Spark Magazine Issue 1, 1 June 2015 by Spark Magazine #FuelForBusiness

THE FUEL FOR BUSINESS

SPARK

Magazine

Issue No.1 June 2015

Trans - Tasman, business class with Virgin Australia

BUSINESS EXIT PLANS do you need one?

NEW RESIDENTIAL PROPERTY as an investment class

INSURANCE WITHOUT A BROKER are you covered?

SPARK MAGAZINE

Contents

NEW RESIDENTIAL PROPERTY AS AN INVESTMENT CLASS Reasons investors favour new over old.

OPINION: BUSINESS PREMISES OWN VS. RENT Advantages and disadvantages of both.

PURCHASING PROPERTY THROUGH A SUPER FUNDS When does it make sense?

THOSE JOURNALISTS ARE TAKING OVER Why words are more important then ever.

YOU DON’T KNOW WHAT YOU DON’T KNOW The dangers of purchasing business insurance on-line without a broker.

THE ACRONYMS OF CHANGE Decoding marketing speak.

BUILD A PEAK PERFORMING ORGANISATION One conversation at a time.

GETTING RID OF THE GLASS CEILING Two executive interviews.

TRANSITION AND EXIT PLANNING What’s all the fuss about?

CIRRUS AUSTRALIS Super Fast, Super Safe, Super Business Tool.

TRANS-TASMAN BUSINESS CLASS WITH VIRGIN AUSTRALIA Is the new service across the ditch value for money?

MELBOURNE BUS VS SYDNEY TRAIN One wins hands down.

The articles in Spark Magazine are of a general in nature only. Always seek independent financial, investment, tax and legal advice.

ISSUE NO.1 JUNE 2015

Welcome to Spark Magazine. This month’s issue has three main themes. The first is property - so dear to business owners’ hearts. The second is people, with features on how to build a peak performing organisation and breaking the glass ceiling. Thirdly there is an aviation theme with reviews of: Virgin Australia’s new trans-Tasman business class offering; the airport transport services offered by Melbourne and Sydney; and perhaps the ultimate SME business tool, the Cirrus SR22 Australis personal aircraft. As readers you are our guiding hand, so do write and let us know what you like, what you don’t, and what you would like to see featured in the magazine. If you have expertise or a story you want to share, we welcome letters or contributions from readers. Let us know your story, angle and why you think it will appeal to Spark Magazine readers. If we agree we will send you a commission. The Spark Magazine team are planning to bring you a wide range of interesting and value adding stories in the next issue including what changes to the employee share ownership rules mean for innovative start ups, expert advice about government grants, another article in our people series, and more. As part of our commitment to encourage good business stories, and new writers, later this year we will publish articles by graduates and articles about new innovative businesses and their entrepreneurs driving the economy and inspiring others.

Spark Magazine is “The fuel for business”. The target audience is business people, with an interest in innovation, technology and new ideas. We provide the ideas, motivation, and inspiration for success. Published online, monthly, February to December.

MASTHEAD SPARK MAGAZINE Pow Wow Pty Ltd Level 7, 14 Martin Place, Sydney, NSW 2000, Australia www.sparkmag.com.au EDITORIAL Paul M Southwick paul@sparkmag.com.au (+61) 424 70 40 10 ADVERTISING Melissa Brant melissa@sparkmag.com.au (+61) 458 26 09 87 CREATIVE DESIGN MAP2 Pty Ltd katie@map2.co

PAUL M SOUTHWICK CEO and Editor paul@sparkmag.com.au

The information in Spark Magazine is of a general nature only and should not be relied upon for individual circumstances. In all cases take independent and professional investment, financial, tax and legal advice. Spark Magazine and all persons and entities associated therewith accept no responsibilities for loss or damage related to any inaccuracies, errors, or omissions in the magazine, or reliance on anything in the magazine. The views expressed in the magazine are those of the authors and do not imply endorsement by Spark Magazine, its controlling entity or associated persons. Similarly placement of an advertisement in the magazine does not imply endorsement by Spark Magazine its controlling entity or associated persons. © 2015 by Pow Wow Pty Ltd. All Rights Reserved. Reproduction in whole or in part without permission is prohibited.

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by OLIVER HUME RESEARCH

New Residential Property as an Investment Class A

rguably property has made more people wealthy than shares and it can significantly affect the wealth of small investors. There is the potential for growth, and even more beneficially for the investor, growth with the bankâ&#x20AC;&#x2122;s money. Researched backed property guidance provides the necessary framework which allows financial planners and investment advisors to provide sound investment advice in this asset class. It enables residential property to form part of a well-balanced and diversified investment portfolio.

The major reasons why residential property as an investment makes sense include: 1. ASSET CLASS PERFORMANCE Property is a secure growth asset that provides increasing yields over time. Australian Residential Property has outperformed all other assets classes, including ASX listed shares, international shares, cash and listed property investments over the last 10 years.

2. COUNTER CYCLICAL CHARACTERISTICS Residential property values demonstrate a low correlation when compared with the value movements of other investment classes.

3. LEVERAGE Banks view property as a more secure investment allowing investors to use debt and equity to leverage their investment portfolio. This leads to favourable loan-to-valuation ratios and, unlike other growth assets, very few margin call demands on fully serviced loans.

4. LOW VOLATILITY Property is less volatile than other growth assets. Owner-occupiers, who are less likely to sell during times of economic uncertainty, dominate the Australian property market. This stability supports the value of investment property.

5. LIQUIDITY Whilst less liquid than cash and shares, the sale and purchase of property is nonetheless transacted in a transparent and fluid market.

6. TAXATION Direct property investment offers investors tax advantage through gearing. Depreciation, rates, body corporate fees and other outgoings are deductible, whilst capital gains tax, after 1 year of ownership, is calculated at a significant discount.

7. SOUND INVESTMENT FUNDAMENTALS The underlying fundamentals for residential property investment in Australia remain strong. The population is forecast to grow significantly in the outlook period and at rates faster than new dwelling construction. The current and forecast imbalance between the supply and demand for residential property provides a strong case for future capital gains and growth in rental income.

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WHY INVEST IN NEW PROPERTY: Here are regarding some of the reasons an investor might favour new over existing property. 1. RETURNS New property can generate greater investment returns through long-term capital growth and higher rental returns than a corresponding investment in older property. 2. AFFORDABILITY New housing estates, new townhouse developments and new apartments can be more affordable during the early phase of the sales and development cycle. As the development matures, values and prices generally increase. Early investors within these developments therefore can enjoy greater benefit in the form of value appreciation. 3. VALUE ASSESSMENT Market data for new property sales and pricing is more comparable than market data for older housing as, in the case of new housing, many of the factors that influence values, such as size, style, age, condition, build quality etc are similar. An assessment of recent sales and current pricing information for new property therefore provides a clearer and more transparent indication of fair market value. 4. TAX ADVANTAGE New properties offer greater tax advantages in the form of depreciation allowances and lower transaction costs in the calculation of State based stamp duty when purchased as house and land, townhouse or apartments purchased off the plan. 5. TENANCY Tenants are attracted to new housing because many new developments offer contemporary lifestyle facilities, are built to modern design and planning standards and are positioned to take advantage of existing or planned community infrastructure. 6. REPAIRS AND MAINTENANCE New properties typically have lower outgoings in the form of repairs and maintenance.

USING A RESEARCH APPROACH A good way of identifying those sectors of the residential property market that provide the best opportunity for capital growth and rental income is through detailed research and proper due diligence. Using a professional, with a researchbased approach to identify and recommend from among only the most qualified direct residential property investments can pay dividends. Researched informed property guidance provides data in a format for investors to guide their investment decisions. A financial or investment adviser or direct investor can be confident that they are providing professional, independent advice of proven value. Research, analysis and evaluation starts at the national level and tiers down to individual states, capital city or major regional markets, their subsectors, (inner CBD, middle ring and outer suburb rings) to the suburb level and individual property level in an increasingly targeted approach.

WHAT MAKES A FUNDAMENTALLY SOUND PROPERTY RESEARCH STRUCTURE? Whilst population, construction levels, interest rates, employment and other economic influences shape demand and supply at a national, state, regional and suburban level these forces alone do not determine the long term success of direct property investment. In fact it is the combination of economic conditions, location, lifestyle, amenity and the attributes of an individual property or development that determine why certain properties experience greater gains in value and higher rental returns over time. Property guidance or investment advice should have a comprehensive and rigorous due diligence process for the assessment and evaluation of those micro forces that determine the prospects for growth at the individual project level.

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Modern CDB apartments

A SOUND DUE DILIGENCE PROCESS INCLUDES: 1. SUBURB ANALYSIS Review and evaluation of: >> Location >> Surrounding amenities >> Actual or planned infrastructure >> New or planned industry and employment opportunities >> Rental market, vacancy rates >> Construction levels 2. PROPERTY BENCHMARKING AND ANALYSIS Review and evaluation of: >> Project developer >> Builder performance >> Project amenity (pool, golf course, gym,) >> Price >> Outgoings (body corporate, rates and government taxes)

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Securing the right investment property is the most crucial aspect of the investment process. Working with an advisor that has an independent relationship with developers, builders, real estate agencies and trade contacts will provide investors with exclusive access to a selection of some of the most sought after investment properties. Identifying advisors that have an industry network and reputation provides investors with access to properties and projects long before they become available to the general public using market knowledge, size and strength of relationships to indentify investment opportunities that individual purchasers could not access on their own. 4. PROPERTY INVESTMENT REVIEW

>> Past and current project sales activity >> Potential gross rentals (income) and

future cash flow analysis >> Project positioning >> Competitor analysis

Property guidance should only recommend those projects that satisfy a comprehensive research and due diligence criteria. 3. SOURCING RESIDENTIAL INVESTMENT PROPERTIES Individual investment properties should be identified and sourced through research, from industry contacts and through local knowledge and only with an advisory organisation that is credentialed and qualified to provide detailed information.

It is paramount investors select advisors that include suitably qualified and experienced individuals from real estate, property research and the housing industry.

The role of an investment advisor is to: >> Review economic research to confirm that the various property markets demonstrate an environment suitable for investment; >> Make recommendations as to states, regions and suburb locations that warrant further investigation; and >> Accept or reject those properties considered for investment recommendations.

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Financial planners, investment advisors and their clients have the comfort of knowing only those properties which satisfy a comprehensive research, evaluation and due diligence criteria, are accepted by a property investment review committee for investment recommendation. 5. ONGOING SUPPORT Sound property guidance should be provided with ongoing support and guidance to financial planners, investment advisers and their clients for the life of the property investment. 6. PRE-PURCHASE SUPPORT Starting with project evaluation and recommendation, a property report should provide the complete information advisers and their clients require in order to make an informed investment decision. 7. PRE-PURCHASE SUPPORT Property guidance should also assist with signing of documentation, securing of appropriate finance facilities and recommending of legal services and associated legal requirements. 8. POST PURCHASE SUPPORT - LAND SETTLEMENT PRE CONSTRUCTION In the instance of a house and land transaction, the land component of the investment is often settled prior to the commencement of housing construction. There should be coordination of the settlement of land to ensure that all parties satisfy the relevant conditions for settlement. 9. POST PURCHASE SUPPORT CONSTRUCTION PHASE Where investors purchase an off the plan apartment or house and land investment, advisors should provide regular status updates and advise of the timing of any progress payments that may be due during the various stages of construction (house and land) to ensure that the investorâ&#x20AC;&#x2122;s contractual obligations and cash flow considerations are achieved.

10. POST PURCHASE SUPPORT SETTLEMENT PHASE It is important that investors are provided with assistance for final settlement of the property. When settlement is due, pre settlement final inspections are conducted using reputable and independent building inspectors to ensure that any building defects are identified and resolved with the builder or developer prior to settlement. 11. POST PURCHASE SUPPORT â&#x20AC;&#x201C; PROPERTY MANAGEMENT Once ready for tenancy, there needs to be a comprehensive property management service encompassing finding a tenant for the building, organising of insurances (landlord and building), formalising lease agreements, finalisation of tax depreciation schedules, rental collections, property inspections, condition reporting, maintenance and financial reporting. 12. POST PURCHASE SUPPORT - MARKET APPRAISAL Provision for a bi-annual market appraisal to financial planners for each investment property is required. Whilst not a formal valuation, the market appraisal provides an indication of value movements. The support and guidance offered during the investment acquisition phase, combined with professional property management provides assurance that investment returns are maximized throughout all phases of the property investment cycle. Note: This article is general in nature only. Always seek independent financial, investment, tax and legal advice. ABOUT OLIVER HUME Oliver Hume is a multi disciplined property group, with a research division that advises Government, RBA and leading developers throughout Australia. Contact: (03) 9669 5999 oliverhume@oliverhume.com.au

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The old and the new.

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Opinion:

Business Premises Own vs. Rent by PETER B SOUTHWICK THE DILEMMA

oth Australia and New Zealand are currently enjoying some of the lowest interest rates of my lifetime, making the cost of buying a property, in many instances, cheaper than renting. A dilemma which faces many business operators at some stage is: Should I buy the premises from which I operate or should I be content renting/leasing them? This article explores the advantages and disadvantages of both with a bias towards purchasing premises.

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MY STORY Like many others I started a small professional business from home - in 1995, with just me. Over the next four years it grew to the point where there were five of us – including two partners who had joined, both worked from their homes. My wife got fed up with clients coming to our house, and an employee who was not overly considerate of the fact that her place of work was our home. I was given a notice to vacate and find somewhere else to operate. Given that the business had grown the funds were there to lease some offices premises. We did so at a rent of around A$22,000 pa for 120m2, entering into a five year lease.

After three years our business had grown to the point where we had a dozen staff and had outgrown our office space. We were faced with the question, which is the subject of this article, do we continue to rent or do we buy something? Given that our business was in the property arena we all thought it would be good to buy something. As luck would have it the perfect premises were available to us, a 245 square metre strata titled office, with spectacular city views of Adelaide, and what turned out to be a A$0.4m oak fit out with beautiful built in desks, offices and boardroom. Like many small business owners, we did not have a lot of spare cash. The premises were available for A$0.7m – it was May 2000. We borrowed 100% of the purchase price using the equity we had in our homes. (Banks will usually lend around 65% of the value of a commercial purchase – so in this instance, each of the three partners had to find $78,166 of equity in their homes to do the deal. We charged the company a full but fair market rent, which completely paid the mortgage and outgoings cost of the premises. By keeping the rent “full” we were able to offset the company’s net profit a little and effectively have the business buy the premises for us. The business then occupied the premises for ten years. I was always proud of the premises and on more than one occasion I think they were a factor in gaining substantial new clients. The high quality fit out, views, and the elegance of the building and premises themselves reflected how we saw our business. Potential clients saw and appreciated the stability this gave us. Needless to say, we were never afraid to say that we owned our own premises. Since retiring, my former company have shifted out of the premises to a larger space. My two former business partners and I still own the premises. The market value of the premises today, is around A$1.2million and the rent is A$110,000 pa. The net profit that the premises generate is now around A$50,000 pa which is divided between the original three partners. We are starting to reduce the sum we owe the bank and have little intention of ever selling the building.

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ADVANTAGES Here are what I see as the advantages and disadvantages of owning your own premises/ building: 1. CONTROL OF YOUR OWN DESTINY I have heard many stories of rapacious landlords, increasing rents at every opportunity or of unscrupulous landlords evicting tenants with a view to stealing the goodwill they have built up – particularly in retail premises. Owning your business premises means you never ever have to deal with a landlord again. You will never be evicted and you can get on with what you are good at.

Location, location, location

2. FIXING FUTURE COSTS In our example above, by purchasing the premises we fixed our cost of occupancy for all time based upon the purchase price. If we were still there we could theoretically be paying a rent based upon the values of the year 2000 - A$0.7m vs. its value today A$1.2 million. Whilst we increased the rent to the business, we did have the opportunity to control this cost, had we so chosen, especially in tough times. 3. TAXATION BENEFITS As noted above, in owning our premises we were able to charge a rent which was “full” but fair, thus reducing our business’ taxable income. Secondly, we were able to have the A$0.4m oak fit out assessed by a Quantify Surveyor, and claim a substantial depreciation allowance each and every year. Thirdly, we have benefited from a tax free capital gain for the 15 years we have owned the building. Our gain to date exceeds A$0.4. Yes, Capital Gains Tax is payable in Australia – but only if we sell. This tax is a strong disincentive for us to sell and one we can control. Finally, we were able to claim a tax deduction on the interest paid on the personal loans we had taken out on our houses to fund our 35% of equity required by the bank to buy the premises.

4. CREATING AN INCOME FOR LIFE Once you are finished with or sell your business you can continue to own the property and lease it back to the business if its operation continues there, or as in our case above, lease the premises to someone else. This has the ability to create passive income for life. 5. PUT YOUR OWN SELF- MANAGED SUPERANNUATION FUND TO WORK Australia allows Self- Managed Superannuation Funds to own premises which are then leased to another entity – which you may control. This idea is a topic on its own but the laws around superannuation seem to be bending to assist individuals in owning their own business premises. This makes funding the purchase easier and the laws now allow Self-Managed Superannuation Funds to borrow to buy property. 6. FEEL GOOD FACTOR There is a certain pleasure in operating a business from your own premises. It is a wonderful thing to sit back and see them increase in value. For my former partners and me, we enjoy the fact that our former premises keeps us in contact and gives a good reason to get together and reminisce about good times past.

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DISADVANTAGES 1. INFLEXIBILITY OF THE PROPERTY People often say to me the reason that they don’t want to buy their premises is that if the business outgrows the property they are left holding an asset that no one may want. If you are in a decent sized city there is usually a buyer if you want to sell or lease. If your company is a fast growing entity this may be a valid reason for not buying your own premises. My suggestions would be to consider buying and retain each property as you grow. 2. UNCERTAINTY ABOUT INTEREST RATES Some people are afraid that if interest rates rise the business may not be able to pay a rent to keep pace with rising interest rates. One way to counter this is to fix your interest rate. From my experience the first three years of owning a property are the hardest – at present you can fix your interest rate at around 5.5% on commercial property for a three year period. This enables you to counter interest rate risk. 3. BUSINESS FAILURE Some people fear that buying a property is a long-term commitment whereas their business may not be. My response is simply that you should not buy until you have a sound (ish) business. In my example we waited five years until we felt comfortable to purchase. 4.OWNING PROPERTY IS NOT OUR CORE BUSINESS If this were the case almost no businesses would own their own premises. Someone has to own them and I argue that it should be you. Some might argue that the core business of McDonalds is making hamburgers. When one studies the company and its history, I would argue that their core business is owning real estate. ABOUT THE AUTHOR Peter has spent his life in the property industry, including 30 years as a property valuer in Australia and New Zealand. He is an active investor and has a large portfolio of property in Australia and NZ. He is retired but continues to collect rent, buy and sell, and is involved in residential developments in Australia and NZ.

Real estate investment can provide a great capital base and a basis for borrowing. CONCLUSION To conclude, the case for buying your own property from which to operate your business is strong, particularly for a well-established venture. Smart business people recognise this and find a way to do it. As a friend of mine says, “There is not a shortage of money, just a shortage of ideas on how to get it”. This viewpoint very much applies to the purchase of your own premises. Note: This article is general in nature only. Always seek independent financial, investment, tax and legal advice.

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Purchasing Property Through a Super Fund WHEN DOES IT MAKE SENSE? by MYLES THORNTON

INTRODUCTION

elf-managed super funds are becoming increasingly popular, especially for self employed business people, and make up a large portion of the overall superannuation pie. With property there are many things to consider: location, price point, yield, maintenance costs, how much to borrow, negative v positive gearing, etc. It is important to separate the considerations around purchasing property, and the considerations of using a self-managed super fund (“SMSF”). This article addresses the superannuation (“super”) considerations rather than the property parts.

THE PROCESS The first step when purchasing property through super is to set up a self-managed super fund. This is a superannuation trust. Like any trust the trustees are responsible for the decisions that are made within the trust. In a retail or industry super fund, there are a group of trustees who manage the superannuation on behalf of all the members. They are responsible for ensuring it is run correctly and compliantly. With a self-managed super fund, you are not only the member of the fund, you are also the trustee and are thus taking on that extra responsibility.

Eureka Tower, Melbourne’s tallest residential property.

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THE ATTRACTION Docklands residentials appartments.

This can be attractive, as the extra freedom of being your own trustee, means you can do things that are not available through other types of super funds. You can invest in almost anything that is a legitimate investment, so there is a huge range of choices, from shares, managed funds, alternative investments, private equity and this includes residential or commercial property. You can pool funds with up to three other people, so you often see a husband and wife pooling their funds together. You can borrow money to invest in different assets and you can choose whichever insurance company you believe is most appropriate for your circumstances.

OTHER FACTORS Considering the above it looks attractive to purchase property through super. Assuming we remain agnostic on the merits of property as an asset, there are still a range of other factors that need to be considered prior to jumping in. First, it is instructive to look at why this topic has received a lot of interest.

TAX ADVANTAGES

Property as an asset has been allowed to be purchased through superannuation for some time. However you could not borrow to invest in property, thus it was impractical for a lot of Australians.

Superannuation itself is an attractive environment to hold investment assets. There is a flat tax rate of 15% of any income. Thus dividends, interest on shares, and rental income are taxed at 15%. This is lower than most working Australians individual tax rates, and thus is a discount compared to holding assets in your own name. be quite a big disc

During the final years of the Howard government, rules were changed which allowed borrowing, but on a limited recourse basis. What this means is that the super fund can borrow money, but if the loan was in default, and the bank wished to get their money back, they couldnâ&#x20AC;&#x2122;t touch other assets of the super fund.

Even more attractively, once you move into your 60s, you can turn your superannuation into a pension. This means that any income from your investments may be tax free, and the same for any capital gains. Thus you could conceivably hold an investment property for 20 years, the rental income in retirement is tax free, and if you decided to sell it, any capital gains would be tax-free.

This is much more restrictive style of lending from a bankâ&#x20AC;&#x2122;s perspective than outside super, where the bank has recourse to your other assets, if there is a shortfall after repossession of a property. Thus banks were initially hesitant to lend through super, and indeed some banks still donâ&#x20AC;&#x2122;t. The ones that do, will require you put a minimum 20% deposit. This is much larger deposit than is necessary outside super.

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The terms of the loan are usually less attractive than a normal residential home loan - typically about 0.8% higher. Certain banks have conditions that they will attach prior to determining if they will lend, such as a minimum balance left over, no regional areas, no apartment blocks over a certain size, etc. They will also run conservative calculators as to what they will lend. An investor’s expectation as to what they can borrow can be quite different to the reality. Second, to abide by the limited recourse requirements a separate structure needs to be set up. The typical structure sets up a separate bare trust to hold the property, with the SMSF being the beneficial owner. The added complexity means it can be confusing, and increases the possibility of mistakes. Third, as the trustees of your new SMSF you are ultimately responsible for the running of the fund, and an uncompliant fund may be punished by the ATO with fines, or even turning the fund into an uncompliant fund, which is automatically taxed at the highest marginal rate. Thus you could effectively lose half your super. Fourth, when deciding what property to purchase, there are restrictions due to superannuation legislation. The property must be a single acquirable asset, thus no house and land packages, or purchasing a property across two titles. Further there are distinctions between, renovating, maintenance, and developing within superannuation. You can’t do some with borrowed funds, but can with cash, you can’t do some at all. This is an area where professional advice is crucial. Fifth, there are certain fixed costs, typically about $2k per annum. Thus a $20k super balance is not going to make sense, you realistically need to have more than $200k to invest. Even then you need to consider if there are sufficient contributions going into the account to service the loan, and satisfy the banks. You should consider whether your investment time horizon is sufficient to purchase an asset such as property.

CONCLUSION In summary a SMSF can offer a very attractive vehicle for holding your retirement funds. You can access many more investments, borrow money, tailor it to your needs and take control. However the consequences of being uncompliant are significant. Further you really need to be clear that the various negatives are outweighed by the positives in your particular circumstance. It is wise to get financial advice before jumping in to set one up. To misquote a famous Spiderman line, “With greater control, comes greater responsibility.” Note: This article is general in nature only. Always seek independent financial, investment, tax and legal advice.

ABOUT THE AUTHOR Myles Thornton has been working in the Financial Services industry for 12 years, with the past 7 of those being in Financial Planning. Myles has a Masters Degree in Commerce Financial Planning, and is a member of the Financial Planning Association and is a SPAA SMSF Specialist. Myles is the Self Managed Superannuation Fund (SMSF) expert at Ark Total Wealth and deals with a wide range of clients including wealth accumulators, business owners and preretirees.

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YOU’RE GOOD AT WHAT YOU DO, VERY GOOD, MAYBE EVEN THE BEST.

WHAT’S THE STORY? Any time and in any medium you need to tell your story in a clear, concise, appealing and professional manner

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BSI Comms is part of the same family as Spark Magazine and gives you access to some of the best journalists and business writers in Australia. For more information or to discuss your needs contact the editor: paul@sparkmag.com.au or (+61) 424 70 40 10

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Those

Journalists are taking over

by BELINDA SHARP

WORDS

ords are more important than ever.

In the age of Google, potential customers will often see your words before they see your products. The words on your website, newsletters and emails are crucial – get your tone of voice wrong and you may lose a customer for good. Your website might be modern, clean and beautiful, but if the words are vague or off putting, your customers won’t stick around.

JOURNALISTS

In the past, companies would pay thousands of dollars for their website design, logos and images, but didn’t always make the same investment in the copy.

Journalism has changed enormously over the last decade. Free content on the internet has had a devastating effect on paid for publications, forcing many to close or cut their staff to the bone.

Smarter businesses are increasingly realising that great words should be written by the professionals and are turning to those with journalism skills to do this for them.

New Beats, a study of Australian journalists made redundant since 2012, found that more than 1,500 have lost their jobs in this time. As a result, many talented journalists have been pushed out of the profession.

Journalists can do much more for you than copywriting. They can do your social media, edit your reports and get your stories in the press.

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TRANSFERABLE SKILLS

EXAMPLES

Journalists have transferrable skills that can work for any business. They are wordsmiths who know how to turn a boring paragraph into a great story. They have the ability to catch the reader’s attention and keep it.

Wheatbelt NRM, (www.wheatbeltnrm.org.au) a not-for-profit organisation that enables community on-ground environmental work, started working with journalists in 2008.

Journalists also make great PR officers because they have been on the other side and know what makes a good press release versus one that is just asking to be deleted. They understand how the media works, so using them can help your company spread its messages effectively.

“We realised we needed to move away from behaving and sounding like a government organisation,” says CEO Natarsha Woods. “When you have the scientists doing the writing it is hard to ‘cut the technical’ and really engage the wider community.”

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“Journalists know the systems so you can give the papers what they are looking for, and they are aware of things like the right time of the week to do a media release. Our stories always get picked up now. Journalists are also able to tell us when we are boring. What is important to me doesn’t necessarily make for good reading in the paper.” Dr Elizabeth Kington, Program Manager on Wheatbelt NRM’s Sustainable Communities team adds: “Journalists can present complex ideas simply – a real ‘art’ not many can do quickly. We will continue to use them as their services continue to build our business.” Kelly Thorburn, a trained journalist, is a communications officer at Wheatbelt NRM. “Journalists have the ability to take a story or report written by staff and tell it in plain English so that the public can understand it,” she says. “They can look at topical issues and find a unique angle to promote the organisation in a positive light. They can take a long winded article and edit it down into a short, sharp piece, and adapt a story for different audiences and mediums including eNews, newsletters, social media, annual report, and newspapers. “Journalists can also communicate with different teams within the organisation to work out which of their activities can translate into a newsworthy piece. And they can also edit and proof read professional reports and funding applications to ensure that they are easy to read and appropriate.” Antony Neeson, creative director of Sydney based non-traditional advertising and media agency - Habitat Media (www. wherebigideaslive.com.au), took on a journalist for the first time two years ago to help with proposal writing, internal marketing copy and social media management. “As we’re in a creative industry there’s a great need to articulate ideas well in words without simply regurgitating marketing industry speak,” he says. “Journalists have the ability to tell a story in words. It sounds simple, but writing a story well is quite difficult.

“Journalists have the ability to tell a story in words. It sounds simple, but writing a story well is quite difficult.” Whether it’s describing a successful campaign or communicating a target audience insight, someone with a professional writing background can adapt to the brief. Sometimes they can describe my own ideas better than I imagined it in the first place. A creative writer is a great resource for us which we will continue to use.” If you don’t need a full time journalist on your staff, you can use a freelancer. Many working journalists do some PR and copywriting too. “Journalists are generally very good, engaging writers,” says journalist Sarah Marsh who is now using her skills for business too. “I’ve done copywriting and PR since going freelance and I think clients really like journalists and those with journalism skills because we know how to pitch things right, and how to hit their target market. We have the ability to write compelling copy in any tone or voice they like, to cut through the fluff and get to the point. Being on the receiving end of terrible pitches and press releases for years gives you very useful insight into what not to do!” Judy Yorke is an international tutor for the Morris Journalism Academy, which offers online courses in freelance journalism in Australia and throughout the world. “I’ve noticed that students are increasingly taking the course to improve their writing skills at work, rather than because they actually want to be freelance journalists,” she says.

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“These are people who need to write blogs for their companies, or newsletters or press releases and who are aware that acquiring journalistic skills will help them with this. “The skills that we teach in the course – to write attention grabbing copy that’s clear, accurate, engaging and relevant – are skills that are hugely applicable to the workplace. If you can learn to write like a journalist, you can write brilliantly for business. “Journalists are skilled storytellers, who are used to presenting stories to the reader in the most interesting, powerful way. Storytelling is an important skill in the business world too – whether it’s a case study in a press release or the ‘about us’ page on your website.” Last year, Yorke qualified as a trainer and now goes into companies showing staff how to improve their writing using journalistic skills. “Many business people have to write every day, but they make mistakes like writing in very formal language, not thinking of who the reader is and not making the copy interesting or relevant,” she says. “Training them how to think like a journalist can hugely benefit their skills for business.”

“I’ve noticed that students are increasingly taking the course to improve their writing skills at work, rather than because they actually want to be freelance journalists.” ABOUT THE AUTHOR Belinda Sharp has been the general manager of the Morris Journalism Academy since 2008. She has worked with hundreds of students and graduates to achieve success in a broad range of areas, including developing journalism skills for non-traditional writing roles such as PR and Marketing. www.morrisjournalismacademy.com

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“You don’t know what you don’t know” …the dangers of purchasing business insurance on-line without a broker

by PAUL KAISER SUDDENLY A BUSINESS OWNER

etting up a small or medium sized business (“SME”) is one of the biggest and riskiest decisions individuals can make. Experts say consideration should be given to finances, budgets, speaking with accountants, tax, marketing, pricing, operations, location, premises, and advice from solicitors. Yet business insurance is often way down the list or forgotten. Sometimes owners think they can save money by buying a business policy themselves, that is, direct or online. Despite the fact that insurance contracts can run to more than 100 pages, there is often little thought that the cover may not be comprehensive in the event of an unexpected loss. It is difficult for a “newbie”, even an established business operator starting a second or third business, to anticipate all possible scenarios and everything they might need to claim for. An online insurer is unlikely to tell them that either. Online insurers tend to leave it to the purchasers to make those judgements. If something is not covered then it favours the insurer and the insured may be in ignorance of that fact until it’s too late.

THE RISK An investment in a business often includes taking out a loan - be it from friends, family or the bank, if not all three. Security for that loan may well be the family home. The business becomes the owner’s or owners’ (so often a couple’s) sole source of income, and superannuation. So why would owners risk not being fully protected - and losing everything when it comes to business insurance, especially when quality professional advice is so easily available?

BAD EXPERIENCES The sad part is that SMEs can find out they are not fully covered all too late. In a recent SME Index Survey conducted by Vero Insurance (a Suncorp Company), 50% of SMEs that had purchased their business insurance direct were dissatisfied with the experience/outcome and were more than likely to seek the support of a professional insurance broker at next renewal.

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“When considering protecting their largest asset, business owners would be wise to partner with someone that can help protect and preserve that asset at the time of greatest need. A broker advised and placed policy can make all the difference between getting back into business and not recovering at all.” THE VALUE OF A BROKER Why would it be better to use a broker, someone who places insurance for business owners, and has experience with disaster and claims every day?

“All Risks Cover” is far superior to “Insured Perils”. With “All Risks”, the insurer has to prove an exclusion to deny the loss, whereas with “Insured Perils”, the insured has to prove the cause of the loss was from one of the listed insured perils.

Quality business cover provides multiple extra/additional benefits whereas the majority of direct policies only carry lesser additional benefits.

Some of the limits under the direct policies are well short of what exists within the Steadfast wording, including “removal of debris” ($100,000 or 20% of total sum insured as opposed to $25,000), claims preparation costs, and additional increase cost of working ($25,000 automatic as opposed to $5,000).

First, brokers place a lot of business with multiple insurers and therefore have a known voice and contact, compared with online purchasers who may be “just a number” within insurers. Secondly, the broker is an experienced expert there to support clients through the process, ensuring that the cover is adequate, any claim is attended to in a timely manner, and that all entitlements under the policy are met. Recently at an insurance conference Robert Martin of Martin Minett Claims Preparers presented a paper on the differences between direct policies and those provided by a Steadfast broker. It highlighted that SMEs become too focused on price and not ‘value for money’. There is no point paying for the cheapest cover when at the time that it is needed most, the policy does not respond. Some pertinent points from the paper included:

The following case study of two incidences of a similar nature that occurred within the last 12 months indicates the above points, and are typical:

BROKER SCENARIO 1.

A fire occurred on a Friday Night.

The claim was accepted within eight days.

The business traded from temporary premises within 18 days.

Five progress payments were made and the business was fully reinstated by day 90.

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“Claims performance for direct books of business are usually better for insurers than those intermediated by brokers. This should make business owners buying on line sit up, as clearly they are missing out on receiving benefits under their policies or the policies don’t offer the same quality and extent of protection or cover that a broker would advise as absolutely necessary.” DIRECT SCENARIO 1.

A fire occurred on a Sunday Night.

The claim was finally accepted on day 33.

The insured was unable to trade from temporary premises as the policy did not cover these costs.

By day 90 only one progress payment had been made and the business was a long way off re-opening (if ever).

THE LESSON Three important factors played out in the broker scenario: The sum insured for “loss of profits” was correctly calculated by the broker in advance of policy purchase. >> There was, on the advice of the broker, after meeting with and understanding the needs of the business, “additional increased cost of working” included in the cover, which allowed for temporary trading to occur. >> The claim, with the assistance of the broker in formulating it - funded by the policy, was accepted just eight days after the loss. >>

SUMMARY When considering protecting their largest asset, business owners would be wise to partner with someone that can help protect and preserve that asset at the time of greatest need. A broker advised and placed policy can make all the difference between getting back into business and not recovering at all. Unless SME owners have wide experience from working within the insurance industry, a deep understanding of how cover and sums insured are calculated, and how a policy might respond, it is best for them to focus on what they do well - running the business, and let a professional broker advise and place the business insurance cover. If a major disaster does occurs the slightly increased premium costs will pale into insignificance. The bottom line is that ‘You don’t know what you don’t know’. Note: This article is general in nature only. Always seek independent financial, investment, tax and legal advice.

ABOUT THE AUTHOR Paul Kaiser is a Director of McLardy McShane Kaiser and has been in the insurance industry his whole working life, having commenced at Royal Insurance in 1977. McLardy McShane is part of the largest insurance broker network in Australasia, the Steadfast Group. Comprised of 306 brokerages with over 500 offices, the group generated over $5 billion in insurance sales in FY14. www.steadfast.com.au

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CEM TCX NPS UX

TCX

CRM

NPS

CRM

The Acronyms of Change

by TRACY WELLER-MCCORMACK

ACRONYM CONFUSION Every business trend, be it in human resources, finance or marketing, comes with its own new set of acronyms. Marketers are often asked why they make up so many acronyms around delivering to the customer. When it comes to “customer experience”, CX, TCX, UX, CEM and CRM, are all used. Understanding what these abbreviations mean and where a business is best suited to use one of them is important.

TCX STANDS FOR TOTAL CUSTOMER EXPERIENCE It is the end-to-end relationship businesses have with their customers. Good or bad, it is the complete interaction the customer has had with every aspect of the business, from the first customer contact to the present day. Customer response like “they are wonderful to do business with and I would recommend them” or “they are of poor quality and simply do not deliver” are nothing new, so why give it a new name? It is because what is often not considered is the entire complex relationship is purely based on emotion. It is a every personal engagement from beginning to end and everything in between; so much more than meeting contractual obligations.

TCX is the sum of a customer’s entire opinion of the entire company life cycle. This includes people engagement, executive management, operations and the quality of the products or services. CGU Insurance, Telstra and BUPA have recently won awards for their customer experience programs. Their success came in looking at all touch points of the total customer experience. Understanding their current strengths and weaknesses and relating them back to customer expectations.

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UX STANDS FOR USER EXPERIENCE

CRM STANDS FOR CUSTOMER RELATIONSHIP MANAGEMENT CRM has been around for some time. Some commentators state that CRM is dead and it is the customer who manages the relationship. CRM is an integral part of creating a positive customer experience journey. It may be in for a bit of a sea change, as it has historically been more of a sales focused tool. CRM has its place in standardising processes and gaining better insight into customers. It is an increasingly integral component for companies to win and retain customers. Every organisation’s goal must be to create amazing customer experiences by putting the right ingredients in place to build long-term customer relationships that are personalised, proactive, and predictive across marketing, sales, and service. The right CRM supports that.

CX STANDS FOR CUSTOMER EXPERIENCE It’s the experience of the touch points along the way, every aspect of interaction throughout the entire duration of the relationship with a customer. Everything from the first handshake, the quality of the services, people in accounts managing the accuracy of invoices, delivery, the receptionist with the first greeting and the person in the warehouse that the customer may never meet. It is also the meetings, the coffee, the events they are invited to, emails, phone calls and the level of service provided when something goes wrong. Customer experience is not just about a rational experience. It is not just about the ‘what,’ but also about the ‘how.’ McKinsey research reports that more than 70% of a customer experience is based simply on how they feel.

It is the practical, meaningful and valuable aspects of human interaction, the ease of that user interaction or experience and the simplicity of product ownership. User experience may be considered subjective in nature to the degree that it is about individual perception and thought with respect to the systems with which a client interacts such as a website, customer support, purchasing services. User experience is dynamic as it is constantly modified over time due to changing usage circumstances. UX is often considered to be the experience of engagement online or with an app. It needs to be more than that, UX is evolving and must take on a far greater role of importance in the customer experience journey any organisation embarks on.

CEM STANDS FOR CUSTOMER EXPERIENCE MANAGEMENT Gartner’s definition sums it up: “the practice

of designing and reacting to customer interactions to meet or exceed customer expectations and, thus, increase customer satisfaction, loyalty and advocacy.”

Knowing customers so intimately that organisations create and deliver personalized experiences that will entice them to not only remain loyal, but also to evangelize to others. Organisations cannot ask for any better advertising than that! Locating this depth of information is not something that just happens; especially if it resides in the workings of a deeply matrixed or layered organisation. When extracting insight from all customer touch points and channels across the entire organisation many do not know where to start or have the proper systems in place to get there. It is essential for success and when it is not in place, there is a strong possibility there are customer experience issues and customer turnover. Harness the information/customer data that does exist and start extracting insights to begin defining the company’s journey.

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S TXCX TCXCRM UNPC S NR PS M UX UX CRM UX X NPS U X C T CEMTCX CRM

BRING IT ALL TOGETHER

Sales and the process of engaging customers is no longer a one-size-fits-all commodity. It needs to be adaptive and responsive to the emotional needs of the customer, whether it’s business to business (B2B), business to consumer (B2C) or the supersize combo – B2B2C.

Apple did not start with “Let’s sit down with the engineers and figure out what awesome technology we have and then how are we going to market that”. With the acronyms explained businesses can think about their your own “Apple Experience”. What direction, and focus to take to ensure that when adapting a TCX strategy it encompasses CX, UX, CEM and CRM. To quote Jerry Gregoire “The customer experience is the next competitive battleground.” He is right. Before investing heavily in consultants, software, staff and a new way of engaging with customers, business should think about what exists now and what needs to be done to deliver the necessary experience.

PROLOGUE How does NPS fit into this equation? That’s a question for a future issue.

“None had a better understanding of Total Customer Experience than Apple and Steve Jobs. With a mantra from 1997 Apple began with “What incredible benefits can we give to the customer? Where can we take the customer?”

ABOUT THE AUTHOR Tracy Weller-McCormack has 15+ years of global customer innovation & marketing experience as a marketing executive for leading technology companies. Outside of her day job, Tracy is a business advisor to TCX Design and can be reached at: tracy@tcxdesign.com

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, Build a Peak Performing Organisation by LINLEY WATSON

One Conversation At A Time

PREVIOUS LIVES

NEW CHALLENGES

Owners can start businesses with sound technical expertise and a passion to do things better but with little formal training or exposure to people and culture. Their own business is their first experience of leading and managing people.

efore starting SMEs owners may have had careers in the corporate world where human resources (HR), organisational development (OD) and learning functions are well developed and taken for granted. They may have had only limited input to corporate vision, values and expected behaviours in their corporate careers. Beyond their own teams their influence on overall company culture may have been small or negligible. Many of the leadership skills developed and lessons learned in corporates are transferable to SMEs but owners can be unprepared for the breadth of business and staff demands that they must now personally address.

As the business grows they start to encounter the challenges of building a cohesive and engaged workforce. Although instinctively shaping their business based on their personal vision and values, it gets to a point where smart operators realise that they need to do something to address the people issues that have arisen and/or take their business to the next level. All business leaders are looking for ways to lift staff performance and improve results.

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“For many managers, dealing with unacceptable behaviour and providing feedback on poor performance is the most challenging and stressful part of people management, so they avoid it.”

Photo P. Southwick

Leaders who focus on people and culture have the opportunity to gain an advantage over their competitors and challenge much larger players.

LEADERSHIP CONVERSATIONS Effective communication is key to developing people and culture and a catalyst to peak performance. Face-toface conversations leaders have with their team members are the best opportunity to influence and inspire. There are three types of conversation, that if mastered, will have a significant impact on business results: first those that build relationships, secondly those that address performance and thirdly those that stimulate development. Leaders tend to be good at one or maybe two of these

conversations but it’s rare to be good at all three. There are ideas and practical tools that can help business leaders become more comfortable, confident and competent in conducting these important conversations.

CONVERSATIONS THAT BUILD RELATIONSHIPS Relationship conversations are about connecting more effectively with others, building trust, rapport, respect and understanding in order to work more successfully together. These often informal conversations are second nature to those who are naturally good with people but for others it is a struggle which can negatively impact staff engagement and team morale.

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The quickest way to build better relationships is to develop the habit of asking excellent open questions which start with “what?” and “how?” and to listen to the responses carefully and empathetically.

The best way to build the necessary courage for these difficult conversations is to carefully consider all the consequences of doing nothing compared with the payback of doing something.

In smaller businesses people tend to work more closely together and get to know each other well but there can be an unhealthy “us and them” attitude that develops between the staff and management which affects performance.

Then prepare well for the discussion by gathering all the facts including the impact of the unacceptable behaviour, outline the resolution or outcomes required and future expectations. Plan how to raise the issue, what to say, how they might respond and what will happen if they are unwilling to take this feedback on board and act upon it.

Everyone gets busy and social interactions can appear to be wasting time but leaders who take the time to join in or instigate chats ‘around the water cooler’ or in the lunch room can reap the rewards of a happier work environment. Using behavioural profiles such as DiSC, Myers Briggs, Tetramap and others is a useful and objective way to gain an understanding of how people think, feel and act in different situations. Profiling can result in real lightbulb moments that challenge old perceptions and heighten people’s acceptance of and respect for others. In business it is important to recognise and play to the strengths each style brings. Being aware of the different styles and being able to adapt one’s own style to communicate more effectively can dramatically improve relationships. Strong relationships are the basis of a peak performing workplace.

When well prepared, leading the conversation becomes less emotional and stressful than anticipated. If left unchecked for some time the person may be genuinely unaware of how their behaviour has negatively affected others and the business.

“Many a job or career has been saved by a courageous conversation at the right time.” FEEDBACK

For many managers, dealing with unacceptable behaviour and providing feedback on poor performance is the most challenging and stressful part of people management, so they avoid it.

People need and usually want to know how they are going, what they are doing well and how they can improve their performance. Along with positive feedback, providing corrective feedback delivered with the right intent, preparation and support has the power to strengthen relationships as well as lift performance and improve results.

However, turning a blind eye doesn’t fix the problem and it doesn’t help the individual concerned, those around them, or the business. Proactively addressing the small things can save them from becoming big things. The difficulty is that facing up to the issues and saying what needs to be said takes courage.

There are a number of commonly used tools or frameworks to guide leaders through the process of giving feedback. The Example, Effect, Change/Continue or “EEC” model developed by TakeON! is easy to remember and can be used to help guide conversations about inadequate as well as outstanding performance.

CONVERSATIONS THAT ADDRESS PERFORMANCE

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THE EEC MODEL EXAMPLE: Specifically, what did you observe? EFFECT: What happened as a result of the behaviour you observed? CHANGE OR CONTINUE: What should be continued and potentially shared with others or what needs to change and be done differently next time? Using a tool like EEC removes much of the judgment and emotion from the feedback process, it is quick to use and can be acted upon and monitored. The ideal ratio of feedback is 4:1 i.e. four positive feedback conversations to one negative. It takes effort to form the feedback habit but when applied constructively feedback is a powerful way to recognise and encourage better performance.

CONVERSATIONS THAT STIMULATE DEVELOPMENT Smaller organisations lag behind their corporate counterparts when it comes to coaching and are missing out on an opportunity to develop individual and organisational capability. Sir John Whitmore, an internationally renowned pioneer of coaching and leadership development defines coaching as “unlocking a person’s potential to maximise their own performance.” Coaching is a structured conversation focused on improving an individual’s performance and enhancing their skills. It is aimed at specific areas or issues, is action oriented and can be applied to almost any topic. Because coaching is about asking, not telling, it’s not necessary for a coach to be an industry expert and have all the answers. In fact that can be a disadvantage. A common misconception is that coaching needs to be a formal hour long exercise. It certainly can be that and more but it is surprising how quick a meaningful coaching conversation can be. There are a number of frameworks to guide the discussion, the most well-known being GROW (Goal, Reality, Options, Wrap-up). A good first step for business leaders is to engage their own external coach, then instigate the process internally.

COACH OR MENTOR The role of a coach and mentor are frequently confused. A mentor is often someone internal, they’re usually older with significant relevant experience and they’re happy to provide guidance and share their knowledge, advice, and networks. Business owners tend to be more comfortable in a mentoring role than they are coaching. They are different but complementary roles that can stimulate the development of team members. Culture has been described as the sum of the conversations in an organisation. Improving the quality of relationship, performance and development conversations will help to build a peak performance culture that delivers better business results. ABOUT THE AUTHOR Linley Watson is founder and managing director of Peak Performance International a leading Australasian people and culture consultancy. She helps business leaders to build peak performing organisations. Linley has a BCom in Marketing and International business and numerous professional accreditations. Contact: linley@peakperformance.com.au. www.peakperformance.com.au

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Getting Rid of the Glass Ceiling

Interviews by BARBARA BARKHAUSEN

omen do want to break through the glass ceiling and sit on company boards and lead corporations. But to achieve this, more active support from senior executives and guidance for younger women in the work force is needed, says Janine Garner, a successful entrepreneur and author of the new book â&#x20AC;&#x153;From ME to WEâ&#x20AC;?. In the second interview advice comes from executive coach Angela Heise who wants women to go against convention as well as network and work together.

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JANINE GARNER, CEO OF LBD GROUP We are seeing an unprecedented desire at present to get rid of the dreaded glass ceiling. Realistically though, the numbers of women on boards and in senior executive roles are not drastically increasing, and nor should they unless they are based on merit rather than just a quota system, as this takes away any true meaning from the phrase ‘equality in the workplace’. The question is, how are we going to see women move into these roles? It cannot just be a matter of talking the talk. There seems to be a persistent belief that committeebased ‘think tanks’ will see a magic solution appear out of nowhere. What we need is active collaboration in the form of sponsorship. Currently, younger women in the workplace are not receiving the guidance they need from those in positions of seniority that will give them the tools necessary to take a corporation or major business area further down a success path. And because those above them are currently in the majority male – the sponsorship needs to come not just from women in positions of leadership, but from men of worth as well. This is where the system is falling down. Like is, in the main, sponsoring like. This means that ‘minority’ groups – and women still count as this – are not receiving the best advice, strategies, and assistance in how to navigate their way into senior positions that they could be. Women within senior positions are also not active enough in sponsoring down the ranks and generation gaps. The culture of alienation between Baby Boomers, Gen X, Gen Y and the emerging Gen Z is still going strong.

If we as women of worth are truly going to be able to embrace the opportunity of senior leadership, it is going to come down to actively seeking out those below us in terms of their age and position and nurturing their strengths – because they will be the ones to bring equality to the boardroom. ABOUT JANINE GARNER: Janine Garner is a business woman, entrepreneur and socialpreneur. She is the founder and CEO of LBD Group (the Little Black Dress Group), a community of successful and results oriented business women and entrepreneurs in Australia. Before starting her own business Garner worked in corporate marketing for brands like Ralph Lauren, Oroton, Jaeger, Sainsbury’s Homebase and Citizen Watches. Her first book From ME to WE about effective collaboration was launched with Wiley in 2014.

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ABOUT ANGELA HEISE: Angela Heise is an executive coach, corporate trainer and facilitator with an international portfolio of clients spanning a diverse range of industries. She is the developer of a Performance Excellence program which has helped many people deal effectively with stage fright. Her Global Village Skills program supports people who live in culturally diverse and fast changing environments and her Balcony Success Clubs program enables people to build constructive and emotionally intelligent work cultures.

ANGELA HEISE, EXECUTIVE COACH Live your life, fulfil your needs, stand up and be counted. Ignore advice such as that provided by Microsoft CEO Satya Nadella who suggested (later regretted) that women should wait for promotion and rely on karma. Instead, proactively map out your career path, find mentors, acquire the skills outside of work, such as getting an MBA and build a solid track record. Promote yourself, be seen without over-promoting yourself. Then present yourself as a candidate with willingness to listen to feedback, while standing strong for your values and the embedding of your work within the rest of your life. Willingness to show up constructively, with a creative solution focus and ability to operate both within a team and as well as heading a team, works well for any job progression. Inform yourself about pay rates and ask for what you are worth. Gender biased pay is still the norm in many places. Negotiate with your partner - discuss who gets to take time to prioritise their career and take turns in supporting the other in pursuing professional goals, and taking care of family and household. The average person has between 15 to 20 jobs and changes careers six times in their lifetime, so the corporate ladder is not limited to leaning against a single wall anymore. Go against convention - if you can’t find the job that suits you, create it. The world needs entrepreneurs, who think outside the box, intelligent risk takers who question everything, who know how to think, not what to think. We need women, aware of ego traps, who consider the bigger picture, who don’t have to prove their alpha. Network – men do it far more effectively than women. While women are really good at supporting each other as friends,

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we have yet to learn how to build strong business networks.

Turn your maternal instincts for nurturing into strategy. Avoid playing mum.

The good old boys networks have much to teach, good stuff as well as bad. It’s great to have mates, but it makes no sense to put mateship above integrity, ecology and excellence. When you network to support power, profit and ego, the consequences can literally be lethal.

Empower the people around you to become leaders. Mentor others.

Today, women’s idea of legacy is often different. Yes, it is based on financial success, because, let’s face it, making sure you have a roof over your and your children’s heads is everyone’s priority, it is not about accumulating riches for riches sake. Enlightened women and, of course, men include education, personal growth and ways to achieve work-life integration in the businesses and cultures they create. Women need to support women. We don’t live in caveman times anymore, where women needed to associate with the strongest males in order to ensure their survival, while sabotaging the other males through undermining their females within the community. As a broad generalisation men cover each other’s backs, women often undermine each other. I have facilitated meetings with men who aggressively defended their position and then cheerfully went out for a beer together. Women are not as willing to separate their professional gripes from the personal relationships, or judge women on not being able to be brilliant mothers and business leaders. The concept of the “raven mother”, a bad mother and a woman who works, is unfortunately still prevalent, even if it just in the minds of women, who cannot shake a permeating sense of guilt, of never being good enough. Take risks, forgo convention. If they call you a bitch, laugh. Remember, if a man is determined and decisive, he is powerful.

Own your femininity. That doesn’t mean cleavage or high heels. It means that you stay true to yourself and to whatever model of femininity you have. If you don’t like suits, don’t wear them. If you want to move a meeting, move it. Instead of turning yourself into a pretzel, negotiate. There is far more acceptance out there for what you want once you stop asking for permission. It’s far easier to alienate people as a woman than it is as a man because a man can get away with behaviours that are unacceptable for a woman: a strong-worded, loudly voiced statement is perceived as powerful coming from a man, and as hysterical or bitchy coming from a women. Create some publicity for yourself by showing up, and expressing who you are. Be authentic and own your flaws - just avoid supporting people to enable them. Remember, if you want to fit the mould that others shape for you, you are a follower, not a leader. ABOUT BARBARA BARKHAUSEN: Barbara is a Sydney based foreign correspondent, TV and radio producer, writer and author producing all work in English as well as German. She is widely published in Europe - in both German and English, and Australia, on a wide range of business and other topics. Her experience is with some of the very best film and publishing houses in Europe including Bavaria Film, ZDF and Pro7. Barbara is passionate about well researched and written features/reports/books/films and supports literature as well as the environment. She also offers copywriting, ghost writing and corporate writing for business clients.

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EXIT Transition and Exit Planning What’s all the fuss about?

“Give me six hours to chop down a tree, and I will spend the first four sharpening my axe.” —Abraham Lincoln

by KOOS KRUGER

DEFINITION A transition and exit plan it is a comprehensive roadmap to successfully exit a privately held business and prepare the owner for life after work. It asks and answers all the business, personal, family, financial, legal, and tax questions involved in exiting a privately owned business. It includes contingencies for illness, burnout, divorce, and even an owner’s death. Its purpose is to maximize the value of the business at the time of exit, minimize the amount of taxes paid, and ensure that the business owner are able to accomplish all their personal and financial goals in the process.

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KEY STATISTICS The MGI Australian Family and Private Business Survey 2013 revealed some interesting statistics:

34% 55%

SALE OF BUSINESS Of those that plan to sell ….

of retired business owners do not have an adequately funded retirement. Up from 31% in 2010.

32%

Wish to retire

of all business exits are due to death, disability, bankruptcy, receivership, liquidation or simply closing the doors.

25%

Have concerns for the future

21%

Lack a family successor

10%

Originally intended to sell

LEADERSHIP SUCCESSION – Only 20.4% have a clear process for successors to develop as individuals, in their roles and in the business. SUCCESSION – 75% of businesses do not have agreement on a proposed exit plan, even though 33% are relying on the sale of the business for cash to fund retirement.

END GAME Stephen R Covey, author of The Seven Habits of Highly Effective People, says: “If you want to have a successful enterprise, you need to clearly define what you’re trying to accomplish … the extent to which you begin with the end in mind often determines whether or not you are able to create a successful enterprise.” The failure to create a well-defined plan can mean that business owners will: >>

Exit their businesses as a result of pressure from outside circumstances, not as a result of their own desires.

Exit their businesses on a timetable that’s forced on them instead of one that meets their needs.

Undervalue their business and leave hardearned wealth on the table.

Pay too much in taxes.

Lose control over the process by being reactive and limiting their exit options.

Fail to realize all their business and personal goals.

Suffer unnecessary psychological stress.

Watch a lifetime of work disintegrate as a result of poor business continuity planning.

Lose confidence during the sale or exit process.

PLANNING AHEAD Planning ahead is valued but often not completed. Within business life, it makes sense to be more concerned about what’s happening today instead of what’s happening tomorrow. The benefit of planning ahead will allow owners to concentrate more fully on the present business operations, a true benefit that can pay big dividends. The more owners plan for the future, the more they can focus on the present day, allowing them to build the success their organisations deserve.

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STEPS The four key steps to exit are as follows: IMPACT The exit transition affects more than just the owner and it impacts more than just what they will do when not working anymore. This transition from working to not working is something that must be carefully orchestrated, planned, and organized. Owners need a comprehensive plan to ensure they’re heading in the right direction— long before they get there. They also need the time to execute the plan and build the resources that will ensure they can enjoy their retirement.

KEY QUESTION BY WAY OF AN EXAMPLE Do passengers arrive at the airport and when asked where they are going tell the driver to just drive and let’s just see where we end up? No, they provide clear instructions on the address and often the preferred route to be taken. The same is required with a business. Not having an exit plan is like driving without having a clear plan of what the end will look like. An Exit Plan is not only prepared when thinking of selling a business, it is prepared when starting a business.

DIFFERENT DESTINATIONS A business that will be listed will look vastly different from a business being passed to the next generation. Transition and Exit Planning strategically combines both the head and heart issues to create a successful new future – for the business owner and their company.

1. Create a personal transition plan. 2. Create a business exit plan. 3. Implement a business exit plan. 4. Move to the new life. CONCLUSION Formulating a precise exit won’t minimize the chance of unexpected bumps in the road. Those bumps will come no matter what. However, having a structured exit plan can help better navigate the businesses in the present, thereby maximizing the chance that owners view the future with more peace of mind. With peace of mind and concentration on the present business, owners are better able to deal with the inevitable obstacles and challenges that emerge as any business evolves. Transition and exit planning is for every person that owns a business, either as a sole trader or as a partner, within a large or small business. Tomorrow can be too late. a lesson learned by many retired business owners. ABOUT THE AUTHOR A chartered accountant Koos Kruger assists clients through his consulting company Business Exit Companion which specializes in business advice and exit-planning services for business owners of small/medium businesses. www.exitcompanion.com.au

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NEWS

June 2015

FEDERAL BUDGET 2015 Federal budgets are usually quickly forgotten. However from an SME point of view 2015 may live forever. Specifically the immediate write off for assets up to $20,000 will be long remembered. Here is a summary of the key measures announced by the Treasurer that help SMEs, as sourced from www.budget.gov.au

ACCELERATED DEPRECIATION From budget night until 30 June 2017 small businesses will get an immediate tax deduction for all qualifying individual assets they buy costing less than $20,000 (up from $1,000).

CUTTING FBT RED TAPE From 1 April 2016 the FBT exemption for work related portable electronic devices will be expanded to include items like mobile phones, laptops and tablets.

ROLLING OVER CAPITAL GAINS Small businesses will receive capital gains tax rollover relief when changing their legal structures but keeping the same owners. For example, from a trust to a company.

TAX CUTS The tax rate for more than 90 per cent of incorporated businesses with annual turnover less than $2 million will be reduced by 1.5% to 28.5%. There is a 5 per cent tax discount to unincorporated businesses with annual turnover less than $2 million from 1 July 2015.

COMPANY START-UP COSTS There willow be an immediate write-off for company start-up expenses, including legal and accounting advice plus establishment costs paid to professional services providers.

WAGE SUBSIDIES FOR JOB SEEKERS Employers who offer job seekers an ongoing job can receive a wage subsidy with flexible payment arrangements.

WORK EXPERIENCE FOR JOB SEEKERS The Government will provide $18 million over four years for around 6,000 job seekers annually to undertake work experience for up to four weeks while they continue to receive income support. Referring to potential employees the Prime Minister described this measure as giving SMEs the chance to â&#x20AC;&#x153;try before they buyâ&#x20AC;?.

Note: This article is general in nature only. Always seek independent financial, investment, tax and legal advice.

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Trans-Tasman Business Class with Virgin Australia by PAUL M SOUTHWICK

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NEW OFFERING

or years Virgin Australia offered only economy or premium economy trans-Tasman flights. Given the amount of business traffic between the dominions, including that originating or terminating in Asia, Europe and the Americas it is not surprising things have changed. Having successfully promoted its business class offering on domestic flights in Australia, especially to and from Perth, Virgin forecasts demand for business class on the trans-Tasman and Pacific Island routes. In December 2014 Virgin Australia announced a business class service starting with Sydney - Auckland on 28 February 2015 and from the other main cities on 31 March 2015. The Sydney - Auckland flight distance is 1,170nm (2,169km), less then Sydney - Perth at 1,775nm (3,287km). The usual trans-Tasman flight time is about three hours to New Zealand and three and a half return. This is “short-haul” international, not the length of flight that you would want to “settle in (bed)” for the night - after factoring in takeoff, climb and descent there simply isn’t time. Virgin’s Boeing 737s have been reconfigured with a pointy end 2-2 business class configuration in two rows - a total of eight places, including leather seats and menus by chef Luke Mangan. Priority check-in and boarding are included. In May 2015 Spark Magazine was offered the opportunity to sample the transTasman business class service in seat 2C on the Melbourne - Auckland route. We chose a 10.00am Thursday departure from Melbourne, arriving Auckland at 3.40pm and the eyelid challenging 6.30am Saturday departure out of

Auckland, arriving back in Melbourne at 8.40am. The return flight is a popular one so as to be back home with the family for the entire weekend.

PRICING A few days before the flight www. webjet.com.au was checked for the best pricing in business class as per the table below. “Discount” airlines were not selected so as to be sure to compare similar offerings typically taken by people flying for business. Depending upon the actual flight chosen it may be possible to access a different product offering, e.g., lie flat beds on some night routes. Trans-Tasman flights with Virgin and Qantas are about half the price of the cheapest business class flights to and from Perth on the same days. The trans-Tasman multiples from economy to business are interesting. Comparing cheapest, advance purchase, no bag or food included, to full service business class there are multiples of four to five and the prices of major competitors were within $500 of each other, perhaps reflecting both the competitiveness of the route and slightly different market positioning. However a more realistic comparison is a flexible economy fare with bag and food booked a day or two before the trip - more typical of the ever changing realities of business flights. In this case the multiples were as low as 1.3 putting the Virgin business class fare into a very positive light indeed. As a postscript to this pricing, a week after the flight it was possible to access the Virgin business class fare for as low as $1,297, by booking in advance and being prepared to except linked set departure and return times. This placed it the same range as some flexible economy fares.

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RETURN FARES: MELBOURNE - AUCKLAND 14 & 16 MAY

Virgin / Air NZ

Qantas

Emirates

$861

$941

$1,021

Back

$792

$801

$1,021

Total

$1,653

$1,742

$2,042

Business

CHECK IN AND LOUNGE

Economy A: Advance purchase. No frills or changes To

$158

$176

$216

Back

$211

$176

$236

Total

$369

$352

$452

Economy B: Flexible, bag & food To

$804

$674

$726

Back

$516

$627

$519

Total

$1,320

$1,301

$1,245

Multiple A

4.5

4.9

4.5

Multiple B

1.3

1.6

Source: Webjet, 10 and 13 May 2015

Air New Zealand is a Virgin Australia shareholder and the two cooperate very well under the “Two airlines, one Tasman Team” banner. As part of that arrangement Virgin business customers get access to the Air New Zealand Koru lounges in Melbourne, Auckland and other cities. The lounges are well run, without fuss, with a good but not over the top standard of amenities, and staff with a friendly attitude.

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Check in two hours before departure at Melbourne is a breeze with many Virgin counters open and only short waiting times. Best of all is the priority card that gets business class travellers quickly through immigration and bag checking. In the priority queue new equipment allows everything, including laptops and liquids, to be left in carryon bags for checking. Full body scanners are in use too. This airport is serious about reducing traveller stress and polite staff show passengers their scan silhouettes. Business travellers will love the lack of downtime. It seems Virgin wants to give the corporate jet operators a run for their money in this respect. The Air NZ partner Koru lounge is large, with tarmac and runway views, clean and well air-conditioned, with rest and eating areas to suit every taste, including a children’s fun room. There is free high speed internet and a business centre with desks, computers and a printer. There are also several very well equipped showers. The food includes a wide selection. “Man sized” cups or mugs would be a good addition to the crockery, a comment made by several travellers. A boarding announcement is made twenty minutes before departure.

THE SET UP The great thing about row 2 is that because of the dividing panel between classes no one from behind grabs the back of your seat as they sit down. Very useful on the 6.30am return flight. The seats are rather more like lazy boy chairs than beds and provides plenty of tilt back for a short snooze if that is your preference. The comfort kit includes a blanket and pillow. Being towards the front and ahead of the engines noise levels are low to moderate and there is a handy toilet at the front of the cabin reserved just for business class.

VIRGIN AUSTRALIA BUSINESS CLASS 1. Leather seating with 38” pitch on the 737 2. International quality comfort pack 3. Coat check-in service with complimentary coat bag 4. Newspapers until noon daily 5. Luke Mangan gourmet full service dining 6. Top Australian wines, beers, and spirit selection 7. Gourmet tea selection from Madame Flavour 8. Priority check in and baggage service where available 9. Two check-on bags of up to 30kg each 10. Business lounges and priority lanes where available

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ON BOARD There were two other people in business class for our flight. Power outlets for charging gadgets are between the seats - very useful. There is plenty of room to stretch out but more particularly the width of the seats and tray tables make it very easy to work without bumping elbows. A New Zealand newspaper - perhaps flown over on the early flight, is offered, making it easy to catch up with destination news. For those who have not already preloaded

the entertainment software onto their devices loan tablets are available. A nice addition here would be a business news section. Push back and take off were both on time and a change to seat 2A yields a view out three windows. The Boeing is soon climbing through 20,000â&#x20AC;&#x2122; high above the city. Itâ&#x20AC;&#x2122;s then blinds closed and time to work. The crew offer a wide selection of nonstop food and drink including high quality wines. The main dish of meat balls was

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tasty and not too filling. Shortbread made with Kiwifruit were served with the cuppa and a real treat. Testing the recline on the seat, it is not lie flat but nevertheless very comfortable and good enough for a cat nap. Both the other passengers, one a famous ex Wallaby star, now author, work and then have a brief snooze too.

ARRIVAL The flight time is spot on three hours. It’s nice with business class to be straight off the plane and Kiwi efficiency means passengers from the pointy (without bags) are outside Jean Batten Terminal and on their way for business in Auckland in less than ten minutes.

RETURN FLIGHT The return flight is very similar and uneventful save for a short delay due to fog in Melbourne, and a lack of power points in the older 737-800 - not a major issue on such as short flight. The large Koru lounge in Auckland scorers a perfect 10 due to the man sized mugs. Although the economy section was full and there were five passengers in business class, the cabin at the front was noticeably quiet - another big plus for travellers wanting to work, and the service was there just when you needed it. Again the priority card for business travellers gets them well around and ahead of the very large numbers of tourists from Asia lining up for immigration. Virgin’s business class 2+2 leather seating with 38 inch pitch.

CONCLUSION At a modest multiple to the price of a comparable economy fare, Virgin Australia’s short-haul business class is both practical and good value for money.

Paul Southwick flew courtesy of Virgin Australia who also provided the photographs.

All the little things that are done so well, and attention to detail without fuss, add up to ensure that the work is easy and travelers preserve their most valuable resource - time.

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Cirrus Australis

Super Fast, Super Safe, Super Business Tool by PAUL M SOUTHWICK

A BRILLIANT MARKETING IDEA A few years ago, Graham Horne, head of Cirrus Australia made a brilliant marketing decision. He went to the Cirrus head office in Duluth, Minnesota, and asked for a customised version of their Cirrus SR22, just for Australia. The SR22 has been the world’s top selling piston engine aircraft for the last 12 years. He named the aeroplane “Australis”, and included air conditioning and UV protected windows for the harsh environment, two 12 inch colour display screens, a 4-in-1 electronic back up instrument (rather than the usual dials), and a special Southern Cross colour scheme, inside and out. By the first day of the Avalon Air Show earlier this year Horne had already sold four of the US$633,900 aircraft. Orders continue to flow. The price includes the ferry flight from the US, Australia registration, and a safety intensive three day transition course - more on that later. It’s a total package, just for Australia conditions, pilots and business.

Cirrus Australis N9ZN with its Australian colour scheme parked at Moorabbin airport in Victoria

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The crystal clear 12 inch colour display screens, including synthetic vision. There is a 4-in-1 backup display too.

So who is the typical buyer of the Australis and what attracts them? When would an Australis make sense for your business? Before answering these questions let’s take a look at the key technical details.

THE TECHNICAL DETAILS The Australis is a five seat, fixed undercarriage, single engine, low wing, six cylinder, 231kw piston aircraft, made of light and strong carbon fibre, with a leather interior, air conditioning, “TV screen” cockpit, a top speed of 343kph, GPS navigation, automatic pilot, ice protection, multiple systems redundancy, airline like side sticks instead of “steering wheels”, airbag filed front seat seatbelts, and perhaps most important of all, a parachute. Yes a whole of aircraft life saving parachute. The Australis has a range of over 1,733km and with passengers breathing the installed oxygen can fly above weather at a height of 5,334m. The empty weight is 1,027kg, and total takeoff weight is 1,636kg. So after allowing 251kg for the 348 litres of aviation fuel, there is still plenty of room for 358kg of pilot and “passengers”, be they colleagues, family or sets of golf clubs. At over 340kph, and 27L/100km the flight time between most state capitals on the eastern seaboard is less than two hours, with no queues. More or less everywhere in Australia is reachable in a single day. With takeoff and landing distances of just 313m and 348m respectively, the Australis gets comfortably in and out of most airfields - public or private.

TEST FLIGHT In the second quarter of 2015 Spark Magazine’s editor, a qualified pilot since 1985, was offered the chance of a flight in a brand

“What freedom lies in flying, what Godlike power it gives to men . . . I lose all consciousness in this strong unmortal space crowded with beauty, pierced with danger.” Charles Lindbergh

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Sleek clean lines from the spinner to the tail. Note LED lighting.

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new US registered Australis “November Nine Zulu November (N9ZN), from the Cirrus Centre at Moorabbin airport in Victoria. Pilot in command for the day was Graham Horne. Entering the Cirrus was easy thanks to the large gull wing doors on each side. The seats were fully adjustable and the view over the nose particularly good. The aircraft sits high of the ground and gives one a fully deserved - as Cirrus owner, pilot or passenger, sense of importance. On start up, with or without headsets, and in flight, the aircraft is amazingly smooth and quiet. It’s a perfect day, with clear blue sky, no wind and unrestricted visibility, without the haze that can come in summer. Nevertheless, we immediately switch on the powerful air conditioning that keeps us refreshed under the direct sunlight, and at a perfect temperature. We depart “straight out” on Runway 17 Right (this means a heading of 170 degrees magnetic - or south) and are very quickly cruising at 2,500’ (800m) and 165kts (350kph) . Despite being a low wing aircraft the view forward, sideways and to the back is spectacular from both rear and front seat - there are two seats up front and three in the back. The wing has cleverly been position so it does not obstruct the view. The aircraft is not just speedy but stable and Horne demonstrates some of its many built in fail-safe or “idiot proof”

safety features. First he points the nose a little too high, and as the stall approaches the electronics cut in and automatically lower the nose. Similarly, in an over adventurous bank, to either the left or right the, control stick pushes against the pilot’s hand and the aircraft rights itself. On the control panel immediately in front of the pilot is a special blue button. If and when pilots finds themselves in an “upset” situation, perhaps due to inattention, loss of spatial awareness, or maybe an unexpected meeting with a larger plane’s jet wash, this button can be pushed and the aircraft systems automatically takes over and brings the Cirrus back to straight and level flight. Says Horne, “The Cirrus even knows if we are flying in oxygen required altitudes and checks we are awake. If we do not respond, after a preset time, it will descend the aircraft to a lower, safer, supplementary oxygen not required, lower altitude”. This will prevent the type of tragic accidents we have seen in the last few years, e.g., to golfer Pane Stewart where the pilots were unaware they were falling slow victims to hypoxia, fell asleep, and the plane flew on and eventually crashed killing all on board. This is most unlikely to happen in the Cirrus. The two glass display screens have multiple systems redundancy (back up) and include full synthetic vision,

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which shows a moving picture of what is outside the aircraft, no matter how bad the weather or visibility. The other screen can display a large moving may so pilots know exactly where they are at any time. Getting lost is almost impossible - a big plus in such a vast country as Australia, especially over the Eastern seaboard mountainous ranges or flat, featureless outback. There is also “traffic” or other aircraft shown on both screens including where they are, how high compared to the Australis and if they start to get too close they appear as a larger and larger solid circle on the screen that gives time for a setting a new non conflicting heading or altitude. This traffic feature is very useful in such a fast aircraft joining back at a aerodrome full of students like Moorabbin, Bankstown, Parafield or Jandakot. All of the navigation charts, airport diagrams, communications frequencies and weather information are also displayed on the large colour screens, such that paper simple isn’t required by the Australis pilot. Our return to Moorabbin Horne demonstrates the superb handling in the circuit, gentle landing characteristics and power of the high performance ceramic bakes to stop quickly.

INTO THE SIM For non-pilots, a full motion aircraft simulator or “sim” are hard to understand. The truth is that once seated in these modern wonders, in front of a full mock up cockpit, worldwide airport and terrain database, realistic widescreen colour graphics, and powerful hydraulic-driven actuators, you are there. It is the real thing. You soon forget, and must forget, that you are in a simulator. You actually believe you are there. Sims are used for three reasons. First they are much cheaper to operate than the aeroplane itself. Secondly, pilots can run through complex and potentially

dangerous emergency procedure drills with a qualified instructor, over and over, until they are perfect, in complete safety. Thirdly, pilots can do all this in much less time, e.g., when the boring en route flying between airports is skipped. Director of Cirrus Melbourne, Charles Gunter, offered the author just one choice - that of the airport from which the “test” flight would be flown. The author chose Hawthorne (KHHR) just a few km from Los Angeles International, with flights to Torrance (KTOA) and the aircraft carrier like Avalon, at Catalina Island (KAVX). The rest of the fight was a simulation of real life emergencies including, a sudden deterioration of weather necessitating return to point of origin, display screen failure, total engine failure, with a required forced landing without power at YTOA, and an unrecoverable spin that in most other aircraft would mean a fatality. Being in the Cirrus, the aeroplane parachute could be deployed (as it can from as low as 200m) and the entire plane descended slowly to earth, landing is a survivable bump, the impact of which was absorbed by an aircraft entirely design to crumple around the occupants but keep them safe. For a real two life stories about parachute deployment saving lives go to: www.cirrusaircraft.com/flight-training/ caps-training/ www.youtube.com/watch?v=9gCMdeU22Dk Gunter says that in relation to the parachute system “To date, total time on the worldwide Cirrus Aircraft SR-series fleet has surpassed five million flight hours with 105 lives saved as a direct result of parachute being a standard safety feature.” Therein lies a key competitive advantage of the Cirrus over most of its competitors. The reality is that many pilots and partners of pilots, when given a choice, insist on the Cirrus, because of its parachute.

BUSINESS CASE Spark Magazine was able to meet some Cirrus buyers. They had a few things in

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Just south of Moorabbin airport admiring the harbour’s beaches and golf course

common. They were in their forties or fifties and owned businesses that required them to be more or less anywhere in Australia, at a moment’s notice, and often. They were already pilots, perhaps with their own aircraft, or regular renters, who simply could not rely on or spend the time with connections required by using the airlines. They wanted to be able to fly themselves, and sometimes their families, with the minimum of effort, but the maximum safety. Says Gunter, “Often when the buyers come to us they have already done their own extensive research and are quite sure the Cirrus is for them. Our role is to make the whole purchase process enjoyable and easy and then make sure they receive the quality training and support they need.” “Some have a high interest in the tax issues - in which case we send them off to a chartered accountant experienced in these matters, whereas for others the tax advantages are a secondary issue to convenience and safety.”

A pilot’s license costs about $12,000 in Australia - similar to the all up cost of learning to ski. But you will need to build up your hours before taking on the Cirrus. One advantage offered by Cirrus is that a total training package is included with the aircraft. And there are very professional, airline pilot like refresher courses every two years, or more often if you need them. If self-fly, at speed to destination, comfort and absolute safety are your business needs, then the Cirrus Australis might just be the solution. You will be in good company with famous owners including Angelina Jolie, Tom Cruise, and the United States Air Force. Cirrus is also close to certifying a personal jet if you want more speed. Look out for the Vision SF50 in our future flight tests.

Paul Southwick is the Spark Magazine editor and a qualified pilot. He flew in the Australis and SR22 simulator at Moorabbin airport courtesy of Cirrus Aircraft Australia.

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Melbourne Bus vs Sydney Train by HOLLY DEY

elbourne has an airport bus service and Sydney a train service. But in a head to head “test drive” the Melbourne bus service wins hands down. It makes Melbourne a much more attractive tourist destination. Here’s five reasons why:

The Melbourne service is dedicated just to the airport-city-airport run, with no stops and no other passengers. The Sydney train is part of a domestic network line to other places, and at rush hour is full of NSW suburban commuters. It stops several times before it gets to the CBD.

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The Sydney trip is expensive at $32 return with no hotel drop off, compared with $34 in Melbourne that includes drop off to any city hotel.

The Sydney service does not cater specifically for airport customers. It’s a normal train with no provision for bags. If customers have bags they must either lug them up or down a set of stairs (twice) or sit with the prams, mothers, children and special needs folks downstairs - for whom they will inevitably need to kindly give up their seat. The Melbourne busses have dedicated areas for bags, and the drivers all very willingly help those who need it to place them in and out of the storage areas.

The Melbourne buses have a free Wi-Fi service - just what every aboutto-depart or just-arrived traveller needs to contact loved ones, check the news, or maybe the map to the hotel. No such service exists in Sydney. And talk about free, when travellers get to the Melbourne CBD the trams are free. No such luck in Sydney - first there are no trams and second the buses are not free. They even pulled out the monorail.

The Sydney trains are hot and stuffy with poor air-conditioning, made worse by the warme and humid climate. The buses in Melbourne are well air-conditioned, clean, and run by a highly dedicated and obviously happy bunch of obliging staff. Often the drivers greet every passenger with “Hello!” Over time these differences further entrench Melbourne as the world’s most liveable (and lovable) city. There’s time and room for Sydney to respond. The question is, will they?