It is fair to assume that when Rory Vassallo dropped out of Kwinana High School at 14 years of age, nobody thought he was going to make $65 million by the time he turned 30.

His teachers suggested he leave midway through Year 10 — but not because he was a bad kid. It was simply because he had absolutely no interest in anything they had to say.

They told his mother not to worry about him quitting though, assuring her he would turn out “ok”.

“I wasn’t interested in class because I just don’t learn like that, ” Mr Vassallo says. “I learn by standing back, watching and doing.”

It is a succinct summary of a business philosophy that helped him build an empire of 22 childcare centres, which he sold to G8 Education last year, five months after his 30th birthday.

He won’t confirm rumours of the $65 million sale price, but agreed to share his business insights in the hope it would inspire others.

Mr Vassallo started his working life on the tools at a welding company before a short stint in the rag trade.

At 17 he worked in administration at a car yard, and in the rough and tumble of the car industry learnt what he counts as the first of several key lessons: pick the fights you think are worth winning.

Another early milestone was buying a house, which he did the week he turned 18 and which later provided the equity needed for a business loan.

But the pivotal point came by chance when he was 20 and attending the office Christmas party at a childcare centre where his then girlfriend, Renee, worked.

He found himself seated next to the centre’s owner and was impressed by her description of the cash flow-positive industry with a strong set of regulations.

He did some research, borrowed $100,000, and bought a childcare centre in Applecross.

“The first time I entered a childcare centre, I walked out the owner, ” he remembers.

Mr Vassallo, whose parents had never borrowed money from a bank, was initially nervous about having a debt and he poured every cent he had into paying it off within six months. He came to realise that debt is good because it helps make you money, but says it should be repaid as quickly as possible.

His next centre in Kwinana was a struggle, with client parents regularly failing to pay bills and treating the centre as occasional babysitters. He took the time to educate the community about why they should commit to the centre, explaining it was good value for money because it enhanced their children’s development.

He also sacked the staff, bar one, because they did not commit to his high standards of service.

“I learned early on that if you’ve got happy staff, you’ve got happy kids, ” Mr Vassallo says.

“If you’ve got happy kids, you’ve got happy parents. If you’ve got happy parents, you’ve got a happy pocket. If you’ve got the staffing wrong, you’ve got it all wrong.”

He says retaining the best staff did not necessarily require higher pay but enabling them to focus on their job without distraction was crucial.

For him, this included ensuring the playground equipment was safe, the art supplies in full stock and the nappy wipes of good quality.

“You have to give staff what they want, and what they want is to be able to do their job properly, ” he says.

As the years rolled on he and Renee, now married, developed a reputation for providing top child care and were asked to manage several other centres.

They agreed to the requests even though it involved relatively little profit because it gave them the chance to hone their management skills, ultimately helping to boost their own business.

“The experience gave us intangible profits, ” he says.

Mr Vassallo did not limit his keen sense of observation to his own sector but would also study the fastfood industry, among others, for signs how to effectively manage and organise.

He would deliberately choose the longest queue at McDonald’s to allow himself enough time to figure out their system before he got to the counter.

“Knowledge can come from the weirdest of places, ” he says.

One of his observations was that successful companies have their own culture.

He says a strong and positive company culture can be created by seeking staff and customer feedback and using it to address any problems. To help in this end, Mr Vassallo started a weekly one-minute written survey of staff.

He says a strong culture helped foster a sense of community, ensuring support for when things went wrong, as they inevitably would at some point.

Mr Vassallo says building good relationships with suppliers was also important, because loyalty and communication helped deliver reliable service.

He had used almost all the same tradesmen and suppliers in his first centre as in his last.

“Whether it’s your landlord or the guy who sells you detergent, relationships are big, ” he says.


• Pick the fights you think are worth winning.

• Debt is good because it helps make you money, but it should be repaid as quickly as possible.

• If you’ve got the staffing wrong, you’ve got it all wrong.

• Knowledge can come from the weirdest of places.

• Successful companies have their own culture.

• Relationships are big.

• Back yourself 100 per cent.


© The West Australian