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.

@michaelkerr

@kerrcapital

www.linkedin.com/linkedin.com/smallbusinessbanter

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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

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