business networking: Frankston | Mornington Peninsula | Dandenong
March 2013 | $4.95 (GST inc.)
on the smart path networking with an agenda
OFFSHORE WORKERS SMALL BUSINESSES ARE CONTRACTING OS TO SAVE
WELCOME MAT FOR AUDITORS
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ADJUSTING THE PROTOCOLS FOR BETTER RESULTS
Business Growth Partner Proudly supporting local business
who/what/where
ISSUE 32 / MARCH 2013
FRANKSTON / MORNINGTON PENINSULA / DANDENONG
TONY MURRELL KEITH PLATT MARG HARRISON DAVID HILET MELANIE LARKE SIMON BROWN Design MARLON PLATT
Publisher / Director Editorial Director Sales Director Managing Director Material production / Prepress
Email: General: inquiries@businesstimes.net.au Editorial: news@businesstimes.net.au Advertising: sales@businesstimes.net.au Artwork: production@businesstimes.net.au Internet: www.businesstimes.net.au BusinessTimes is published 11 times a year by BusinessTimes Pty Ltd and printed by Galaxy Print & Design, 76 Reid Parade, Hastings, Victoria 3915. Postal: PO Box 428, Hastings, Victoria 3915 Tel. 03 5979 3927 Fax. 03 5979 7944
Departments News Busy Bites Networking snaps Business Directory
Inside
Columns Networking: Ivan Misner Markets: Richard Campbell Health: Mike Ellis Managing: Hamish Petrie
Are you in BusinessTimes? For advertising, contact Marg Harrison on 0414 773 153 or marg@businesstimes.net.au Make sure every business knows your business.
March 2013
BUSINESS
kING: Frankston
on Peninsula | Morningt
| $4.95 (GST
10 18 19 22
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Going green: Cash call for Carrum Downs.
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Hoax emails: Telstra warns to click with caution.
inc.)
ng | Dandeno
NETwOr
on the smart path
NETwOrkINGa aGEND wITh aN
RE OFFSHO RS WORKE
SES arE SMaLL BUSINES TO SaVE cTING OS cONTra
E MAT WELCOM ITORS OLS FOR AUD NG ThE PrOTOc
aDJUSTI rESULTS FOr BETTEr
COVER: A business failure provided Brenda Thompson with the key to helping small businesses profit from their collective experiences : P16 2155
DISCLAIMER: Information in BusinessTimes contains general advice only. No article or column has been prepared taking into account any individual reader’s financial situation, investment objectives or particular needs. Readers should personally consult professionals for advice on any matter, including investment, health and the law. While all care is taken, BusinessTimes accepts no responsibility for errors or omissions in the published material. Views expressed are not necessarily those of BusinessTimes Pty Ltd. All content is copyright.
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Partner Business Growth Proudly supporting local business
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2 | BusinessTimes Frankston / Mornington Peninsula / Dandenong | March 2013
HASTINGS
AUCTION
Wednesday 17th April at 12 noon At 7/145 Salmon Street Hastings 3 leased and vacant Commercial Premises 8 High Street. Prime office premises of 79m² with internal WC and 2 underground car spaces on separate titles. Securely leased to Peninsula News Group for 3 years commencing on 1st March 2012 showing a net return of $18,486.00 per annum to be sold as a going concern. Shop 7 No. 145 Salmon Street Office, Retail or Medical premises of 82m² in High traffic flow location right at the entrance to town opposite Western Port Hotel. Wide footpath to front, grease trap for food installed plus internal W.C. and floating plaster ceiling with concealed lighting. Includes title to 2 unencumbered underground car spaces. Potential return $16,800 net per annum when leased. To be sold with Vacant Possession on a + GST basis.
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HAST I N G S
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4 High Street Prominent Retail or office premises of 87m² situated at the very top of High Street close to foreshore opposite Library and Town Hall with floating plaster ceilings, concealed lighting and internal W.C. Includes title to 3 underground car spaces and prominent side wall for advertising. Potential return $19,500 net per annum when leased To be sold with Vacant Possession on a + GST basis.
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BusinessTimes Frankston / Mornington Peninsula / Dandenong | March 2013
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Going green requires folding stuff on economic resilience initiatives and apportionment of costs. The briefing was held in late February after this issue went to press. Previous efforts to grow green businesses included a Green Business Network established in 2011, driven by council with the assistance of the business chamber. After staging the Our Future Today, Sustainable Living Festival, council’s economic development unit concluded that while the event was well organised and presented, it was not well attended and did not capture public interest. Management of the network has been taken on by GFBC, operating as an industry driven sub-committee. It has since held a green business showcase as part of one of the chamber’s regular networking events. The unit says that the recent attraction of South East Water (SEW) has been a significant development in Frankston City’s efforts to attract green business, with an opportunity to
lure SEW’s contractors/suppliers to Frankston. Also, the expansion of the Solar Bulk Buy scheme is being investigated, with a view to rolling the program out to businesses in Carrum Downs. City officers are discussing with Asian Pacific Serviced Offices (See P. 21) the formation of a privately operated business incubator with tenants having priority access to council’s Build Your Business. However, while officers can work with Asian Pacific Serviced Offices to target green businesses, the incubator, as a private facility, would be driven by market forces. In addition, the economic development and environment departments have met with representatives of City Switch to consider implementing an energy efficiency program for office buildings in the municipality. Officers are again looking at recycled water being piped into the Carrum Downs industrial precinct from the Eastern Treatment Plant.
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to attract or grow green businesses. Last moth the city’s economic development unit asked council to fund a $170,000 five-point wishlist of incentives and marketing initiatives, including: • An audit of the sustainable industry sector ($10,000); • Development of a supply-chain analysis and matching program ($15,000); • Development and implementation of a marketing strategy for the Carrum Downs Industrial Precinct ($100,000); and • Rescheduling of a green business round-table with business and government, originally slated for last November ($15,000); and • Green business grants of $30,000 a year. While councillors were sympathetic, they voted unanimously to consider the spending in next year’s budget. A window of hope may be the decision to discuss green business at a councillor briefing
March 2013 | Frankston / Mornington Peninsula / Dandenong BusinessTimes | 5
BUSY BITES
Highway trees Frankston councillors want trees planted in the median strip of Nepean Highway between the base of Olivers Hill and the pier despite the misgivings of VicRoads and council officers. The road authority argues the median strip is too narrow and will only agree to plantings if council takes responsibility for any accident involving the trees. The councillors asked officers to bring planting suggestions to the next ordinary council meeting. Council has agreed to retain the avenue of Moreton Bay fig trees in the median of the highway between Mile Bridge and the business centre. Also, council has referred to next year’s budget the design and delivery of an entry and gateway feature of palm trees at Mile Bridge.
Tourism appointments Frankston councilors Suzette Tayler and Michael O’Reilly will represent the city and its tourism industry at Mornington Peninsula Regional Tourism board’s leaders’ forum. The appointments were decided at council’s February meeting.
hoax emails on the rise, warns telstra Telstra is warning Australians to be wary of emails asking for sensitive or personal information. Telstra’s Officer of Internet Trust and Safety, Darren Kane said it was no longer enough just to check the email address of the sender. “These hoax emails are becoming more realistic and are being sent from legitimate email addresses customers may recognise,” Mr Kane said. Mr Kane said hoaxes often evoke a sense of urgency to catch customers off-guard and described two common types of email hoaxes customers should watch out for. “The most common hoaxes are where an email contains an attachment designed to introduce malware onto a customer’s computer or device. These tend to be a PDF or a ZIP file,” Mr Kane said. “The other common hoax is where an email contains embedded links directing customers to a phishing website to gather personal details.” Mr Kane said there were a few key things customers could look out for if they believed they’ve received a hoax email. “They can log in to My Account at Telstra.com and check the information in the email against the information within My Account to make sure it matches. Or they can bring the email in to their nearest Telstra Store.”
If you suspect a hoax email: • Do not reply to it • Do not open any attachment or click on any embedded links • Delete the email Other steps customers can take to protect themselves include: • Beware of unsolicited requests for sensitive information – don’t follow suspicious links from senders or sites you don’t know or trust • If in doubt, visit trusted websites by typing the internet address (URL) into the browser address bar rather than clicking on a link embedded in an email. Save frequently used links in your favourites or bookmarks • Never respond to requests for personal information in an unexpected email or pop-up window. If in doubt, always contact the institution that claims to be the sender of the email or pop-up window • Use a spam filter to help block unsolicited and unwanted email People can also visit Telstra’s Internet and Cyber-Safety page, www.telstra.com.au/
Sweet taste of Chile comING to the peninsula The Mornington Peninsula will add to Australia’s wine-making history with the planting of grapes to produce a version of Chicha, the sweet fermented drink enjoyed by Chileans on their national day. The Chicha-producing varieties will be among nearly 3300 vines planted on the proposed twohectare vineyard in Coolart Rising Estate, Tuerong, between Hodgins and Hunts roads. Mornington Peninsula Shire is approving a
planning application for the vineyard, a house and wine-making shed after refusing a similar application from the same owners two years ago. The owners say they plan to become a fully organic producer. They have told council that once in production they expect to sell at least 5000 litres of Chicha at the Chilean Festival held each September at Sandown Racecourse.
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6 | BusinessTimes Frankston / Mornington Peninsula / Dandenong | March 2013
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A CHALLENGE TO HELP HOSPICE ... AND CYCLE IN CAMBODIA
A-frames gone
Peninsula Home Hospice (PHH) is challenging GREATER Dandenong Council individuals and businesses to become has finally banned A-frames part of a fund-raising program to help and the display of goods on hospice as well as villagers in Cambodia. footpaths in the central busiPHH and RAW Travel have organised ness district for two years. the Cambodia Cycle Challenge where After a one-month delay the people aim to reach an individual fundban began on 4 March. raising target of $6000 and then cycle Sixty traders signed a petition
440km over 11 days across the beautiful in December opposing the
�  countryside of Cambodia. bans that were due to come � �� During the cycle tour fundraisers will into force on 1 February.  � �  � undertake volunteer work that will also have a At least three months before the “” ’ � ’ ‘  … ˆ ˆ positive impact on those Cambodians who are end of the trial ban the council „ ˆ  ‡  „ ‘ � „ �
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™ “ A percentage of what is raised is then used to Visit www.rawtravel.com under Bike Tours/Chaltravel times for residents and cover the flight and accommodation costs for each lenges, fill out the online registration form and pay businesses can be improved. fundraiser for the 440km bicycle journey across the$500 registration fee (this is the fundraiser’s � …Ž‹ …‡ˆ  Bays hospital to expand Cambodia. personal contribution towards the cost of the trip).
„†ŽŽ The Bays Hospital Group’s If you’d like to know more phone RAW Travel on “This is no free holiday’� said Michod. 1300 208 245 or contact Kim Michod on 9784 expansion is on track after pay“Fundraisers will work hard to raise the money and take on the personal fitness challenge of cycling 3303 or kim @pen insulahospice.com.au ing $4.2 million for the adjacent more than 400km council-owned Mornington PHH, a not for profit palliative care organisation “As well as making a real difference to the lives Tennis Club courts in Main St. that supports people who are living at home with a of those who are dying in our own community, The tennis club is being relolife threatening illness, as well as their families and fundraisers will help Cambodian villagers in a cated to Civic Reserve. Settlefriends. Last year PHH helped more than 860 people number of ways. ment date is 1 September, 2014. who had chosen to receive palliative care at home. “It will take a special type of person to put up PHH relies on community support for additional their hand, push themselves and step outside of fundraising to help cover the costs of providing this their comfort zone in a bid to help others, both
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March 2013 | Frankston / Mornington Peninsula / Dandenong | BusinessTimes | 7
NETWORKING
1. Mt Eliza BNI meeting at Mornington Golf Club on Wednesday 6 February. From left are Phil Anderson, of Red Door Building Company, Dr Georgie Boehm, of Mt Eliza Chripractic Clinic, and Rene Pedersen, of Bayside by Design. 2. Ian Tregardh, of Blissful Bathrooms, Wayne Lock, of Swat/10X Port Phillip, and Peter George, of First Class Conveyancing.
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3. Mornington BNI met at The Rocks, Mornington, on Thursday, 8 February. From left are Sandy Taylor, of The Smile Place, Dr Kym Barron, of Exactly Chiropractic, Mornington, and Kim Anderton, of Enhanced Myotherapy. 4. Mornington BNI president Robert Commerford with Caitlin Davey, of hbt Beauty Therapy. 5. Mornington Cup Sponsors’ Breakfast at Morning ton Racing Club on Monday, 11 February. From left are Fraser Bayne, general manager of sponsorship and membership of Melbourne Racing Club, Angela Cleland, general manager of Mornington Racing Club, and John Stewart, chartered accountant. 6. Mornington Cup Sponsors’ breakfast guests Fred and Marie Bayne with Fred’s sister Clare (centre). 7. Enjoying the warmth of the Mornington Cup Peter Jago and Melissa McCullough. 8. Cup guests Kay Taylor, of Main Street Eye Care, Jim Arvanitakis, of Business Essentials, and Tanya Patterson.
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www.slatteryauctions.com
9. Kevin Wright, oif Kevin Wright Real Estate, with Lina Luppino at Mornington Cup. 10. BusinessTimes co-owner Margaret Harrison and husband Ron.
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11. Action Coach Profit Club breakfast at Sandhurst, Skye, on Thursday 14 February. From left are Ray Stewart, of Balloon Emporium, and Action Coach Wayne Gillan. 12. Kingston Women’s Networking lunch was held at Mentone Hotel on Tuesday 19 February. From left are Bridgette Triandafilidis, of Baybridge, accountants, Dhea Bartlett, of Send Out Cards, Lee Cummins, of Lee Cummins Consulting and Elizabeth Conway, of Isis Vision Insititute. 13. Kingston Women’s lunch guests (from left) are Liz Leahy, CRS Australia, Shona Crawford, of vegebunch, fresh food supplies, and Tamara Stevens, of Tegic workforce solutions. 14. Women’s lunch guests Tracey West, of Telstra Business Centre Bayside, Danielle Barugh, of Cellarbrate and Lillian Schmitt, also of Telstra Business Centre Bayside. 15. Mt Eliza Networking Group met at Eden Gardens Mt Eliza on Wednesday 20 February. From left Simon Ainsworth, Eden Gardens managing director, Tim Van Der Horst, Eden Landscape general manager, and Andrew Woff, of Midland Insurance Brokers. 16. Mt Eliza Networking guests are Jenny Ryan, Alison Weir, of Herbaceous, and Cheryl Cull, of Caring Hands.
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NETWORKING
The lollipop entrepreneur: Behavior and motivation Referral marketing leads to few – if any – overnight success stories. In fact, the most crucial part is building relationships, which takes a lot of time and effort. However, when you’ve taken the time to build the right referral relationships with the right people, and you are able to understand each of their behavioral styles, these long-term relationships will be a huge part of your referral marketing business. Of course, it’s really important to understand your own behavior style before you can go any further. After much research and working with experts in the industry, we’ve identified four key behavioral styles that people can fall into. Nurturer: If you are slower-paced and people-oriented, this is your likely style. Nurturers tend to be caring, thoughtful people who enjoy helping others and strongly dislike confrontation as they do not like to hurt people’s feelings. Promoter: If you are fast-paced and peopleoriented, this is probably your style. Promoters tend to be gregarious, fun people who enjoy excitement and the spotlight and are very concerned with people liking them. Examiner: Slower-paced and task-oriented, examiners tend to be very methodical, process-oriented people who enjoy completing tasks and dislike anything with too much hype that is not based on facts. Go-Getter: Fast-paced and task-oriented, Go-Getters tend to be very driven, challengeoriented people who enjoy winning at everything and strongly dislike being wrong about anything. For the most part, your behavioral style is determined by what motivates you. Motivation is defined as the biological, emotional, cognitive or social forces that activate and direct our behavior. Put simply, it’s the reason why you act the way you act. Why did you get out of bed this morning? What made you wear those shoes today? What makes you attracted to that particular business person? Motivation can be very tricky to understand, but easier when you can figure out behavioural styles. When you think of what motivates
Dr lvan Misner*
Networking specialist
When you have taken the time to build the right referral relationships with the right people, and you are able to understand each of their behavioural styles, these long term relationships will be a huge part of your referral marketing business. you, it can be a multitude of things. Some motivation is a temporary situation. Say you don’t enjoy numbers or accounting, yet at the end of the week or month you want to receive your paycheck. You may be temporarily motivated to do the accounting necessary to generate the paycheck. However, if you thought about a career in accounting, it would make you sick to your stomach. Many people make an incredible living in this profession, so obviously you wouldn’t die if you had to do that forever. But you are definitely not motivated to work with numbers on a regular basis. The motivation that we would like to discuss now is the “how you are wired” variety. It’s a motivation that may have been with you forever. If you’re a parent, have you ever noticed that your children are “wired” differently? Did you notice what motivated them before they could even speak? Did they want independence or to hold their own things? At times did they seem to not need you? Or maybe your child had a knack for taking stuff apart and putting it back together, had to have 12 toys to play with to be happy or maybe they simply wanted time with you. Can you see how this is related to the four behavioral styles? The independent baby could be the Go-Getter. The baby who is taking everything apart and putting it back together could be the Examiner. The baby who has to have 12 toys to play with or they get bored could be the Promoter. The baby who just wants time with you to feel safe could be the Nurturer. As you might imagine, it’s not so
10 | BusinessTimes Frankston / Mornington Peninsula / Dandenong | March 2013
simplistic that every person in 100 per cent one style or the other. It’s in our nature to be a blend of all four styles, but most people do tend to display one style more prominently than the others. And the same is true for me… Ivan the Go-Getter When I was 11, I missed the bus to school one day. The school was only two miles way, and I had time, so I started walking. Along the way I passed a service station that had a small store attached to it. My eye caught some beautiful lollipops – big, red strawberry-flavored suckers. They only cost five cents (I’m probably aging myself with that information!) so I bought five and headed on to school. A friend saw what I had and asked if he could buy one. I said sure – for 10 cents. He bought it right away. That day I sold all the lollipops but the one I kept for myself…and I saw a great business opportunity. The next day I walked to school again, this time buying a dozen lollipops. I sold them all before school let out for the day. I did this the next day, and the next…for almost a month, very happy at my markup and the money that I was starting to see growing from my lollipop enterprise. Then I got called into the Vice Principal’s office. He asked me if I was selling lollies at school. I said yes – and started to share with him the exciting story of how I was doubling my money. Before I could get very far, he interrupted me to say that I was not allowed to sell candy at school, and that if I continued I would be expelled. I was shocked. In fact, I immediately thought of the many fundraisers I had already seen at school by that time, which sold – you guessed it – candy. I asked the vice principal why it was okay for candy to be sold at school for fundraisers but I couldn’t do the same thing. His only answer was a cryptic:“It’s different.” That was my first experience in business and even though a “government regulation” shut it down after only a month, it was obvious from that early time in my life that I was a Go-Getter. *Dr. Ivan Misner is a New York Times bestselling author. He is the Founder and Chairman of BNI, the world’s largest business networking organisation. Dr. Misner is also the Sr. Partner for the Referral Institute, an international referral training company.
In a tough year, can the internet save small businesses? Sensis recently laid off 650 staff and retail businesses are closing every day. This is the reality for businesses that are not adapting to the way that the rules of the game are being changed by the internet. But for small businesses, there is a silver lining, with many small businesses gaining incredible advantages in many aspects of their businesses. Adverting + Marketing: Your website, Facebook, Twitter, Search engine optimisation and search engine marketing are all ways that you can cut your cost to acquire a customer. We spend a fraction of the amount that we spent Yellow Pages five years ago and have a higher number of prospects. Sales: Get your workforce mobile. With the growing number of tablets, including the new Windows 8 tablets that can run all of your line-of-business applications, sales people can now do much of their work while on the road. Knowledge management: Yammer and Sharepoint help to get the right information in the hands of your team. Yammer is like Facebook for business and is great if you struggle to get everyone in the same room at the same time. Sharepoint allows company documents to be sorted, so everyone can find the document they need quickly. Business efficiencies: Customer web applications allow your business to integrate with both customers and suppliers. Cut down on paperwork, re-keying data and human error and redeploy administration staff Geotracking: If you have a mobile workforce, there are many geotracking solutions now available to allow you to track the location of your personnel, both from a Workplace Health and Safety aspect and from a productivity aspect. CRM: Salesforce, Sugar, Microsoft CRM – there are a lot of Customer Relationship Management packages available and a good CRM package can dramatically increase customer satisfaction, productivity and profitability. Cloud: Office 365, Xero, and Drop Box are cloud applications that can make it a lot easier for businesses, especially small businesses. Office 365 is charged per user, so businesses with five employees can get access to the technology that much larger businesses use, for a fraction of the price. Online sales: Technologies like Magento now make it easy to sell online.Many retail businesses are making the switch
Extreme Networks owner James Eling explains to IT business owners in Sydney in February how they can help clients to make the move online. and moving from expensive retail premises to much cheaper warehouses and now selling Australia wide, rather than to just the local foot traffic. Many more customers with much less rent – these are the reasons that internet sales are proving so popular with retail businesses and customers alike. Skype and Lync: Skype isn’t just for phone calls. It also allows video and desktop sharing. It allows people to communicate in a much richer way than before. Our team of 17 has been helping businesses all of Australia and New Zealand make the transition to online in their business for over 10 years. If you’d like to discuss how to save time and money in your business by using the internet more, please call the Team at Extreme Networks on 97857162.
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March 2013 | Frankston / Mornington Peninsula / Dandenong BusinessTimes | 11
feature: global staffing
On the
outer outsourcing and going offshore to save money is giving some businesses the inside running. by keith platt
F
Above: Katrina Arellano, left, and her sister-in-law Ariana Arellano working in the Phillippines for Frankston website constructors, True Blue.
or many people, the first inkling of jobs being performed for Australian companies outside of the country comes with a deluge of phone calls from people speaking English with unfamiliar accents.
The phone rings about dinnertime and the caller starts off by asking you to participate in a survey. If you stay with it, the real purpose of the call becomes clear: change your telecommunications provider, power supplier or sign up to receive a holiday for two at an exotic location. The accents seem similar to those who answer our calls for help when the computer crashes, the phone bill reaches astronomical heights or the washing machine breaks down. The technical name for establishing these call centres overseas is offshore outsourcing. That is, hiring workers overseas to carry out duties for a company that makes products or provides services in Australia. Just to confuse the issue, offshoring means having an overseas subsidiary company make products or provide services for a company in Australia. Both activities are aimed at saving money. Opponents see them as saving money at the cost of Australian jobs; proponents say the savings help reduce prices for consumers. The arguments are heightened by unemployment levels this year predicted to hover between five and six per cent and frequent reports of jobs being lost to overseas. One outstanding example of offshore outsourcing from the United States has entered the realm of business legend: A resourceful IT programmer was found to be spending about 20 per cent of his six figure salary outsourcing his job to China. He was exposed when
Above right: True Blue co owner Beau Rixon Left: Chris Jankulovski, CEO of Sydney-based Remote Staff , an agency arranging workers for offshore outsourcing.
checks by a security firm showed the man spent most of his time “watching cat videos, shopping on eBay and enjoying lengthy lunch breaks”. His work reviews were about the best in the company. While offshore outsourcing has been going on for years and is a vein of material mined by comedians, its use by small business has crept in under the radar. The business of tapping into overseas workers is itself a growth area, although it takes a very small Australian-based team to provide hundreds or thousands of workers in other countries. As the offshore outsourcing business grows, so too does the dependability of the workers being hooked up to Australian companies. The kinks are being ironed out of the process, so that there is little or no mismatching of workers to the job.
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“If the job is to be repeated more than once, maybe it is worth explaining.” Rixon said True Blue would not use overseas designers. “Most businesses can use outsourced people in some capacity, but it’s much easier to keep the creative side of the business in-house. “There can be cultural differences and website designers need to understand our ways. We make a big thing of our websites being Australian made.” Remote Staff CEO Chris Jankulovski sees offshore outsourcing as an “opportunity to benefit from globalisation”. While acknowledging that Australian firms are unable to enforce laws if something goes wrong, he says contracts help “keep everyone accountable in a viable relationship”. His company’s vetting of workers and matching them with Australian companies protected clients from “unwelcome experiences”. He said contract buyouts such as that by True Blue happened up to three times a month. “We regard this as a form of success. Some clients end up having staff from Remote Staff that are totally mission critical with a client’s business.” While Remote specialised with staff in the Philippines it would at some stage recruit from other countries. Jankulovski finds it easy to deal with people from the Philippines. “We started in India, but I found that there was too much of a cultural divide.” His company employs five people in Australia, 45 in the Philippines and one in the Unites States. The Remote Staff website carries a “live” feed of the number of offshore contractors working (433 when checked by BusinessTimes on 21 February) and the total numbers of hours worked (2.218 million) 14 and total number of staff hired (3294).
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The savings are not insubstantial, with Australian companies paying about 30 per cent of what they could expect to hand out if the work was being done onshore. Beau Rixon of Frankston-based True Blue Websites describes the overseas outsourcing agencies as “a marketplace for people and jobs”. His company has two personal assistants in the Philippines. Instant telecommunications means they are no further away than a computer keyboard and built-in cameras allow face-to-face meetings. The first PA they hired was through Sydney-based agency Remote Staff. She proved so efficient that True Blue bought out her Remote Staff contract, taking her on board as a permanent staff member. Cutting out the middle person enabled True Blue to have security of staff and also give her a wage rise. However, Rixon recommends initially using an agency for offshore outsourcing because it cuts out having to sift through online sites full of prospective workers. He said reputable agencies screen and test people on their books to make sure they are capable of doing the job. “My tip when dealing with people overseas is that you be specific about the job you want done. Send them something specific, force them to read it and reply,” Rixon says. “Make sure they get back to you, so they reinterpret the job in their words and you can then assess their comprehension levels. Some people like to say yes and won’t admit they can’t understand what is needed. “Ask questions and make it clear that this is a trial or a test job. “Be polite, there’s no need to be rude just because they are charging $3 an hour.” No matter how cheap the cost of having work done overseas, Rixon has found “it’s best to do short jobs yourself if it takes too long to explain”.
March 2013 | Frankston / Mornington Peninsula / Dandenong BusinessTimes | 13
feature: GLOBAL STAFFING
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Jankulovski’s relationship with 13 the Philippines began after a 2006 visit in the wake of successfully overcoming “a hereditary health challenge” that saw him survive the removal of a six-centimetre brain tumour. “I took a year off and went there as part of my travels. The people left a lasting impression. They were straight up.” His wife, Rica, is general manager of Remote Staff “and my bridge to her culture”. A marketing and business consultant, Jankulovski once developed a three-hour video about a friend’s online money-making strategies. To prove a point, he marketed and sold 25 copies of the video in two weeks at $2500 each. “We then sold 150-200 in four to five months before my health challenge.” Remote Staff offers the added bonus of being able to monitor workers online to make sure they are doing the job. All workers operate Remote Staff-developed software called Remote Platform. “They need to login every day to Skype and our software to show up to work, so to say. When they press ‘start work button’ the software will monitor their computer usage, meaning it will report every application [or website] they have open on their computer,” Jankulovski stated in an email to BusinessTimes. “…This computer usage report will take note of how long someone has these open throughout the day, as well as report what that would equal as a per cent compared with their full work day.” Installing cameras in the workplace is not unusual, and BusinessTimes overheard a conversation where a shop assistant in Melbourne mentioned her employer installing a surveillance camera: “I scratch my bum and pick my nose, just in case they are watching!” Offshore outsourcing reduces the tax base in Australian, according to Frankston accountant Trevor Paganoni. “Whether the person or company from Australia is paying via an agency located here or overseas or directly employing the overseas worker, there are methods of structuring the arrangement to ensure that the taxing point is the overseas country so there is no method for the Australian government to collect any GST or income taxes,” Paganoni said. “I’m sure that there are people in Treasury who are watching the development of this
True Blue IT company co-owner Beau Rixon Skypes with his Philippines-based ‘office’ staff Katrina and Ariana Arellano.
On the outer I’m sure that there are people in Treasury who are watching the development of this practice as it has the ability to quickly lead to a permanent erosion of the government’s tax base, which may one day require a change in other taxes to compensate for it. – ACCOUNTANT TREVOR PAGANONI
practice as it has the ability to quickly lead to a permanent erosion of the government’s tax base, which may one day require a change in other taxes to compensate for it.” Paganoni said one way for governments to make up the shortfall would be to increase the GST. Unions would also be watching “as from their perspective it is basically sending Australian jobs overseas to workers who may not have the same employment conditions as the workers from Australia that they replaced, such as leave entitlements, superannuation, minimum working hours and safety conditions.” Finding out the real effects of offshore outsourcing is not easy. Opposition small business spokesman and MP for Dunkley Bruce Billson said there appeared to have been no official research
14 | BusinessTimes Frankston / Mornington Peninsula / Dandenong | March 2013
into the impact on Australia of offshore outsourcing. “We have put a bit of time into seeing what factual info we can get our hands on,” he said. “I even asked the parliamentary library for help and they came back to me with some older work from 2007 suggesting that ‘despite the interest in Australia, there are no official statistics that specifically measure this phenomenon’.” The library stated that analysis of data from the OECD (Organisation for Economic Co-operation and Development) indicated that “in terms of employment, Australia is a net beneficiary in the international trade in services and, therefore, of offshoring”. Mr Billson said “no-one wants to see jobs lost off-shore” and that the Coalition was “committed to ensuring jobs growth and we have announced our aim to create one million new jobs in five years and two million new jobs within 10 years”. Research at the Universitat Autonoma de Barcelona, Spain, shows that in Italy at least, offshoring “has no effect on the level of employment but changes its composition in favour of high skilled workers”. The jury is still out in Australia, but it’s a sure bet that offshore outsourcing is on the rise, so governments and unions had better do what private enterprise does: follow the money.
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That’s the path Brenda is taking hats used by de Bono as a metaphor for a particular direction of thought. Ironically, the SMART Networking forums grew from a failed business venture. Eight years ago Thomson and her partner (“business and life”) Colin Ball bought into a web design franchise, which “died” within a year. During the time that it was running Thomson started a spin-off website “as a service to small businesses”, listing networking groups and an events calendar. The website was supposed to
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but they are able to help, discuss and advise on common problems. The forums can be seen as a personal brains trust or having access to a board of directors who all come different backgrounds with different points of view and expertise. Thomson wears a green hat that, according to author Edward de Bono (credited with inventing the term lateral thinking), prompts provocative statements, investigation and seeing where a thought goes. It is one of the six coloured thinking
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To an outsider, it looks like a tour group. In some ways it is, but the path Brenda Thomson is leading it members down is towards business success rather than tourist attractions. Most have ordered breakfast from a cafe at the front of the building and munch while the meeting gets underway. It is 7.15am and the members of this particular SMART (Specific, Measurable, Achievable, Results focussed, Time) forum are here to help one another in business. No two people are in the same business,
smart
t
Brenda Thomson stands in the foyer of a building in St Kilda Rd, wearing a glittering bright green hat. Eight people gather around and she leads them into a small conference room. keith platt reports
Brenda Thomson with members of the St Kilda Rd SMART Forum .
While there was no shortage of networking groups and big business could afford expensive consultants “nobody was specifically looking after micro to small business – 50 per cent of which fail in the first three to four years”. Thomson tailored the SMART forum model to the needs of small businesses. She continues listing networking groups and events online, but benefits from the $275 joining fee and $550 a year paid by each forum member.
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Thomas believes her forums can reduce the risk of failure to one in 10. “Small business owners struggle for time, knowledge, money and someone to talk to,” she says. “Being part of a team can really help them.” The “teams” that make up each forum number 10 to 20, with 15 being the “ideal”. Each forum – grouped in geographic areas – includes a business coach providing the type of expertise financially beyond the reach 20 of individual members.
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attract advertising, but the groups, while appreciative of the service, did not have advertising budgets. Although there was no income being generated by the networking site, the results of surveys sent to the various groups (524 responses to 2300 emails) gave Thomson an insight into what was lacking for people running small businesses. “Those results were the basis for a business. I found out that people wanted to meet monthly, during office hours and they wanted an opportunity to network.”
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| Frankston / Mornington Peninsula / Dandenong BusinessTimes | 17 Accounting team members - Jason Beare,March Dereen2013 Wallace, Amy Bignell and Irena Lioudvigova.
MARKETS
Immunity in volatile times The first half 2013 results season came as a great relief. Finally the worst effects of the GFC were behind us. There were still some breathtaking writedowns (Rio, BHP and Stockland among others) but bright performances too. Richard Campbell* Stock Analyst
fractionation that the big drug groups thought were low growth and governments thought were a burden. Scale and depth of R &D fed on each other. CSL’s researchers produced more and more specialised antibody products, creating the cash flow for more acquisitions and the sort of long range drug development that requires patience, deep pockets and the depth of bio-science education that Melbourne has long produced. The pay-off is now coming through in the form of better than expected royalties. To complete the cycle CSL is deploying its cash cascades in a second buy-back to reward shareholders – and why not? The likes of Google and Apple have wider margins (not much) and 50 times the cash, but they also run the risk that competitors will borrow and steal their ideas. Like supernovas, these gargantuan companies may not live long. Blood separation and vaccines are in growing demand now as China and the rest of the world transitions to western medical treatment. In 25 years today’s seven billion will become nine. CSL also high-lighted an important distinction this profit season. While BHP and Rio were removing their CEOs with cheques
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* Richard Campbell is Executive Director of Peninsula Capital Management, Tel. 9642 0545. rcampbell@peninsulacapitalmanage ment.com.au
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The purring performances of “new economy” stocks like Seek and Carsales stood out, but even more so did CSL. It showed again that is the outstanding Australian business by almost every measure. CSL may not be exactly “new” as an institution, but in its newish entrepreneurial format (listing in 1994) it is more than simply a global heavyweight in blood therapies and vaccines, but a model for what we have to do to build strengths in a world doesn’t believe it owes Australians a comfortable living. Free enterprise purists may take a more sceptical view. After all CSL did begin listed life with the endowment of the most modern blood separation facility in the world at Broadmeadows and supported by having a national monopoly on blood fractionation and supply. So how could it not succeed? But in fact it was not all plain sailing. It got the wobbles in 2002 when there was a global over supply of plasma and sharp currency distortions. The price collapsed in a few days. Under different management CSL might have crawled into its shell, but Brian McNamee – as much a business strategist as a medico – saw this slump as an opportunity, acquired the Swiss blood group ZLB and continued CSL’s transition from a leafy research institute to a fast moving, global market player. McNamee and CFO Graeme Kaufman saw the benefits of scale in the “low margin”
of ludicrous sale and writing down billions, CSL produced a 25% profit lift and after last year’s buy-back is conducting a second and has still has about $700m in bank. Certainly mining and blood therapies are very different businesses. We need both, but both BHP and Rio have had more than a century of experiencing cyclical markets and access to the best commercial intelligence in the world. Despite that, both still made very flawed acquisitions. Even more strangely they have committed to expanding iron and coal production at the peak of the cycle as China realises its model of profitless production is ultimately self-defeating. It treats many of its citizens as robots or slaves and poisons China’s air, ground and water. Fortunately there are a few embryonic versions of CSL. Starpharma with its synthetic molecules adaptable to dozens of applications is worth watching, while Phosphagenics (POH) could have global reach. It uses phosphorous as a conveyor for the passage of drugs and vitamins through the skin. By making morphine derivatives specific in time and quantity POH is on the way to building a billion dollar business. The same platform patch technology applies to cosmetics, skin therapies and nutrition. By 2014-15 it could have seven separate revenue streams. This is not a recommendation as POH is still cash flow negative, but with CSL in mind as a model, investors will be able to judge when POH is sound enough to satisfy their own notions of reward and risk.
18 | BusinessTimes Frankston / Mornington Peninsula / Dandenong | March 2013 A Voice For Business
Call Marg Harrison, 0414 773 153 or email marg@businesstimes.net.au
HEALTH
And nothing but the truth Can you tell when someone’s spinning you a line? A salesperson, employee, manager … politician? Being able to spot a lie is a handy skill – and not only if you have kids! We’ve just endured several weeks of sporting and political figures ducking and weaving on the topics of drugs and match-fixing – most of them spinning madly – and given that we’ve entered a seven-month election campaign, things might get a whole lot worse. About the only positive about this mother of election campaigns is that the ABC can resurrect the superb The Gruen Transfer specials devoted to unravelling political spin. Australians are actually well accustomed to seeing through political fibbery, and we take unkindly to bulldust. We can generally spot it, and we don’t like it. Think of how much trouble Julia Gillard ran into during the last election campaign over which persona was the “real Julia”. If you’re wondering what a discussion on spin is doing in a column on health, the answer is, well, I’m not sure either. I just find it fascinating. Patients usually tell their doctors the truth. Although not always the entire truth. Sometimes it can be a sanitised version. A kind of “all I think you need to know” version. Naturally the main offenders are we men, who are probably kidding ourselves that the health professional behind the desk is not reading the complete story between the lines. A stack of recent studies in the US have shown that telling lies is actually bad for your health and that being honest has positive health impacts. (Google if interested.) Of course our family and friends gild
Michael Ellis*
Chinese Herbalist
the lily at times. Sometimes white lies are necessary to keep the peace or to avoid hurting feelings. But all of us can benefit from being able to spot a deception. Actually, there are so many giveaways when a person is being economical with the truth that you wonder how anyone gets away with it. We should all be expert at picking it. We know about the eyes being the window to the soul, and the liar finding it hard to hold normal eye contact. But the classical inadvertent movement is the hand touching the nose or face. This is a covering gesture that tries to obscure the initial response in our eyes. It’s us trying to hide guiltily from threatened exposure. I couldn’t help noticing a public figure copping a grilling on TV recently doing exactly this when asked if he’d done anything wrong. “No,” he said emphatically, then fleetingly rubbed his nose. That was, at the very least, an incomplete answer. A liar might unconsciously place objects (like a book or coffee cup) between themselves and you. Generally their movements are limited and stiff, with few expansive arm or hand gestures. Hand, arm and leg movements are towards their own body as the liar seeks to take up less space and shrink from exposure. The voice is a giveaway too. It loses its normal range of tones and tends to become
flat. Can we ever forget the classic Bill Clinton line, delivered deadpan: “I-did-nothave-sex-with-that-woman.” Apart from the toneless delivery, notice that he said “did not” rather than “didn’t”. Contractions usually indicate the truth. Also, liars are more likely to repeat the questioner’s words. “Did you have sex with Ms Levinsky?” If he’d just said: “No, I didn’t” we would have believed him. A high-profile AFL official dropped this one just recently. Asked if he’d tipped off a club to an impending investigation, he said: “No, we did not.” Aha. A guilty person may also add unnecessary details to his story to convince you. A story filled with details is suspicious. If you believe someone is lying, a quick change of subject can be telling. A liar follows willingly and becomes more relaxed. He wants the subject changed and won’t go back there ever again; an innocent person may be confused by the sudden change in topics and will want to return to the previous subject. A TV show not long back called Lie To Me delved into this area and came up with an entertaining (if ultimately repetitive) series. The show popularised the notion that you can tell whether a person is being truthful by whether they look to the left or right when asked to access their memory. This does seem to have scientific merit. (It’s a bit complex to explain here, but Google it.) Of course when it comes to false answers, the other side of the equation is the question. Vague questions make an evasive answer easier. A leading question like “Which football match did you tank?” should force a straighter response than “Do you fix football games?” * Michael Ellis is a registered Chinese herbalist in Mt Eliza. Visit www.mtelizaherbal.com
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PENINSULA SERVICED OFFICES OPENING
Asian Pacific Serviced Offices will extend its network next month when it opens the new Peninsula Serviced Offices at Peninsula on the Bay (formerly the Peninsula Centre), Frankston. The company already has six properties across Melbourne CBD, St Kilda Rd, Kew, Malvern and Preston providing offices and support for small enterprises. Peninsula Serviced Offices are on the ground floor of Peninsula
BRENDA KNOWS THE SMART WAY TO GO 17
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“It’s an elegant format for business coaches to show what they can do without being too salesy,” Thomson says. The coaches volunteer their time, giving forum members free advice and an insight into what their profession can offer. “I know one member who has now left a forum after being successful enough to pay the $5000 a month for a business mentor,” Thomas says. “The coaches are adding value to the forums knowing that it can come back to them in leaps and bounds.” Thomson says that in the beginning she took help from any coach that stepped forward, she now interviews them to gauge their suitability for SMART forums. It is the coaches who then establish a forum in a specific area. With the burgeoning success of the SMART forums – 14 in the Melbourne area - Thomson is going through the process of franchising the model, with buyers lined up in Adelaide and regional Victoria. While she will “keep Melbourne”, her business plan aims for the forums to be Australia wide in three years, in New Zealand and the United Kingdom in five years and “probably looking at Canada and the United States”. “I didn’t set out with big, airy goals but there was a huge gap in the market.” A rebranding of the business will see it drop the word “networking” from her business name. Thomas is big on business plans, and membership of the forums requires that each member have one. “If you’re too busy to prepare for SMART then you’re too busy to work on your own business, because that’s what the forums are about.”
20 | BusinessTimes Frankston / Mornington Peninsula / Dandenong | March 2013
SOLAR SAVINGS
Refurbished and renamed, Peninsula on the Bay features the new Peninsula Services Offices in Frankston.
CostLess Solar believes it makes sense to cut the running cost of a business effectively and efficiently, year after year, without having to reinvest. Solar is not a new technology, but a tested and proven energy source used by Europeans for more than 20 years. CostLess Solar says that about 50 million German households, shopping malls, factories and government buildings use solar power to cut running costs as well as reducing greenhouse gas emissions. CostLess Solar has experience in commercial and residential supply and installation of efficient, reliable, quality Solar Systems from 2kw to 100kw. Government rebates still apply. CostLess Solar recommends that businesses consult their accountant on available tax deductions. It predicts that many businesses would get a pleasant surprise. Make 2013 the year to make your business greener, says CostLess Solar. SEE ADVERTISEMENT P.2.
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on the Bay, 435-437 Nepean Highway, a 10-storey tower now offering residential, commercial and retail spaces. Facilities will include retail outlets, conference services, health and recreational amenities plus more. • A serviced office with Asian Pacific Serviced Offices offers businesses the flexibility to lease from one week, one month to one year • Prices start from $79 a week for a fully equipped and furnished serviced office • Offices cater for 1-15 people • Whether you need a meeting room, a virtual office, temporary office space or a serviced office; you can be up and running the same day with no hidden costs Asian Pacific Serviced Offices has teamed up with Frankston City Council to offer a fully functioning “business growth” facility. Tenants of the serviced offices will get all the benefits of serviced offices, plus priority access to council’s Build Your Business products and services. Details: 9863 7888 or enquiries@asianpacificservicedoffices.com.au.
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March 2013 | Frankston / Mornington Peninsula / Dandenong BusinessTimes | 21
MANAGING
Business process audit Most business leaders tremble a little when they are advised that the auditors are coming. An audit is often not a good news story, as the auditors seek to find the financial errors and faults within your business, often with unpleasant consequences. This attitude is a shame because the process of auditing is a powerful technique that can be used to deploy business strategy and help drive positive change. At its basic level, an audit is simply a reality check. It will determine what is actually happening within a business process and develop corrective recommendations to business leaders. The accounting profession has made exemplary use of audits, leading the world by integrating audits as a high level process for every size business. An audit process can however, be applied to virtually any business process using the financial audit model. The first step is to examine your strategy and identify the few business processes that really embody your competitive advantage. For example, if you are in the retail business, the two key processes could be your customer relationship management and your speed to supply goods. The business leader needs to clarify the results expected from each process and to sponsor development of a set of standards and rules that apply to each process. These can then be deployed and used as the baseline for audit evaluations in the real world. These standards and rules are usually referred to as the “protocols” that define exactly how each person in the process should handle their role to ensure that they produce an optimum result every time. These protocols should be seen as a live set of rules that are reviewed continuously to ensure that they achieve the business intent and outcomes. Sometimes, the people working in the process will find ways to improve their job and an audit should always be seeking to identify these exemplars that can improve the protocols for the whole business. In the absence of effective protocols, people will guess at the way to run their part of a business where their priorities may be more personal based than business based. I believe a recent example of ineffective protocols was the debacle with Subway’s major brand Footlong. A student in Perth
Hamish Petrie*
Business Consultant
While the TV show “Undercover Boss” has been popular, it is not normally recommended that the business leader be directly involved in audit discussions. The leader’s role is to act as the audit sponsor, including making a public commitment to evaluate all audit team recommendations and implement improvements, wherever feasible. posted a photo of an 11 inch Footlong on Subway’s Facebook page and asked them to respond. Subway initially said that Footlong was a brand and was not meant to be 12 inches long, but when it was pointed out that they sell half a Foolong as a 6 inch Sub, they finally relented and changed their position to admit that they had a problem and that they would fix it. The lesson here is that an effective set of protocols coupled with an audit process could have protected them from this PR debacle by ensuring that all franchisees could deliver a foot-long Footlong every time. Once you have developed and deployed a set of protocols, then it is time to design an audit process. There are many factors to consider in this design stage including leadership, participants, expertise levels, timing, communication, and follow up responsibilities. The most important issue is to decide on the individuals to conduct the audit based on their credibility with your people. This is particularly difficult in a small business, where everyone is well known. In these cases, it may be valuable to use an external person to lead the audit supported by internal people who are not directly involved in the process being audited. The credibility of the audit leader is truly important and it is worth taking the
22 | BusinessTimes Frankston / Mornington Peninsula / Dandenong | March 2013
time to get the right person for this role, so that they can focus exclusively on the audit. While the TV show Undercover Boss has been popular, it is not normally recommended that the business leader be directly involved in audit discussions. The leader’s role is to act as the audit sponsor, including making a public commitment to evaluate all audit team recommendations and implement improvements, wherever feasible. Early communication of the audit intent, protocols and process is really critical to ensure that the people involved in the audit understand its importance, but are not too distracted from their normal role of running the business every day. These people need to be on side with the audit as there will be substantial extra work for them in the preparation of information and data for the audit team. At the end of an audit, it is critical that the findings of the audit are communicated widely with leadership endorsement. While audit results may be biased to focus on faults and errors, it is valuable to find the positive outcomes as well and to include these in the communications. At the end of each audit, the protocols should also be updated to reflect the lessons learnt from this audit. So, if your business needs a real world check as the basis for positive change, then a well designed and conducted business process audit may be the solution you are seeking.
Action Planning Questions: 1. Have you identified the few major non-financial processes that embody your competitive advantage? 2. Have you developed a set of protocols that clarify the rules and standards for each person involved in these processes? 3. Can you select one of these non-financial processes for the first audit review, with a focus on a small-scale trial audit? 4. Have you conducted a small-scale audit as a learning opportunity and built the credibility of auditing as an improvement process? *Hamish Petrie had a 37-year corporate career including 25 with Alcoa Inc. His latest position was VP People and Communications for the Global Alcoa Corporation based in New York. He can be contacted at hamish@nitroworld.net or on 0404345103. © Hamish Petrie 2012
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