Founder of ActionCOACH Brad Sugars is no newcomer to the entrepreneur lifestyle. His franchise, the first of its kind, has been in business approaching 30 years. With over 1,000 employees worldwide and doing hundreds of millions in revenue, he also has claims to fame as a best-selling author with his 17th book hitting shelves. While not the CEO of ActionCOACH, Sugars remains as the chairman, dictating the future of the company, and maintaining high level interests in eight other companies.
The man behind the business
The Australian and father of five now calls Las Vegas home. In the desert, the family takes pleasure in attending ice hockey games and concerts whenever possible. According to Sugars, the family are “big entertainers,” claiming that it is the Irish and Australian connection that he and his wife share.
From the age of 13 onwards, Sugars knew that he wanted to be in business for himself. One of his first ventures was a newspaper delivery route and after high school he would dive in headfirst. Having run everything from a pizza business to a hair salon, he has had his hand in over 50 different enterprises throughout the years. Sugars recalls multiple times being told that his ideas were too big and that he could not accomplish them.
While not a one-trick pony by any means, he considers himself to be particularly good at one thing. “What I am good at is running businesses. I am not great at hairdressing or great at the beauty salon. I never did any of it, but I am good at running the business of that business,” Sugars said.
Starting the business
Young and successful, Sugars would find himself in the eyes of a global audience. With this global audience came a desire for him to share the knowledge he had gained and his keys to success. The standout moment was when Robert Kiyosaki, author of "Rich Dad Poor Dad," asked him to come speak at his business school for entrepreneurs in Hawaii.
“I thought to myself, ‘Wow, this is amazing. People can get paid to travel the world and to just have a chat with people. I’ll do this,’” Sugars said.
From there, Sugars dove headfirst into the world of public speaking. He was a regular attendee of business seminars around the world. With these interactions, businesses began to ask for consultations. At the time, his time was largely taken up by his speaking obligations, but he offered to schedule calls on a weekly basis. Instead of consulting directly, he would coach the leaders of these businesses remotely.
According to Sugars, business people can take some time to figure out that they should create a business out of something. Luckily, Sugars had his "aha" moment and realized that there was a product that could be sold, yet the business would not be built overnight.
Sugars believes there are three key steps when starting a business. The first is defining what the product or service is that you want to sell. From there, you have to flush out exactly what that product or service looks like. Finally, you need to figure out exactly how the consumer wants to purchase what you are selling.
The hardest part for Sugars was actually getting the idea out of his head. He said that it really took him two to three years to figure out exactly what people wanted to buy. During this time, he taught seminars around the world. This allowed him to get his ideas down on paper or tapes recorded from his talks. Once Sugars had the ideas down on paper, he kept them there.
Over the course of his career, Sugars has written 17 books to pass on his knowledge. These books allowed him to build a reputation alongside building his team. For certain, the books were not the evolutionary end of his teachings. The next stage was turning them into a systematic methodology. By doing so, his partners were provided with his teachings in an accessible way that could be passed along to their customers.
“You have to remember I did not just build a business," Sugars said. "I built a whole industry. The business coaching industry did not exist, so we started from scratch in the industry not just from scratch in our business. We had to develop things and a lot of people have copied us and followed us since, but that was an interesting challenge. A whole profession had to be built.”
For Sugars, the easiest part of starting the business was money. With a need and a product to fill that need, there was almost no investment required to get the business running. The only investment the company ever took was a $15,000 overdraft check written by Sugars’ father to help secure their first office space. With only three employees, his father questioned what his son had done when first seeing their dedicated floor in the Brisbane office. “I said, 'Don’t worry. It will be full in a year’s time.' And it was. We had to take another level as well,” Sugars said.
Developing the business
On top of creating an entire industry around business coaching, Sugars also changed the seminar industry forever. He was one of the first people to bring people mass seminars and do it all for free. Over the course of two years, alongside a good friend, Sugars would lead seminars for 288,000 people. These people would build his customer basis.
According to Sugars, his seminars created the first “click funnel” before the internet was even used for that function. By doing seminars, he would give people a free, upfront taste of what they could gain by getting coached by his company. In more modern times, Sugars has transitioned to podcasts to serve a similar function. He offers up advice and his story, and from there business owners and leaders reach out.
From the very first day, Sugars sought out employees and eventually partners. As a “100% believer in leverage” he believes that business owners should be thinking about employees from the start. He says that the nature of business itself is to create a saleable asset. Saleable, in Sugars’ opinion, means that it can operate without the founder. He is adamant that the business should be sold to an investor as a self-sustaining business, not a job for someone to take over.
Growth
With a clear roadmap, an office and employees to help things along, ActionCOACH began to grow exponentially. As the company came from ground zero and spawned an industry around it as it grew, there is no percentage that can represent its growth. To put perspective to an unfeasible number, the company had three employees when Sugars purchased the first office space. Within two years, the company had 28 employees. After four years, he was employing 56 people.
“I looked at it from a simple thing," Sugars said. "You have to scale and you have to grow. The second law of thermonuclear dynamics is pretty dang simple when you explain it. The tree is either growing or dying and the same is true for a business. A business is either growing or it is dying, so you choose which one.”
Along the way, the growth continued and clients came from around the world. While many came originally as seminar attendees, as the company grew, inquiries began to flow through the door. One thing remained consistent through the growth, and that was that Sugars never targeted big name clients. ActionCOACH never sought out a breakthrough client to blow things up. Instead, it focused on small businesses, gaining clients wherever it could.
As the years went on, Sugars continued to successfully grow the company, employing people all across Australia. On his home turf, employment was easy and there were no international policies to navigate. However, the business refused to be contained by geopolitical boundaries and Sugars found himself looking at international expansion.
If any moment could be called a breakthrough, it would be when ActionCOACH made the transition to franchising. Employing people in places like Singapore and Malaysia had simply too many hurdles to overcome. Franchising would offer an easier way to expand the business beyond the confines of Australia.
Overcoming challenges unique to this type of expansion, Sugars was able to work with an acquaintance in Singapore. He developed all the documentation required to protect his intellectual property, and his white-collar franchise was born. From there he was able to recruit an even higher level of person to join his company. He soon would find himself surrounded by great partners that would help to grow the business with their unique skill sets.
For many companies, levels of extreme growth can cause issues with cash flow and the idea of revenue can quickly fly out the door. As an accountant by training, this was never an option for Sugars. The company has maintained good profits throughout the years by focusing on how it spends money. It does not operate on a budget. It spends based upon actual earnings and, therefore, avoids issues of overbudgeting and remains in the green.
Risks and mistakes
Up to this point, Sugars’ story has been one of many successes and doing things the right way. However, things do not always go smoothly. At one point, Sugars found himself in a situation that very few people will ever experience.
Liking the money more than himself, his partners took his money and fled to Fiji. Sugars found himself $500,000 in the hole with no way to pay off even venues and people that were owed that money. Outside of the legal issues to be overcome, Sugars still had to find a way to get people the money that they were owed.
“I remember sitting down at one point and my dad just looking at me and asking what was going on. I said, ‘I just don’t know how I am going to do this.’ He looks at me and he says this, ‘Make a list and start at number one.’ I said, ‘But I don’t know how I am going to do this,’ and he said ‘Have you made a million before?’ I said, ‘Yeah, Dad, I have,’ so he said ‘So you know you to do it?’ I said yes and he said ‘Do it again,’” Sugars said.
Having his own Homer Simpson moment and coming to the obvious realization, Sugars decided to take his father’s advice and simply do things again. The conclusion that he came to was that he had to live what he had been teaching to his clients all along. It would take some hard work, but Sugars would pull himself out of that hole. In the end, the biggest risk he was looking at was a bashing of his ego if his business failed while teaching others how to run a successful business.
While his partners fleeing does not fall under his responsibility, there have been “hundreds” of mistakes over the years that Sugars claims as his own. The point he hopes to make is that a company should make hundreds of mistakes over its lifetime, but none so big that they kill the business. “You know the bet the farm analogy? Yeah, I am not a huge bet the farm guy,” Sugars said.
Diversification
Through his almost 30 years in business with ActionCOACH, Sugars has seen the market swing from highs to lows, yet the company has already been prepared to weather the storm. Having started in a recession and successfully growing at that time, they saw profits skyrocket when booms happened. During the recession of 2008, the company was well prepared with cash in hand to keep themselves afloat.
Its main safety net is the globalization of the business. Offering services in over 80 countries, it is not tied down by one economic zone. If one country sees tough times, the company can boost its efforts in another. Having this diversification allows it to have flexibility to navigate the market during tough times.
Future
In the beginning, Sugars could have easily charged money for his seminars and made a quick buck. He firmly believes that by offering the seminars for free that the company was able to generate a massive amount of momentum that has yet to slow down today and continue toward the future.
Moving forward, Sugars is most excited about moving into India and new markets. In India especially, he has seen that the late baby boom, around 20 years ago when medical infrastructure truly came online, has created one of the highest percentages of millennials. This generation is largely moving out of poverty and creating a culture of purchasing.
This has created a growth of entrepreneurship that Sugars cannot wait to pass on his knowledge to. He described the entrepreneurs that he has interacted with as extremely excited and open to getting their hands on as much knowledge as possible so that they can further expand their business ventures.
Sugars used to be concerned that there could be another company that could emerge and steal the whole industry out from under him. However, he came to the conclusion that such a turn of events would be realistically impossible. For it to happen, someone would have to buy his company and then be able to replicate the intellectual property he had developed over the years. The reason this would be impossible is that Sugars is not the sole creator of that knowledge. His team has passed on their own findings to teams throughout the years with senior members coaching new members. The end result is a network of knowledge that could never be purchased or replicated.
Reflection
At the beginning of his story, Sugars was a believer in notions of hustle and grind. He worked tirelessly to make his business flourish before realizing that his hard work was covering up fundamental flaws. During this time, he saw himself sacrificing things on a personal level. Friendships were laid to the side and he saw his health decline without worrying about it. Sugars recognized the need for change.
A firm believer that your business should give you more life, he reworked his business to give him the things that he wanted. Taking the Australian mentality that life is about lifestyle rather than work, he has found himself moving into his late 40s seeking out a healthier lifestyle and finding the fun moments in life.
The biggest perks of the business he has created is the freedom of travel that is supported by the business. ActionCOACH runs conferences all over the world and this allows him to pick and choose where he wants to go. Actually, he lets his wife pick the locations and they bring the kids along so that they can experience the world.
In the end, after decades in business, Sugars knows that his success is not his alone. While he may have built the company from the ground up, many key individuals have helped them along their journey. From CEOs to partners, his team have done things that he never thought were possible:
“Every single member on the team that has broken new ground has been amazing help for us," Sugars said. "One of our partners broke records of speeds of growth for his business up in Indonesia and you sit there and go ‘Dang, Humphrey crushed it.’ So many people have done the four-minute mile since because he crushed it.”
Question and answer
GuruFocus: Would you sell the business?
Sugars: Yes. The business is for sale. That is what a business is. It is a saleable item. Now it would have to be someone who could continue my vision because this business is different. My commercial cleaning business if someone came along? I just sold my property management company because it was the right price. I am not sitting there going this is my baby, this is my vision, this is my life’s work. I am saying this is a great business and someone is offering the right price. Yep. Done. Sold. For ActionCOACH, it would have to be different. It would have to be someone that wanted to continue my vision and continue the work that we do. Continue to make it a reality that we help business owners everyday.
GuruFocus: Where do you look for inspiration?
Sugars: I am a permanent reader. If you get in my car, my phone will plug in and it will play a new audiobook. I am pretty sure I am one of Audible’s best customers. Prior to that, I was just a straight reader. I always go back to one of the earliest ones. When I was 16 years old, I won the local Rotary Youth Leadership Award. I think I won that because I was good at debate class and you had to get up and present why you should win the award.
Interestingly enough, two of us won. Me and my best friend Glen. He was the first speaker on our debate team and I was the third speaker on our debate team. The two of us won it. They normally only gave it to one person, but they could not decide. They sent us away for a weeklong training on how to be successful and how to be a leader. At 16 years of age that was phenomenal, but it led me to a seminar by Jim Rohn. E. James Rohn. I was 16 years old and Mr. Rohn said three things that day that changed the course of my life.
He said firstly, never wish that your life were easier, wish that you were better. I translate that to business. Never wish that business were easier, wish that you were better. Never wish sales were easier, wish you were better at sales. That sort of thing. He backed it up with the second one when he said work harder on yourself than you do on your job. Keep working on you. Often I am asked what is your biggest success. My biggest success is me. Who I have become is very important. As a businessman, I have become such a better businessman than I ever was. Business does not get easier, you have to get better at business.
I ran down to Mr. Rohn after that seminar and I got him to sign my notes. I was 16 years old and I was lucky enough at to be one of the opening acts for Mr. Rohn in front of 5,000 people in Sydney. I got to meet him in the green room in the back and I showed him my notes from when I was 16. He flicked through them and said, “These are very good notes, you should call me Jim,” and I said, "Yes, Mr. Rohn.” He had earned that privilege of being called mister, but he said something when I ran down to him. He said, “Son, if you want to be a success, read a book a week for the rest of your life.”
GuruFocus: What are you most grateful for at this point in your life?
Sugars: Family. Friends. People. The world works pretty simple. It is people, money, things. People come first. Money comes second. Things come third. If you mess up the bottom two, you end up looking good going nowhere. You are fully in debt and you look great. You are driving the latest car, but you got no money. So money has to come ahead of things. Cash in the bank is far more valuable than the latest iPhone. Money invested is far more greater. But people have to come before money. If you mess that one up, you lose relationships. If you lose relationships, people don’t want to do business with you. I am lucky to still have people that I have been doing business with for 20 or 30 years from when I first started. One of the first people I ever did business with, Stan Jordan, is still a great friend of mine. We have done business together for many, many years. I love that fact. People, money, things. It is a pretty simple one.
Sugars’ advice for entrepreneurs
Be in the business:
Sugars’ number one piece of advice is that you put yourself in the industry. Go out and find a job within the industry so that you can learn as much as you can. Gain the experience that you need to truly be an expert in the field. You have no reason to try and start in the industry blind. Utilize all of your resources so that you can know as much as possible before you try and start something. If you want to go and buy a business, learn how to do that from someone who has done it before. If you are willing to invest $200,000, invest a couple thousand first to take a masterclass from an expert.
Buy if you can, start if you must:
In Sugars’ opinion, it is much better to go and buy a business if possible. He believes you should go out and find a business that is doing OK in its field, but is run poorly. Find something that is not performing because it is run badly. When you buy this business, you can step in and quickly turn things around to find success. It will save you time to salvage a business rather than start one from scratch. At the same time, the costs will be much lower. You can utilize existing relationships and infrastructure to your advantage. Before anything, though, do your due diligence and learn what to look for.
Set big goals:
Sugars’ final point is to set goal that are way bigger than anything you can hope to accomplish in your current state. Make it be impossible and let people tell you that it is. This is going to give you something to grow into. These goals will guide your growth over time so that you can become better at the business. Without these types of goals, you are simply making a list of things to do. Reach for the stars and learn to be the person that can make it.
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