Succession plans as Jim’s Group founder David Penman turns 70
Australia’s backyard millionaire David ‘Jim’ Penman is viewed by some as a polarising character, by others as a business hero. Now he wants to take his Jim’s Group further into medicine and health.
David “Jim” Penman will celebrate his 70th birthday in May.
The man whose famous smiling bearded caricature – complete with hard-yakka hat – is splashed across the thousands of vans and trucks of his famed Jim’s Group in Australia and in three countries abroad, says he can’t believe how good his health is.
But it hasn’t always been this way.
“I had a problem many years ago with fits, I would lose my memory and sometimes even collapse. It was very worrying. My mind would go blank. Originally, they thought it was something like transient global amnesia, because I would forget everything that happened, briefly, in the last 24 hours,” he says.
He saw many doctors and specialists, but none were able to diagnose his condition.
“Then I started doing some reading myself. One thing I recognised is that cold water on the head can trigger these things. I used to and still have cold showers most mornings, but I used to put my head directly under the cold water in the middle of winter. As soon as I stopped doing that, it all stopped. So I went to see these really, really specialised people, but nobody ever asked about the triggers,” he says.
Penman is a big proponent of the Medicare universal healthcare system in Australia but believes his experience showed him it is, as he puts it, “too superficial”, leading doctors to conduct shorter and simpler consultations with bad outcomes for patients.
It is one of the reasons why he now wants to take his Jim’s Group, one of the largest franchise groups in Australia offering more than 55 different services operated by 4000 franchisees and attracting 35,000 customers every day, further into health.
Physiotherapy and optometry services are in his thinking, as is a Jim’s Doctor service. Three years ago Jim’s expanded into personal training, where trainers visit clients with mobile gyms.
“Health is interesting. I want to focus on how to stop people getting sick in the first place,” he says.
Expansion plans
After starting as the Jim’s Mowing franchise in 1989, Jim’s Group now offers services such as cleaning, removals, pool care, dog grooming, traffic control, computer services, pest control, painting and locksmiths. Laundry started last year, and has 23 franchisees.
The group is also about to start a scratch and dent repair service for cars.
The Jim’s Group empire is run from the Foothills Conference Centre – a former Swinburne University campus, a two-minute walk from the front door of Penman’s home – nestled in bushland on a 9-hectare property at Mooroolbark, 31km east of Melbourne.
This weekend the property will host Jim’s annual family and trade day, the first for two years because of Covid, themed around Jim’s Group’s commitment to going green and incorporating more environmentally friendly technology and practices into its day-to-day operations.
International brands such as Milwaukee, Mikita, Dulux Construction Solutions, LDV, Renault, EGO, Ecoteq, MeanGreen and Pellenc will be offering incentives and discounts to help Jim’s franchisees use green technology in their work. More than 2000 people are expected to attend.
But Penman has bigger ambitions for the business beyond its move into health and going green.
He wants to take Jim’s into North America and Europe and over the next 12 months is likely to seek an external investor to sink $100m into the Jim’s Group parent company to supercharge its growth. Jim’s is already in New Zealand, the UK and Canada.
He had a similar dream a decade ago when he made an unsuccessful bid for $10m in funding for expansion, including a float on the ASX that never happened.
This time he believes the group’s sophisticated franchise management softwear systems will make it more match-fit for external investment and international growth.
Jim’s Group in Australia grew revenues by 10 per cent last year to more than $500m despite the pandemic, when Penman was a vocal opponent of the Andrews government’s lockdowns in Victoria.
Now he says the booming demand for home services means over 40 per cent of leads for services are being unmet because Jim’s Group doesn’t have enough franchisees. By his count 90,000 leads this year remain outstanding.
So he is about to launch a Registered Training Organisation based at Mooroolbark to provide a fresh pipeline of skilled workers for his franchisees.
“We have a big advantage over TAFEs in that the people teaching will be people in the field, running their own business. I think we can actually do extraordinary things,” he says.
Courting controversy
Penman’s story was first fully documented three years ago in his biography by novelist Catherine Moolenschot, titled The Surprising Story of Jim Penman, Australia’s Backyard Millionaire.
The warts-and-all book explained how Penman turned a few mowing rounds in Melbourne in the late 1980s into a nationwide corporate juggernaut.
But in it Penman spoke of his “profoundly flawed” life and Moolenschot wrote of his “temper and unorthodox communication style”, and some of his business decisions that “put many off side” over the years.
These included his estranged sister Gill Moxham, whom he sacked from the business in 2011. She claimed three years ago that Penman’s move had left her “poverty stricken” and while her brother feels sad about their falling out, he doesn’t regret his decision.
“You can’t keep someone on just because they are family if they’re not doing the job because it demoralises every other staff member. You can’t just give someone a job, they have to deserve it,” he reiterates resolutely.
In 2010, Jim’s Group’s master franchisors – who effectively run the divisions or are responsible for regions within those divisions – also held a “referendum” demanding Penman stand down because of concerns with his leadership style, alleged breaches of contract, and steep fee hikes.
He eventually reached agreement on the fee and master franchise issues, but not before the dispute made national headlines.
Penman has been married four times and has 11 children. He has been with his fourth wife, Li, for nearly two decades and she is the mother of his four youngest kids.
Asked if he wants the children to succeed him in the business, Penman firstly declares his deep concern that any potential future corporate owner of the business could “destroy it” by ignoring long term thinking in the pursuit of short term profits.
“You could probably double or triple your short-term profit, if you really did it in a certain way, but it would destroy it and it would destroy the franchisees that are my people, my tribe. So my biggest concern is that whoever takes over will just go for short term money. So I’m hoping it will be possible for some of my children to take over.
Succession planning
“My daughter, Jasmine, she’s a wonderful young lady. I’m hoping that one day she might be somebody who could do it. The main reason for that is Jasmine is not just capable, she’s also very ethical. She would not allow franchisees to be treated like that.”
In addition to being estranged from his sister, Penman doesn’t speak to three of his older children, which pains him greatly.
“That is their choice,” he says.
“I’ve got a complicated history. When you get divorced, even though it wasn’t really my choice to get divorced, it causes strains in various ways. Divorce is a terrible thing. I always thought I’d be married for life. So when it does happen it hurts kids.”
Asked if there is a motto for life he has learned from the tough times, he replies instantly, with a wry smile: “Be really careful who you get married to.”
Outside work, Penman’s treasured pastime is scientific research, particularly studies on mental illness.
He has authored bio-history titles and co-authored numerous papers in journals, although his early writings were criticised for being too extreme and “wild” for serious scientific consideration.
“The research project I am working on now is actually really important,” he says of the project dealing with mental illness, depression and anxiety to which he donates $1m each year, run with RMIT and The Florey Institute of Neuroscience and Mental Health.
“I’d like to really expand that. I hope as Jim’s Group grows, that will happen. My will, such as it is, is basically going to donate Jim’s Group to the Research Foundation. The children get a little bit of help with buying houses, but that’s it. They are never going to live off the business. I don’t believe in inherited wealth. It’s bad for kids and bad for society.”
Despite his wealth, Penman still drives an old Mitsubishi Outlander which hasn’t been washed for months. He doesn’t take overseas trips or own expensive clothes and prefers a meal at the local takeaway over fine dining.
He is now an evangelical Christian after being a militant agnostic until his conversion at 28.
His passion for religion has made him more conscious of his personal failings, but immensely proud of what he does do well.
“I’m very introverted and was extremely introverted when I was growing up. I don’t read social clues very well. Everybody has their strengths and weaknesses, I have very considerable strengths. I’m intensely creative. Even at 69, my mind is full of new ideas all the time, some of which are actually quite good, most of which are complete crap, of course. I’m very idealistic, very passionate, I care deeply about the people I deal with – my franchisees and my family and people like that,” he says.
“But there’s other sides to me that are not so positive. I get impatient easily. I really have had to control my temper. I can easily say things that I regret and sometimes I just don’t notice the way people are reacting to me.
“One of the most important virtues that anybody can have in business and in life is a degree of humility. If you look upon yourself as being a perfect person, then you’re not going to take action against the things that are wrong with you. Whereas I am struggling to be a better person, to be a kinder person, to be more thoughtful. It’s a lifelong struggle.”
Penman still takes a cold shower most mornings, always after a vigorous session of 30 minutes of treadmill running, then rowing and weight training.
He says he will never retire from the business he founded.
“I will die in harness, unless I go senile. Not a year goes by when my role doesn’t change in any way and I love that,’’ he says.
Australia’s Backyard Millionaire might be viewed by some as a polarising character, by others as a hero. He detests the latter tag.
“I wouldn’t like to be in a situation where people look up at me and say, ‘Oh, that guy’s so amazing. I couldn’t possibly do anything like that’,” he says.
“I’d rather they look at me and say, ‘Well, you know, okay, he’s achieved good things. He’s got all these faults and failings and weaknesses. Now, if Jim can do that, surely I can do it’.”
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