Spark Magazine August 2015 by Spark Magazine #FuelForBusiness

THE FUEL FOR BUSINESS

SPARK Magazine

Issue No.3 August 2015

Renewing Retail Leases at Expiry the Tide Turns in Tenant Favour Virgin Australia’s “Business Lite”.

The Anatomy of a Winning Facebook Ad.

The Perfect Pitch.

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Contents 4

Virgin Australia’s “Business Lite”. Attractive new travel option for US bound SME owners and managers.

It’s Time to Take Charge of Change. Practical advise from the leader of Australasia’s top people and culture training company.

Who Keeps the Books. Bookkeepers as an economical option for SMEs in preparing their business accounts.

The Anatomy of a Winning Facebook Ad. Tips from an experienced adviser on how to maximise SME business exposure.

The Perfect Pitch. What every SME owner and manager needs to do perfectly, every day.

Sponsorship Return On Investment. Making sure SMEs get the biggest bang for their bucks spent on sponsorship.

Business Meeting Hot Spots. The best places to meet for a casual business chat in the world’s most livable city .

News.

Renewing Retail Leases at Expiry the Tide Turns in Tenant Favour. Part 3 of our series of advice about how SMEs with retail premises can best position themselves at lease renewal time.

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

ISSUE NO.3 AUGUST 2015

Welcome to Spark Magazine. This month we feature the third installment in our series of advice for SMEs about negotiating lease renewals, with a focus on retail leases. SME owners with retail businesses, especially in large shopping centres will be pleased to hear that the tide is starting to turn in their favour and there are deals to be done at renewal time. Below the surface there is all sorts of assistance available.

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.

Away from bricks and mortar we feature follow up articles from our popular writers Glen Carlson and Kristina Mills with tips on how SME owners can advance themselves and their businesses. The first article is on pitching a business and the second on how to get known and sold via Facebook. Both articles get straight to the ”how to” without too much theory, so SME owners will be able to put the tips into use immediately. People and culture expert Linley Watson continues her series about how to effect high performance, with a focus on leading change. A new writer, Morris Kaplan makes the case for bookkeepers and the value they can add to SME business owners by freeing them up for more important things, like growing the business and making money. If you are an SME owner or manager who must make occasional or regular trips to the US for business, and be fresh as a daisy when you get there, but your budget won’t quite stretch to a business class fare, you will be most interested in our preview of Virgin Australia’s revamped premium economy. Spark Magazine senses that this offering might be much closer to “business lite” than premium economy and that Virgin is onto a real winner with this fare. Next month we will include some more travel related articles and look at cross cultural issues of doing business in or with Asia.

Paul M Southwick CEO and Editor paul@sparkmag.com.au

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 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. In some cases journalists writing for SPARK Magazine may consult to or provide corporate writing for companies mentioned in articles. The journalists or Spark Magazine do not accept payment from companies to cover or include them. ©2015 by Pow Wow Pty Ltd. All Rights Reserved. Reproduction in whole or in part without permission is prohibited.

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Virgin Australia’s “Business - Lite” r by Paul M Southwick

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Constant Improvement

he Australian aviation market is fiercely competitive and resting on one’s laurels is not a business model John Borghetti subscribes to. Virgin Australia has a track record of pioneered new offerings and they’ve done it again. The latest development is best described as “Business Lite” and will be of particular interest to SME owners and managers who need to travel long haul for business and arrive fresh, for example, the Australia – west coast US route, but whose budgets won’t quite stretch to business class.

The New Premium Economy Cabin Virgin Australia has announced that in late 2015 it will launch a major redesign of the premium economy cabin on board its international Boeing 777 fleet. This new premium economy cabin will have fewer seats, a more exclusive feel, and in practice be more like a mini version of business class. On evaluating the specifications “Business-Lite” would seem a more accurate description of the service to be offered than “premium economy”. Most importantly, for long haul passengers, the seat pitch will be set at a generous 41 inches, with more legroom than any other Australian airline. There will be in-seat power and a USB outlet

for charging personal electronic devices. Guests will be given an amenity pack that includes luxurious blankets, pillows and skin care products. To put the 41 inches of seat pitch into perspective, international long haul economy pitch is set at 32 inches, and trans-Tasman business class at 38 inches. Seat width in premium economy will be 19.5 inches compared with 18.5 inches in long haul economy and 23 inches in the current long haul business class cabin (which will be expanded to 28 inches as from November 2015). Just like in business class there will be a plated meal service tailored to each guest, accompanied by a selection of wines from the business class cellar. There will also be a larder stocked with an assortment of alcoholic and non-alcoholic beverages, light meal options and snacks for selfservice, exclusive to premium economy guests. The larder will be replenished throughout the flight. Crew will be trained to premium service standards. Pre-flight there will be dedicated check-in, priority boarding and priority baggage of up to 64 kg, enabling guests to speed through airport formalities.

Part of a Wider Revamp Virgin Australia Chief Customer Officer Mark Hassell said: “We are confident that this will be the best premium economy experience flying from Australia across the

Pacific.” Guests will be able to choose different variations of their meals, with different garnishes, along with the time and speed of service. The premium economy redesign will be rolled out with the airline’s new business class suites also launching on the Boeing 777 fleet later this year.

Conclusion Virgin Australia does it again. Its “business-lite” fares and service are bound to be a big hit with SME owners and managers, corporate and government travellers alike, be they traveling for business or pleasure.

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Renewing Retail Leases at Expiry the Tide Turns in Tenant Favour r

by Peter Southwick

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Introduction

n the July 2015 issue of Spark Magazine we looked at renewal at lease expiry for commercial and industrial tenancies. This article focuses on renewing retail shop leases at lease expiry, with a particular focus on premises in large shopping centres.

Locational Goodwill Retail leases are a separate beast because most retail businesses have “locational goodwill”. This could be defined as “a benefit accruing to a retail business due to its specific location and passing customer traffic, due in part to circumstances not entirely of the businesses own making”. As an example of locational goodwill, consider a coffee shop, on the sunny side of the street in a corner position, adjacent to high quality retail stores and offices, with no other coffee shop competition nearby. In the case of the coffee shop, its business survival and profitability are partly attributable to its specific location. This contrasts with an office tenancy, which in most instances can be relocated to another place without harming its customer base or turnover. In addition, many retail fit-outs are high quality and expensive to install. Most of these fit-outs need at least ten years to be written off. Many shopping centres will only

offer five year leases, thus putting the retail tenants in a difficult position when the lease expires.

Large Shopping Centres – The Realities Within the market for retail shops there are various sub-categories, the most important and plentifully being large shopping centres. A chat with any tenant in a large shopping centre is likely to leave the inquirer flabbergasted at what harsh and unmerciful places they are for retailers, with the centre managers ruthless in their pursuit of rent and outgoings. The value of commercial property is directly related to its net earnings capacity. Every one thousand dollars of additional rent translates into an increase in a property’s value of between $12,000 and $15,000, depending upon the

market at the time. It is for this reason that property owners fight so hard to maintain and increase rents.

On Line Threats As a background to understanding rent negotiations in major shopping centres it is important to appreciate that these giant, multimillion dollar, often internationally operated, centres are under increasing threat from the world changing internet. Online shopping is reducing in-store retail spending and turnovers are falling for “bricks and mortar” based retailers placing downward pressure on rents and the market value of shopping centres. This in turn can be seen in falling share values for major shopping centre owners.

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“Shopping Centre owners know this and take advantage of it.”

The Challenge The main difficulty for retailers, who are often “locationally and economically” captive in shopping centres is that their true negotiating position is severely restricted at the lease end. Retailers are not free to leave, often due to large fit-out debt and also simply because there is no plausible relocation option. Shopping centre owners know this and take advantage of it. The exception is those owners who have several or many shops, perhaps a whole chain, who can make strategic capital deployment decisions. For example, “the rent is too high here, we will move our fitout and staff to a centre where we get a fairer deal.” The single shop owner finds this decision much more difficult.

Key Tips for Getting a Fair Rent at Lease Renewal in Shopping Centres 1. Be willing to walk away/relocate if a fair deal is not offered. Retailers sometimes ignore the reality of past or present trading levels. They may be trading at a loss but simply refuse to walk away, knowing that debt to the bank would remain. The business may be their lifestyle, job and superannuation. Optimism or the “she’ll be right” attitude can be strong and often there is a false belief that things will turn around. It is important to take a dispassionate “net future cash-flow” approach to the go, non-go decision.

2. Employ a lease renewal expert. All retail leases in Australia are subject to State based retail and commercial acts of parliament which set the rules for leases and negotiations. These various acts are complex and often promise tenants’ rights that are difficult to understand. Expert lease negotiators (remember from the last article they are not found in the large real estate companies), understand the legislation and a good one will know what rents are being paid in the shopping centre and other shopping centres by tenants in similar or comparable positions. They will know the types and structures of deals being done.

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A general adviser is not enough. It must be someone who specialises in large shopping centre lease negotiations. Often these experts will advise tenants on a “percent of rent saved” (in the order of 5% to 10%) basis, so can effectively “pay for themselves”. The average tenant has little or no competency to negotiate on their own with centre managers who are skilled and trained in how to extract the maximum from tenants, and practice every day. The centre managers can afford to engage the very best lawyers and other advisers. Without good advisors tenants are “lambs to the slaughter”. The outcomes an expert adviser might achieve for a tenant in addition to or as an alternative to a rent reduction might include: a five year option for renewal; shopping centre contribution to a mid-lease fit out refresh; or even contribution towards expert retail advice to lift sales performance. It is unlikely any of these will be offered unless asked for rand some may even be denied as being available but they are! The expert may also give strategic lease advice, for example, planning for an eventual move to a another location at lease expiry.

3. If there is a problem with profitability and turnover deal with it early. Shopping centre owners prepare budgets well in advance of rent reviews. If a business is trading poorly it is prudent to speak with the centre manager and advise them of problems. They can sometimes assist with increased marketing expenditure targeting a troubled business and some will offer to pay for expert advice. The key point here is that if the centre owners know a business is preforming poorly they are less likely to seek a large rent review, leading to a vacancy, if they can prevent it.

4. Appreciate that the internet is rapidly reducing retail spending in shops and that rents must fall in large shopping centres. Whilst this will be denied by owners, it can be clearly seen in the rising retail expenditure percentages via the internet. Shopping centre owners need tenants and without them the centre’s value falls. As each major chain goes into liquidation or closes, as ABC shops has just announced, the value of an in-situ tenant to shopping centres rises.

“...if the centre owners know a business is preforming poorly they are less likely to seek a large rent review, leading to a vacancy, if they can prevent it.”

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“Retailers have much more power then they realise and to get a fair occupancy deal must be well advised, informed, and negotiate hard.” 5. Develop an alternative. There are a range of actions a tenant can take: »» Open another shop during the lease, preferably out of the shopping centre. »» Develop and nuture a high quality data base of customers. Often customers will follow an excellent business to another location. »» Have a fit-out from the start which is designed with relocation or portability in mind. »» Develop an internet based sales platform, independent of a shopping centre. Until a retailer has an alternative there cannot be a fair negotiation.

6. Set the ideal occupancy cost. All retail businesses have different gross profit margins. Owners should know what percentage of turnover can be paid in relation to rent and outgoings. Tenants should not agree to leases outside this strict framework. It is best not to enter into or renew leases with unrealistic turnover requirements or where a store cannot be profitable on current turnover.

7. If the business is big enough, get an option for a lease renewal. Most of the large shopping centre owners will say they do not grant options. However, they do, especially for larger multi-shop owners, or very expensive fit-out tenancies. One option of even five years will often allow a retailer to fully amortise, or write off the high fit-out costs and accrue the benefits of its locational goodwill.

Conclusions The power in lease negotiations has historically rested with shopping centre owners. As the world of retailing is being changed by the internet, the balance of power is shifting back towards retailers. Retailers have much more power then they realise and to get a fair occupancy deal must be well advised, informed, and negotiate hard.

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.

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The Anatomy of a Winning Facebook Ad r

by Kristina Mills

Introduction

rmed with the right knowledge and approach, Facebook advertising can be a lucrative source of leads and sales for SMEs. Many advertisers though, have a love/hate relationship with it. On one hand, they know it’s potentially lucrative. On the other hand, many find that their results aren’t what they had hoped. With that in mind, here are some tips to help SMEs create a winning Facebook advertisement (or “ad”).

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1. Define the business objectives. »» Does the business want to attract direct sales online? If companies sell products that cost under $100, running ads to a sales page can work. If the products or services are over $100, consumers are more reluctant to buy instantly as they don’t know the business. Instead, send them to a landing page where they can opt in for more information such as a webinar, a video series, an ebook or a white paper. »» Does the business want people to make a purchasing enquiry immediately? If the answer is ‘yes’, the business should ensure that its ad is highly targeted (both in the targeting and in the copy) to people who are ready to purchase right now. The cost per lead may be higher with this objective, but the cost per sale will be lower. »» Does the business want to start building a large list of people who are likely to purchase in the future? If ‘list building’ is the objective, the company can be slightly more generic in its targeting and copy which will reduce the cost per opt-in and increase volume of leads.

2. Know who the business wants to attract The more specific the business can be the better. Get very clear on who the customer avatar is. »» How old are they? »» How much do they earn? »» Where do they live? »» What frustrations do they feel? What are they frightened of? What are they angry about? »» What are their interests (refer to ‘targeting’)?

3. The Offer If the business is selling a product under $100 direct online, make a ‘today only’ offer where they get a massive discount or a massive amount of value-added bonuses

for acting now. Remember, the offer needs to have a limited time frame, and be of massive perceived value to the consumer. If the business is offering an ebook or white paper or something else free, make sure it does the following: »» Offers a specific solution to a burning pain prospects are struggling with stress on the word ‘burning’ – the more hurtful the pain is, the more urgent it is for them to find a solution. »» Is unique. There are so many ebooks floating around that reveal the “7 ways to lose 10kgs in under a month” or “10 tips to sell your home for more”. Instead, the ebook might be …

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“10 simple tips to add $50,000 to the sale price of your Paddington Terrace home … without spending more than $2,000” »» Is intelligent. Remember, this opt in offer is a vehicle to showcase the business as expert so be sure that it gives customers insight into how knowledgeable the company is on the subject matter and the results it achieves for customers.

4. The Photograph The photo of individuals featured has a massive bearing on click through rates. Here are some quick tips: »» Use a bright colour photo so it stands out. »» Ensure that less than 20% of the photo area is comprised of text. »» Something that is unusual or outrageous stands out. »» Feature an image that relates to the audience e.g., if targeting doctors a photo of a doctor in the ad will likely be more successful than other photos.

5. The Headline A photograph will attract their attention. The headline will make readers decide whether or not they want to read on. So it is worth spending quality time dreaming up a powerful headline. Three different types of headlines that work on Facebook: »» Offer focused headline: Run a headline that focuses on the

FREE offer and reveals what problem it solves. »» Struggle focused headline: Struggling with ……? »» Cheeky or curiosity building headline: Adding humour, cheekiness and teasing the prospect a little, often gets more click throughs. These types of headlines are great for maximising click through to the landing page. The challenge is, that businesses may find that the conversion rate from clickthru to opt-in is lower than they would like it to be.

6. The Copy Great Facebook ad copy answers the following questions: »» Who are they? Flag them at least once in the copy. »» What are they struggling with or what do they hope to achieve? »» What is the solution to their struggle e.g., the lead magnet / opt-in offer. »» What does it do for them? How will the lead magnet give them an “aha!” moment or fix their problem? »» How do they get it? What’s the next step? Always feature a call to action. It sounds selfexplanatory but the simple act of putting the words ‘click here’ will often boost responses. »» Notice the text description at the top. See how it flags the target market. A business running an ad that targets nurses, for instance, flagging them in the text description will grab their attention much easier simply putting a text description.

7. The Ad Format Facebook allows companies to create ads either through the Ad Manager or the Power Editor tool. The Power Editor tool allows users to feature longer headlines and more text - which is a good thing. There’s also the opportunity to either create ads that look like posts or turn existing posts into ads.

8. Targeting The Facebook Ad Manager offers an enormous variety of targeting options. The more accurately businesses target their audience; the more sales will likely eventuate. A good rule of thumb is to ask: »» What terms are they likely to be interested in that relate to the company’s product or service or the problem that they are having? »» What other products/services that aren’t in competition with what the business is offering are they likely to need? For instance, if the business is a builder and targeting people who are renovating their homes, they will also be looking at design ideas, garden ideas, hardware, building materials and home decorating ideas and possibly mortgage providers to help them with finance. »» What television shows do they watch that relate to the company’s product or service? If they’re renovating, they might watch “The Block”, for instance. »» What magazines do they read? »» Which of the major competitors do they follow?

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Once the business has that list, it should add these to the “interests” section in the Ad Manager.

Is the problem the Facebook ad or the Lead Funnel? Advertisers sometimes have a really powerful Facebook ad that gets a ton of click throughs but if the rest of their lead funnel isn’t performing, they’re wasting their advertising dollars. Here are three of the biggest mistakes that businesses make with landing pages: Mismatch between copy in the ad and the headline Make sure that the headline is an extension of the key point that is mentioned in the ad and uses similar copy. If it isn’t, consumers will click away without opting in. Boring bullet points that don’t have punch What’s more enticing? “How to improve your Facebook advertising results” or … “The big secret about what’s working right now for attracting high quality leads using Facebook ads. It’s not what you think. And it’s different to what was working last month.” See how the second one is way more specific and way more intriguing. It arouses curiosity and promises the reader something that they’ll learn something they don’t already know. Not enough social proof Make sure you also include some details about the company, a logo and ideally some testimonials.

There is a lot of advertising noise online and consumers are more wary than ever, so sending people to a landing page that doesn’t have details about the business or what its expertise is, will detrimentally impact results.

And what about the email sequence? Most people purchase after the 8th contact with a company so the more time the company spend providing them with valuable information via email, the greater the chances that they’ll purchase. With that in mind, companies can send out a series of trust building emails. This will help customers get to know the business, like and trust it.

Conclusion On a final note, Facebook advertising is one of those advertising mediums that if companies commit to fully, and learn how to master, monitor and measure their results, it can pay very good dividends. Results will be directly proportionate to the investment.

ABOUT THE AUTHOR Kristina Mills is an accomplished direct response copywriter who specialises in creating digital marketing campaigns and lead funnels that sell. She develops Facebook advertising campaigns and trains people how to make Facebook advertising work for them. www.kristinamills.com

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Source: http://www.hollowaytravels.com/

Sponsorship Return On Investment r by Barry van Beurten

Introduction

illions of dollars are pumped into sports sponsorship each year. But how much of that sponsorship was spent effectively? Recently Emirates Airlines and several other companies decided not to renew their marketing deals with FIFA. An Emirates executive was quoted as saying:

“I’m not sure that the bang for your buck is that good, to be blunt…. you don’t go on the shirt of anyone, so you don’t get that recognition. If you ask people to recall who are the sponsors of these events, you’d be surprised actually how many people can’t actually recall them.”

Few companies spend anything measuring their sponsorship return on investment (“sROI”), but they do track the impact of advertising. As media is changing and offering more channels to the market, measurement of sROI and its value to a company warrants greater consideration.

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SROI in Practice

Case Study

In a US survey (2007) over 50% of marketers admitted that they had no written goals for sROI. An earlier survey revealed that just 7% of senior-level financial executives were satisfied with their company’s ability to measure marketing sROI. Less than 10% had allocated a budget specifically for the purposes of measuring marketing effectiveness.

A tertiary institute had been sponsoring three significant national events for more than 10 years and were wanting to evaluate the effectiveness of their sponsorship activities.

Many organisations struggle to identify the metrics they should be using to measure the true sROI against every dollar spent.

Key Considerations Here are some things for companies to consider before engaging in sponsorship: 1. Identify the target market and know what appeals to them. 2. Conduct an analysis to see how competitors are spending their marketing budget. 3. Ensure that sponsorship does actually fit in with the short and longer term business strategic plan. 4. Determine what the business objectives are before signing a sponsorship deal and ensure that all parties’ objectives are aligned. 5. Determine tactics across the channels (sales force, consumers etc) and how the event can be leveraged in the short and long term. This may sound simple, but many companies only considered the first point before entering into a sponsorship agreement.

The study looked at the levels of awareness of the sponsorship activities, the perceptions of the sponsorship activities, the influence the sponsorship and event had on the institute and the overall return on investment for these sponsorship and event activities. The end result gave the institute sufficient confidence to make decisions about to either continue the sponsorship or identify other avenues to explore. In this case the research sample was 450 people and the cost was around $25,000.

»» One company takes into account the event awareness, perceptions and likelihood to purchase. »» Another allows companies to isolate the impact of sponsorship from the marketing mix and focuses on outcomes (longer term) rather than inputs. They measure six metrics to achieve this. »» Yet another is more focused on the overall communications mix. Their approach is more focused on recommendations to improve both creative messaging and supporting media strategy. A company may start with a blank sheet of paper and design a specific model to measure sROI, or they may suggest an “off the shelf” solution. The best approach depends on company objectives and how the findings will be used.

Conclusion Can sROI be Measured? Companies have historically measured sROI by tracking televised logo time and surveying people’s awareness of sponsors both unaided (i.e. asking them who the sponsors were with no prompts) and then aided (i.e. by giving a list of possible sponsors). Some market research companies have developed specialist expertise in this area due to the increasing importance of the sector, including their own sROI models. The methodologies vary in approach and choosing the ‘best fit’ might be difficult. Here are a few examples:

Considering the prominent role of sponsorship in representing the core values of a business brand, sROI should be measured and reviewed regularly. The review is best based on high quality, professionally undertaken research. For that companies must choose the best fit researcher.

ABOUT THE AUTHOR Based in Christchurch, New Zealand, Barry is the Founder of The Research Broker International, the world’s first and largest market research brokering company. He is the author of several articles on market research, and previously worked in the pharmaceutical industry and health management.

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Itâ&#x20AC;&#x2122;s Time to Take Charge of Change r by Linley Watson

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Pressures

But business as usual is no longer enough. Just to survive, organisations must keep pace with the rapidly changing global marketplace, respond to industry and competitive pressures and adapt to shifting customer demands. They must embrace new technologies, continuously look for more efficient ways of operating, find ways to innovate and more. The amount, scope and pace of change required can be relentless, overwhelming and exhausting.

Equip for Change Given that change is inevitable and it is not going to slow down, there is an urgent need to educate and equip people to take charge of change and own their personal change experience. “Everybody has accepted by now that change is unavoidable …but change is like death and taxes — it should be postponed as long as possible and no change would be vastly preferable. But in a period of upheaval, such as the one we are living in, change is the norm.” — Peter Drucker, Management Challenges for the 21st Century (1999)

Put your Own Mask on First Just like in the pre-flight safety demonstration when passengers are directed to put on their own oxygen mask first before assisting

The Change Curve People transition through four stages as they adapt and adjust to change Positive

Exploration:

Start to examine and explore the new opportunities a change will bring

Impact

eaders are always under pressure to get more done, with fewer resources, in a shorter period of time – that’s just business as usual.

Resistance: Denial:

Choose to not believe Or acknowledge what’s Really happening

Negative

Push back, avoid or fight against a workplace change

Past Focus

Only then can leaders be role models and provide the leadership, direction and support their people and their organisation needs to not only survive but thrive in challenging, changing times.

The Emotional Journey through Change During the change process people experience a wide range of emotions. The “Change Curve” evolved from a combination of psychological models from KublerRoss, Lewin and others, and is

Show motivation to pro-actively support the change

Future Focus Time

others, leaders need to be in control and look after their own wellbeing first. That doesn’t mean looking after number one to the detriment of others, it means purposely developing a set of strategies, tools and resources to help them adapt and manage their own emotions when under the added stress triggered by change.

Commitment:

Reference: Derived from Kubler-Ross,1971

widely accepted in the field of change management. It is based on the principle that there are predictable patterns of emotional reactions to change over time. The model identifies four key phases or stages that people move through as they come to terms with change - Denial, Resistance, Exploration and Commitment. By understanding the impact change has on people’s emotions and behaviours, leaders can identify and consciously control their own responses as well as offer the most appropriate guidance and support for their people as they navigate their way through the process. Although the patterns of behaviour might be similar, everyone progresses along the curve at their own pace. The idea is to flatten the curve and smooth the transition, helping people move through each of the phases more positively, pro-actively and quickly.

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“Everybody has accepted by now that change is unavoidable …but change is like death and taxes — it should be postponed as long as possible and no change would be vastly preferable. But in a period of upheaval, such as the one we are living in, change is the norm.” Peter Drucker, Management Challenges for the 21st Century (1999)

Moving Beyond Resistance While most move on, some people get stuck in the resistance phase. Resistance is often rooted in fear and a lack of understanding so education and regular, compelling communication that addresses the “why” behind the change can help people to get with the program. In any organisational change it is estimated that about 20 per cent of people are ready and willing to embrace change, 50 per cent are neutral – waiting to decide which way to lean and around 30 per cent are resisters, desperately hanging on to the status quo or deliberately trying to make the new way fail. This group of resisters are hard to ignore but giving them extra attention often just reinforces their problem behaviour, causes the rest of the team even more stress and slows down the change process. It makes more sense for leaders to focus their attention on those 20 percent of advocates who are up for change and engage them in influencing the 50 percent of fence-sitters whom it is necessary to win over. It is not essential to have buy-in from everyone to move forward

and progress the change. For a good percentage of people, buy-in and commitment comes later after the results are in. Like change itself, resistance is predictable, inevitable and even necessary but leaders need to consider what resistance is reasonable and deal with it appropriately. They should also consider their own attitudes and behaviours and whether they’re leading their team into change or into resistance.

Develop Emotional Resilience Transitioning through the phases of change can be uncomfortable and stressful and lead to burnout with lingering difficulties. The antidote is to become more emotionally resilient. Emotional resilience is about having the mental toughness and emotional strength to cope. It’s about being able to adapt, to last the distance and maintain a sense of wellbeing when facing the adversities of change. Most of all it’s about self-awareness and self-control, taking charge in challenging times, recognising what situations cause stress, being able to make good decisions about how to respond and having

resources to call on for help. Common change-related workplace causes of stress include restructuring, changing roles, implementing new systems and processes, lack of clear direction, customer complaints, ambiguous circumstances and relationship issues with colleagues. The key is for each individual to identify what specifically is causing them stress then recognise the physical, emotional, mental and other reactions that are being triggered. Armed with awareness of their causes of stress and reactions, the next step is to find and acknowledge personal strengths, strategies and resources that can be drawn upon to help them face and deal with these situations successfully. Things like positive self-talk, going for a walk, recalling past positive outcomes, researching best practice, talking with a friend, practicing mindfulness, listening to music and asking a colleague or partner for help are all things that can work.

Focus on What You can Control and Influence Nobody likes to feel “done to” and feeling powerless is a common complaint when navigating

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through change. It doesn’t help that there’s a tendency for people to spend the majority of their time and energy worrying about and reacting to those things over which they have no control instead of those things they have. In his famous book “The 7 Habits of Highly Effective People,” Stephen Covey describes a Circle of Concerns which contains all the things people are concerned about. Within that is a Circle of Influence that includes those things that individuals can actually influence and control.

Transitioning through the phases of change can be uncomfortable and stressful and lead to burnout with lingering difficulties. The antidote is to become more emotionally resilient.

which is about taking initiative and responsibility. People may have no choice about the major changes taking place in their workplace but Covey argues that they do have the freedom to choose how they respond to situations and circumstances and the opportunity to expand their sphere of influence and control. One thing that everyone has control over is their mindset. People can choose a negative, reactive stance to change or take a positive, proactive stance Conclusion and take control of their own attitudes, behaviours, language and Successful people and businesses “Be Proactive” is Covey’s first habit, ultimately their results. never stand still. Change can be hard but it can also be exciting, invigorating and full of growth and opportunities for those willing and What causes able to embrace it. you concern What you can influence What you control

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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The Perfect Pitch r

by Glen Carlson

ISSUE NO.3 AUGUST 2015

Introduction

When the penny dropped and he realised this, instead of cutting out photos of money and making a dream board to help him shift his mindset, Lazo did something the vast majority of people never bother to do; he started to perfect his pitch.

ME owners get what they pitch for and are always pitching. Often business owners don’t have a clear answer to the common question “What do you do?” Yet a compelling answer to this question is often the biggest differentiator between success and failure. With 49 per cent of the Australian economy made up of small businesses and about 80 per cent of start-ups failing in their first year, a perfect quick pitch could be the ticket to inbound opportunities, business growth and triumph. Pitching isn’t reserved just for raising capital or landing major deals like many would think. SME owners are out in the field pitching themselves every day – at networking events, to the media, potential clients and even at backyard barbecues. Bad pitching can cost them a fortune. But a great pitch can open many doors and opportunities, generate leads, increase sales and boost to a business’s bottom line.

Differentiation It isn’t just about having a pitch that works, but having a pitch that differentiates typical business owners from the crowd. That’s what Lazo did to change the face of his business. When people don’t differentiate themselves, or their businesses, they become a commodity and because of the oversupply of personal trainers, by putting himself in that category and leaving it at that, Lazo was positioning himself as a commodity.

The Pitch Designed by freepik.com

Case Study Lazo Freeman, a personal trainer. Before he knew the power of the pitch and how to deliver it, he was a typical example of a traditional business owner struggling to get ahead. He did what most of the millions of small business owners do when asked “What do you do?”. He said “I’m a personal trainer”. While he looks the part and the transformations he creates for his clients are truly remarkable, Lazo didn’t stand out in the competitive sea of personal trainers. “Like so many small business owners, I was struggling financially – on the brink of broke - and despite being great at what do, I was barely able to charge a 5 per cent premium over other personal trainers,” Lazo says. It’s a common scenario seen time and time again. But when someone can pitch well - and that’s to simply answer the ageold question “What do you do” - they’ll get what they pitch for. Lazo got five times his annual income in a year. That’s why business owners should always be pitching.

Now, when someone asks me what I do, I say: “I’m a fitness trainer specialising in radical body transformations for successful London businessmen who look powerful in the boardroom, but ordinary in the bedroom,” Lazo says. People will only pay for value they can recognise. If they can’t get a prospect to recognise the full value of what a business is offering from the outset, the customer is likely to negotiate on price or shop around - or both.” Dropping prices to win a deal kills profit and signals the beginning of a desperate race to the bottom that ends in either the business closing its doors or suffering perpetual mediocrity. But Lazo stands out. People chuckle when he delivers his pitch. It is a light-hearted quick pitch that starts conversations that would never have happened when he was just a “personal trainer”. In less than 140 characters – that’s equivalent to a Tweet - he is able to capture people’s attention and decommoditise himself from the masses. He now charges a flat fee for a 12-week transformation, limits the number of clients he will work with and makes five times as much money in half the time; and all from changing his pitch.

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4 Steps to Craft a Remarkable Social Pitch Here is the process Lazo followed:

Step 1: SAME This step is counter-intuitive as it demands the pitch to open with the broadest and often most uninteresting category possible. For Lazo, this has him opening with his usual “I’m a personal trainer”. A common mistake here is to try and come straight off the blocks sounding unique or different. This just confuses people so it’s best to open with something simple and easy for anyone to understand.

Step 2: CLAIM This step is about presenting what the product or service offered ultimately delivers. For Lazo, what he does is fitness training, but the ultimate result he delivers for his clients is a “radical body transformation”.

Step 3: PEOPLE This step is about identifying a specific niche. For Lazo, his ideal customers are “successful London businessmen”. As soon as the words come out of his mouth the listener will be attempting to relate themselves to what Lazo is saying by asking, “Am I a successful London businessman?” or “do I know a successful London businessman?”

If the answer is “yes” to either of those questions the rest of the conversation becomes very relevant to the listener.

Step 4: PAIN The final step in a perfect quick pitch is to highlight a particular frustration or problem that the previously identified target market is likely to be experiencing. Lazo knows his ideal clients are highly self-conscious when it comes time to take off their shirt, even around people they are close to, and so he’s rolled that trigger nicely into his pitch. A common mistake people make when attempting to rework their pitch is thinking it needs to create a profound, ground-breaking, industry-disrupting, “We’re sending a woman to Mars” kind of an experience for the listener. When the pitch inevitably fails to reach these lofty goals, they give up and revert to what wasn’t working in the first place.

Conclusion Fortunately, a Hollywood blockbuster of a pitch isn’t needed at all and the whole point of a social pitch – that is, a response to the question “What do you do?” - should be crafted to do one thing and one thing only: Capture someone’s attention.

When a pitch consistently engages the attention of the listener, it becomes easy to steer the conversation in a way that communicates the true value of what’s on offer, and that simple opportunity has the power to change everything.

ABOUT THE AUTHOR Glen Carlson is a successful entrepreneur, speaker and cofounder of international training company Key Person of Influence, which operate in the UK, USA, Singapore and Australia it was dubbed “The World’s Leading Personal Growth Accelerator” by the Huffington Post. Best known for his expertise in the small business space, Glen has worked with more than 2000 entrepreneurs ranging from start-ups to CEO’s of billion dollar brands enabling them to become more valuable, visible and connected in their industries.

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Business Meeting Hot Spots r

The very popular booths at the InterContinental Melbourne The Rialto

by Paul M Southwick

ISSUE NO.3 AUGUST 2015

Office, What Office?

source: whitepaper.com.au

ith so many people now self-employed or working as consultants, freelancers or on a project basis there is less need for physical offices. ”Suits” may also find offices stifling and boring with endless meetings, long email chains, and formalities. Not surprising then the growth of cafés or similar spots as “coffices” or “teaffices” where coffee, hot chocolate and tea are served where someone else pays the rent, utilities, salaries, buys the furniture and keeps it clean. Here we take a look at Melbourne’s top spots for that relaxed, informal chat, or perhaps business deal in the Melbourne CBD.

Sofi’s Lounge, Sofitel Hotel, 25 Collins St. Sofi’s lounge is top on our list for several reasons. First, it has a perfect location at the top of Collins St, just down from the state parliament, on a free tram zone stop, and as part of a major international hotel group. This is the meeting place for some of the most influential executives both public and private sector in Melbourne. Second is the quality and variety of spacious seating available, from

Sofitel Melbourne on Collins

wide couches to two person tables and large “meeting” type desks seating six or more. The internal ceiling is very high which gives an impression of grandeur and there is always an art exhibition in residence on the large internal walls to the north. On the south side there are huge widows with views of all the important people arriving in their European luxury sedans and sports cars. On the West wall there are again huge widows giving views to the nearby shops and food court. Importantly, there are several quiet

spots and the tables are so far apart that those seated next door cannot hear your secrets. Third there is great table service and reasonable prices, be they for teas and coffees – which always come with a little treat, light snack food or the famous “tea and cakes.” There is also a full range of free newspapers and leading fashion or travel magazines. Is it any wonder that many successful consultants refer to Sofi’s as their “corporate suites”? Some even have their corporate brochure photographs taken there!

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Intercontinental Hotel, 495 Collins St. Like two of our other hot spots the “Intercon” as it is known benefits from being part of an international hotel chain with all the quality controls and brand positioning that involves. There is always a helpful and greeting doorman (sadly no women have been spotted filling this role yet). Seating and service are of the highest standard. The most sought after places are the booths that tend to fill very early in the day and stay occupied for long periods reminding one of the German system of reserving seats around the swimming pool with their towels at holiday spots. One big advantage of the Intercon is that is also has restaurants and bars to where one can progress after business is done. This is one of the best-managed hotels in Melbourne and holds the monopoly for business meetings on lower Collin St. It is also popular because it is the one spot in Melbourne from where you can always get a cab to the airport.

InterContinental Melbourne The Rialto

Strozzi, Ristorante and Caffeteria, 333 Collins St.

Wild West saloon, only much more classy. There is also a generous outdoor area for the smokers.

Strozzi is probably the most popular and famous spot for business coffee’s in Melbourne, situated as it is about half way down Collins St, and close to the intersection with Elizabeth St. Above it are some major corporate offices e.g. Link Market Services.

Service is excellent from a central island and one can choose in doors or out doors and delicious light meals, including both breakfast and lunch.

Strozzi is a very busy place with a long deep design, kind of like a

This is a busy spot that exudes “deals done here – and quickly”. Being so popular it can be a little hard to hear, but that is part of the “see and be seen” deal.

Entrance to Strozzi on Collins

ISSUE NO.3 AUGUST 2015

Australian Institute of Directors, Level 26, 267 Collins St.

Grand Hyatt, 123 Collins St. This is a high-end hotel at the heart of Melbourne and a favorite accommodation choice for those who wish to shops Melbourne’s brand name stores at the Paris end of Collins St. Accessed is via multiple entrances and with views over reception. There are multiple tables, chairs and little quiet spots for eating, drinking and chatting. Around the corner from the “coffice” there is a classy in-house bar where post or in-meeting cocktails are a must. Service and food are also of an international hotel standard and it’s just five minutes to anywhere.

Perhaps not strictly belonging in this group because one cannot enter for free but must be a member of the organisation is the Institute’s brand new (opened in June) lounge. This place is huge and offers non-stop free coffee and biscuits together with the most amazing views over the MCG, Yarra River, Melbourne Bay, and CBD and towards the port.

Australian Institute of Company Directors

There is a huge range of spaces to choose from with brand new furniture and multiple rooms for hire for small meetings or large groups. Open 8am to 6pm every day Institute membership may be worth it just for entry to these premises. And best of all if you are a member in Melbourne you can use the (now relegated to number two) facilities in Sydney and other cites for free too.

Australian Institute of Company Directors

Conclusion It’s said that some of the biggest deals are done and consulting contracts agreed in Melbourne’s cafes. So if its business you need to do, as guest or host, give one of the above a try. If you attend these spots regularly you might just be given a “Stammtisch” with “Stammgast” treatment.

Grant Hayat Melbourne

They can also be a great place to meet potential clients, who are also based there.

SPARK MAGAZINE

Who Keeps the Books? r

by Morris Kaplan

A Common Story

hen Joshua Berman* launched his online retail business he believed he understood the key metrics: conversion rate of website visitors to buyers; average dollar value per sale and percentage of return customers. Twelve months after launch, sitting in his accountant’s office, Joshua was frustrated at what he was hearing. “Your top line is looking good but unless you make some changes in the business, you’ll run out of money and be at risk of trading while insolvent, that’s very serious. Oh and by the way, your accounts are in a mess: you need to ensure that your personal drawings and business expenses are correctly handled.” Yet, Joshua Berman’s business metrics were on track and his margins looked healthy – on paper at least. He thought, “Why am I paying so much in accounting fees only to be told that I am going broke?” He did however acknowledge that, despite being tech savvy, he used his accounting software system at a basic, rudimentary level to record GST liability.

ISSUE NO.3 AUGUST 2015

The brutal facts were that stock returns and poor credit control were eroding his margins and cash flow was critically tight. His choice of key metrics proved to be woefully short in providing the information he needed to build a sustainable business.

Ways a bookkeeper can help improve profit

Numbers as the language of business

Cash is the lifeblood of business, which makes receivables “the heart that pumps the blood”. The aging report, which shows receivables by due date, will reveal how old each receivable is. When volume is up, the business owner should check the aging report as much as once a week. If a receivable is past due, a system should be developed to ensure the customer is called as soon as possible to find out why.

Business is a numbers game and the business owner or entrepreneur’s job is to keep track of the numbers that matter. But top line metrics are not enough. Understanding the financial implications of the metrics is paramount. A rear-view accounting analysis may not prevent disaster. Because bookkeepers tend to be the accounting professional most often working ‘on the books’, they can be the ones best placed to shine a light on business performance. For example, monthly financial reports are essential but they first need to be validated. Before reviewing monthly financial reports the business owner should have the bookkeeper reconcile records to the bank statements. This ensures that all cash transactions from the month (as shown on the bank statements) are recorded in the accounting system.

If the business is not generating the amount of profit that owner(s) would like and deserve, then an outsourced bookkeeper may be a solution to providing key reporting, for example, a regular aging report.

Savvy, successful business owners do not take cash flow for granted. Generally, the smaller the business, the more focus there is on cash flow. The reason is that smaller businesses have fewer resources to fall back on. Business owners need the money to come in, so that they have sufficient money to meet payroll costs, GST and to be able to draw sufficient funds to live on.

minute spent doing the books is time they are not spent managing and leading the business. Business owners often don’t want to hear the bad news and will focus on doing the things they are good at or like doing, perhaps thinking that this will solve the problems of the business. However if a business is suffering problems, this will show up fairly quickly in the level of outstanding creditors. If this area is not constantly monitored, the business can reach the slippery-slope quickly, when it then becomes more difficult to address the problem. Joshua’s initial response to his accountant’s’ dire warnings was to ask a colleague what she did for bookkeeping. Her advice was to contact the bookkeeper she used but to also get a second quote for bookkeeping services. After all, what is needed is more than just someone to do the BAS returns. So why not get someone to provide the decision-maker with a prudent case for hiring them to produce meaningful, timely and valuable financial reports?

Selecting a bookkeeper

Helping the business get a loan

SME owners should take bookkeeping off their list of responsibilities because every

Joshua, as a case in point, needs funding support. He knows that banks have robust criteria in

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“Offering business advisory services not only allows the professional to deepen relationships with clients and help retain them, but also can distinguish the practice from other bookkeeping firms.” lending to small business and his accounts are not in good shape. One key stop for a progressive bookkeeper is that of offering clients assistance in securing a business loan. This type of service is of value to SMEs especially as some business owners may not know the most effective way to present their business to a financial institution. »» Quantification. A bookkeeper is in a unique position to offer both a narrow-focus and 10,000-metre view of a business and its operations from a financial perspective. SME owners will see the real valueadd in a service that translates what the raw numbers into what they mean for the owner’s goals, and the implications for seeking a business loan. For example, showing the client data on the business’ recent cash flow and projections for upcoming periods – with or without external

financing – may help determine the size of any loan required. »» Presentation. A bookkeeper can help clients put together the information that will improve the chances a bank will approve a loan request. In the current banking environment, financial institutions may require independently prepared financial statements. Knowing this, a bookkeeper can help the owner be proactive and work with the business accountant to have statements verified. Business owners need assistance qualifying their financial needs, quantifying current and projected performance and presenting a winning loan package. Helping them through this type of endeavour is yet another example of how a bookkeeper can help clients solve problems and offer value-added business advisory services.

Summary As a professional intimately familiar with a business client’s financials, stepping beyond bookkeeping into a consultant-advisory role makes sense for both the client and the bookkeeping practice. Offering business advisory services not only allows the professional to deepen relationships with clients and help retain them, but also can distinguish the practice from other bookkeeping firms. *Name changed

ABOUT THE AUTHOR Morris Kaplan is a publisher (www.rainmakermedia.com.au) and business journalist as well as entrepreneur. He is co-founder of the Bookkeepers Hub (www. bookkeepershub.com.au) and has contributed to The Australian, Computerworld and the Entrepreneurs Organisation and numerous other publications.

ISSUE NO.3 AUGUST 2015

Source: http://www.ozforex.com.au/

August 2015

NEWS Foreign Exchange Perhaps the biggest news this last month has been the continued retreat of the Australian dollar against the greenback. An exchange rate of 1.05 was great for travellers to the US while it lasted but at 0.74 things are starting to hurt. Whereas exporters will be delighted their goods and services are now more price competitive importers will be wary of the coming rise to their input costs. And it is just a matter of time before the effect on consumer inflation is felt. Coupled with the fall in iron ore prices this variability of the exchange rate will inevitably require some significant rearrangements and adjustments in both the macro economy and micro SME sector. Significantly the Governor of the Reserve Bank has questioned growth assumptions in both the Federal Budget and big business strategic plans. The lucky country might be entering a period where luck plays a lessor role and the vital contribution to the economy of SMEs, especially entrepreneurs and innovators is our saviour.

GST An increase in GST is another one of those things like vote for women, refrigerated meat to Europe, marriage equality, and the introduction of GST itself that the Kiwis have beaten us to. Up until now the shame of again being behind has not been enough to convince the politicians, who unlike the Kiwis must battles changes through multiple houses of parliament (state, lower and upper) to make the structural change to taxation. But there is an every increasing chorus of high profile and influential bodies now calling for an increase in the GST rate to 15%. Even the accounting bodies CPA Australia and the Institute of Chartered Accountants in Australia and New Zealand have joined the chorus. The key questions for the public will be whether the horrible and inefficient local taxes like stamp duty on houses and cars will finally be put to death and if those

on fixed or low incomes will be properly compensated. For businesses it is perhaps time to think about the procedures required to implement a seamless increase in the rate in their systems when it comes.

Digital Disruption The term digital disruption is new but now cutting a track through almost every industry, big and small. The worldâ&#x20AC;&#x2122;s largest taxi company owns no vehicles, the largest media owner creates no content, largest retailer has no inventory and largest accommodation provider no realestate. Sadly the ABC announced in July the closure of all its 50 stores nation wide. It advised that the business is moving to a digital model. Up to 300 staff may need to find new positions. How is digital going to change your business? Will digital be a threat or an opportunity? Will you be the disrupter or the disrupted?