can accommodate, there is significant opportunity for growth. One suggestion is to introduce an annual music festival on the train, featuring different genres to attract a diverse audience.
00:32:31 - Planning Exit Strategies and Removing the Figurehead,
To plan for the future sale of the business, it was necessary to address the perception that The Blues Train was dependent on one person, in this case, Hugo T. Armstrong. Steps were taken to remove Hugo T. Armstrong from marketing and on-site activities. However, during COVID, he had to be brought back to maintain government support. The business underwent a rebranding process to establish itself as a separate entity from the figurehead.
00:36:12 - Importance of Having an Exit Strategy,
Many business owners do not have an exit plan in place, which can lead to difficulties when unexpected circumstances arise. It is essential to think about a future exit strategy when
00:45:24 - Importance of Operations Manuals,
Hugo emphasizes the importance of having operations manuals to ensure that a business can run smoothly even if the owner is absent. He believes that a business should not rely solely on the owner's knowledge and that having documented procedures is crucial for compliance and risk management.
00:46:01 - Planning for Business Sale,
Hugo advises small business owners to start planning for a potential sale at least five years in advance. He warns against relying on a miracle buyer and suggests removing the temptation of cash from the business, as cash is not a reliable indicator of the business's value.
00:47:45 - Tax Implications and Preparation,
Hugo shares his experience of working with his accounting firm to understand the tax implications of selling his business. He highlights the importance of staying up to date with tax laws, capital gains exemptions, divisional loans, and other financial factors that can significantly impact the selling process.
00:51:50 - Compliance and Business Value,
Hugo emphasizes the importance of compliance in making a business sellable. He compares a non-compliant business to an unroadworthy car, stating that compliance should be the core of every business. He also warns against letting the quality of the business decline once it's on the market, as it can negatively impact its value.
00:56:48 - Reconnaissance and Richard Branson's Advice,
Hugo encourages business owners to do their homework and reconnaissance when planning for an exit strategy. He also shares Richard Branson's advice to always
00:58:57 - Working on Multiple Platforms,
Hugo discusses their current focus on multiple platforms and digital marketing, highlighting the success of their content strategy.
00:59:09 - You Can't Sell a Secret,
Hugo emphasizes the importance of having a visible online presence and mentions that if the Blues Train is not easily found on Google, it would be a significant setback for their business.
00:59:37 - Casting a Wide Net,
Hugo advises that when looking for buyers or clients, it is necessary to reach out widely and not limit oneself to a small pool of potential opportunities.
01:00:02 - Learning from Resources,
Michael expresses gratitude towards Hugo for sharing his insights, acknowledging that resources like this podcast can provide valuable knowledge that helps small business owners avoid learning things the hard way.
01:00:10 - Time in Reconnaissance,
The conversation ends with a quote about the importance of research and preparation, highlighting that time spent gathering information is never wasted.
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Reach out to Michael Kerr via the website if you need personal assistance or advice for your small business.
michael.kerr@kerrcapital.com.au
www.ownertoownerpodcast.com.au
[00:00:00] Okay, so welcome in to Small Business Bantar podcast.
[00:00:05] I'm sitting opposite Hugo T. Armstrong.
[00:00:08] Welcome in Hugo.
[00:00:10] Great to be here in this magical destination,
[00:00:14] Queenscliff.
[00:00:14] Yeah, for those listening, we're down at Queenscliff
[00:00:17] in the O-space on the harbor.
[00:00:20] Hugo is gonna tell us a little bit
[00:00:22] about his background in a minute.
[00:00:25] Prior to that though, the reason for our discussion today, Basically, in a nutshell, have spent the last 30 ideas involved in the music industry and broadcasting in one way or another. So I guess first started PBS FM, Melbourne's community radio station. I started there in about 1989.
[00:01:43] And I was working in hotels and bars Kilda, every artist in Melbourne and Victoria was pretty much in St. Kilda. And the music scene wasn't in Fitzroy and Northcott. I can assure you the music scene. And Melbourne was a ghost town back then, and the music scene was, the epicenter was very much St. Kilda and then probably the punters Club Brunswick
[00:03:01] Street, you know, the Old Greek Theatre and a of oval. But I mean, this is, you know, these are really housey in days, I know everyone says that about their youth, youth, but you know, it was just, it was quite incredible. And out of that, obviously, opportunities arose
[00:04:21] because, you know, I sort of was interested
[00:04:25] in blues and roots, and I was the first big drink from the poison chalice where everyone said, are you kidding me? You're going to quit your job at PBS. You're going to move back to your hometown and you're going to save a bankrupt
[00:05:42] music festival that the council's just taken out a and promoter having, you know, limited experience, but home ground advantage. Yeah. Everyone wanted to see the local, love it. It's a fantastic community event. But you know, these things come and go and it's like a rare
[00:08:23] group of people that... There's two reasons why-Wah Anderson to Gill or, but to all these, look, people could say that this town had something right back to military bands
[00:09:44] in its military history. probably the metal stuff or anything, but I pretty much went, okay, PBS has got, what it was that I know, and I know Australian music, I know blues and roots, I know African, I know rockabilly, I know funk, I know soul, I know all these bands. I went, well, why don't we just steal the PBS model and turn it into a festival. So all the bands that you hear on this radio station, let's put them on.
[00:11:01] And the idea was that it wasn't genre based.
[00:11:04] It was Australian contemporary music,
[00:11:06] which included, you name it. for help and found that the only way that there would be more people employed by that festival would ultimately in a way be for me to leave. It's like the job where you keep saying mate I'm doing two jobs, I'm doing three jobs and then when you leave they have an order and they go you know what, Michael was doing two or three jobs and you say yes, sort of trying to tell you that. So look that was, that was, for service to the music industry, and you've been a former chair of Bellerine Tourism and Queens Cliff Council's financial advisory. So, to get back to that point where you came back from the city, you borrowed from PBS,
[00:13:40] which is what the community really is all about. Whether you like blues music or not and people, you know, again, do I like blues music? Well, have you seen the Blues Brothers movie? Oh, it's my favorite film. Well, hello, you like it. Turn up, most of our patrons aren't music aficionados. They're not particularly passionate about one genre or another, but they turn up and I think it's just the perfect recipe.
[00:15:01] It's like those core ingredients that you would see setting down there on a, you know, whatever night, Saturday nights and Friday nights. Look, and we just, you know, I guess it was one of those, again, incredibly organic things. Sounds like a practical joke.
[00:16:20] Merchant Banker, pastry chef, a chef, an opera singer,
[00:16:23] were running past Gwenys Deli in a homestead called Sima Park.
[00:16:27] They put together a Winter Concert Series, which included ended up a business is almost quite preposterous because we were literally, I mean, the P.A. blew up in one of the carriages the minute we started with the rose and mass and I got the tin foil out of a cigarette packet and wrapped it around the fuses. I mean, it was just, I mean, the railway hadn't run night services with the train broke down, the generator
[00:17:40] broke down. I mean, this is 1994. It was, you know, it was just completely, it was just
[00:17:46] completely made up and it was literally no. Who owns the train? Is there any mistake holder, but in simple forms all railway tracks in Victoria are managed and owned by VicTrack, which is a division of the Victorian government. So it doesn't matter which train line you're looking at met regional Lubbabah. They are in the infrastructure. No, the tracks and the land.
[00:19:00] The infrastructure in Melbourne might be a French company have the rolling stock for our trains or in
[00:20:06] that you've had. It's just so totally unique. These beautiful old trains maintain by another community organisation and volunteer because they do it for whatever reason they do it,
[00:20:13] but it's preserving history.
[00:20:14] So I mean we all do what we do well. I've got the business that provides the entertainment,
[00:20:18] the bookings, the compliance, the organisation. The railway run, do what they do really well.
[00:20:24] They run trains, hook and pull, and they do it brilliantly and keep it probably needed to be a business. Like it was running, I was in partnership with the local original partners, we were all there, but times changed and then, you know, started the business. And also, the business changed. This thing called the internet rocked up. This was a business that was started with a flyer on a deli counter.
[00:21:41] There was no, there wasn't even a phone number you rang.
[00:21:44]
